If you run a construction business in South Texas, your backlog number is one of the most important figures on your desk right now. The national backlog just hit a nearly three-year high; the South region leads the country, and the window for making smart decisions about late 2026 is narrowing. This article breaks down what the latest data means, how to calculate your own position, and what to do with the answer.

Key Takeaways

Construction backlog refers to the total dollar value of signed contracts and approved change orders for work that has not yet been performed. It is your future work inventory-not overdue tasks, not proposals, not hopes. Associated Builders and Contractors converts this figure into months of work using a straightforward formula, and every contractor should perform the same calculation monthly.

Here is what matters most heading into the second half of 2026:

• The national construction backlog indicator rose to 9.1 months in May 2026, based on an ABC member survey conducted May 20 through June 3. That is up 0.3 months from April and 0.7 months from May 2025-a nearly three-year high. The South region posted both the longest backlog and the strongest year-over-year gain, putting South Texas contractors at the center of this cycle.
• The backlog formula is simple: (backlog dollars ÷ trailing 12-month revenue) × 12. ABC South Texas recommends every contractor calculate and track this KPI monthly. If you have $54 million in remaining contract value and $72 million in trailing annual revenues, your backlog is 9 months.
• Confidence is cooling even as backlog climbs. ABC’s Construction Confidence Index readings for sales, profit margins, and staffing all slipped in May but remained above 50, signaling expected growth over the next six months alongside rising competitive pressure.
• Headline backlog can mask differences by firm size. Larger contractors-especially those with data center work-report substantially longer backlogs than firms under $30 million in annual revenue. Your benchmark must be peer-appropriate.
• This article translates these indicators into concrete guidance on bidding pace, hiring around workforce needs, and cash flow planning for late 2026 in South Texas nonresidential construction.

What Is Construction Backlog (and Why Are You Hearing About 9.1 Months in May 2026)?

If you searched for “construction backlog” this week, you likely saw a headline number and wanted to know what it means for your construction firm. Here is the plain answer.

Construction backlog is the total value of contracted work-signed contracts and approved change orders for nonresidential construction projects-that has not yet been performed. It is a positive measure of future work inventory. Backlog reflects future projects under contract but not yet started or completed. Think of it as the depth of your workbook: how many months of revenue are already locked in before you win another dollar of new projects.

Backlog is measured in dollars and project volume, but the most useful expression is in months. The standard ABC formula converts raw dollars into a timeframe your leadership team can act on:

(Current backlog in dollars ÷ trailing 12-month revenue) × 12 = backlog in months

For example, suppose your construction company carries $45 million in remaining contract value and recognized $60 million in revenue over the past 12 months. Your backlog months = ($45M ÷ $60M) × 12 = 9 months. That tells you roughly how long your current and future projects would keep your crews busy at today’s run rate, assuming no new contract awards.

This is the same method ABC National uses to produce its contractors’ construction backlog indicator, so when you calculate your own number, you can benchmark it directly against a national KPI that the entire construction industry watches.

In May 2026, ABC reported national backlog at 9.1 months, up 0.3 months from April and 0.7 months from May 2025. The survey was fielded May 20 through June 3 among ABC’s nonresidential contractor members. That 9.1-month reading is a nearly three-year high, and it signals that the construction market pipeline heading into late 2026 is deeper than at any point since mid-2023.

For South Texas contractors specifically, the South region currently shows both the longest average backlog and the largest year-over-year increase of any U.S. region tracked by ABC. That places general contractors, specialty contractors, and suppliers in this part of the country in the strongest segment of the U.S. nonresidential construction cycle.

The rest of this article will help South Texas owners and executives decide how aggressively to bid, hire, and plan cash for late 2026 using their own backlog number and ABC’s indicators.

How ABC’s Construction Backlog Indicator Works

The Construction Backlog Indicator, or CBI, is ABC’s monthly forward-looking measure of nonresidential construction backlogs across its member firms. It is expressed as the average number of months of work under contract and is widely regarded as the construction industry’s leading gauge of future workload.

CBI is built from confidential monthly surveys of ABC member contractors. Each responding construction firm reports two numbers: the dollar value of remaining work under contract and its trailing 12-month revenue. ABC converts these inputs into months using the standard formula described above, then aggregates the results to produce a national reading and several sub-readings.

It is important to understand what CBI is and is not. It is an industry-wide KPI-a snapshot of today’s contracted volume. It is not a forecast model. However, because contracted work tends to lead actual construction spending and employment by several quarters, the backlog indicator functions as an early signal for where the market is heading. When CBI rises, hiring and spending tend to follow within six to twelve months. When CBI falls, tightening usually arrives later.

ABC aggregates responses by firm size (under $30 million, $30 million to $100 million, over $100 million in annual revenues), by market segment (including whether firms hold data center contracts), and by region (including the South, which covers Texas). This segmentation reveals where backlogs are rising or falling fastest and helps contractors compare themselves to meaningful peer groups rather than to the entire national average.

Alongside CBI, ABC publishes companion Construction Confidence Index readings for sales, profit margins, and staffing expectations. These are scored on a 0-to-100 diffusion scale where values above 50 indicate that more contractors expect conditions to improve than to worsen over the next six months. Together, the backlog indicator and the confidence readings provide both a volume measure and a quality measure of the nonresidential construction outlook.

May 2026 Headline Numbers: What 9.1 Months Really Means

National CBI reached 9.1 months in May 2026, nearly a three-year high and 0.7 months above May 2025. High backlog levels suggest strong demand for construction services across the country, and for South Texas firms this is not an abstract number-it is a market signal worth studying.

On a month-over-month basis, backlog increased in every U.S. region except the South. That sounds paradoxical until you look at the full picture: the South still holds both the highest absolute backlog and the largest year-over-year gain. A slight monthly dip after sustained gains does not erase the region’s dominant position. It simply means the South had already built a sizable backlog ahead of other regions.

ABC Chief Economist Anirban Basu identified massive data center and related power infrastructure investments as the primary driver of the surge. Complex projects often lead to longer backlog durations, and data center work is a textbook example. The 14 percent of ABC members under contract for data center work report an average backlog of roughly 11.6 months, compared to about 8.6 months for members without data center contracts. That three-month gap explains much of the variance in the national headline.

This data-center-driven surge disproportionately benefits larger national and regional contractors, but it also creates spillover mechanical, electrical, civil, and specialty work for mid-sized South Texas firms. High backlog levels can inflate project costs due to resource strain, so even subcontractors benefit from understanding how mega-project demand is shaping the broader supply chain management landscape.

One critical point: a 9.1-month national backlog does not mean every South Texas construction company has 9.1 months of work. It is a benchmark. Some firms will be well above it; others well below. The value lies in calculating your own number and comparing it to this reference point to see where you stand.

South Texas in the National Picture: Why the Region Matters Now

South Texas falls squarely inside ABC’s “South” region, which currently carries the longest average backlog and has posted the largest year-over-year increase in months of work. For a construction firm operating between San Antonio, Laredo, McAllen, and the I-35 and I-37 corridors, this regional strength translates into concrete opportunity.

The drivers are familiar to anyone tracking the local construction market: data centers and related power infrastructure between San Antonio and Austin, industrial manufacturing investment, healthcare facility expansion, and public infrastructure work funded by both state and federal programs. ABC South Texas’ own analysis of nonresidential construction job growth in early 2026 confirmed these sectors as the primary drivers of demand, with nonresidential specialty trade contractors adding the bulk of new positions.

Regional backlog strength aligns with robust hiring needs across trades such as electrical, mechanical, concrete, and specialty industrial services. ABC estimates the construction industry must attract approximately 349,000 net new workers in 2026 to meet demand and replace retirements. In South Texas, the workforce gap is particularly pronounced in journeymen electricians, mechanical trades, and concrete specialists. Firms struggle to close persistent gaps even as the pipeline of future projects grows.

For a South Texas construction company, being in the region with the longest backlog means more projects to compete for-but also rising competition for anchor work and qualified craft professionals. Prospective customers are seeing more bidders on their projects, and the strongest firms are the ones that can demonstrate both the capacity and the talent to deliver quality projects on schedule.

Backlog vs. Confidence: How to Read the Mixed Signals

While backlog rose to a near-three-year high in May, ABC’s Construction Confidence Index scores for sales, profit margins, and staffing all slipped compared to April. Yet each reading remained above 50, meaning more contractors expect conditions to improve than to worsen over the next six months.

In simple terms, “above 50” is the dividing line between expansion and contraction in the confidence indexes. A reading of 53 means a slim majority of contractors anticipate better conditions; a reading of 48 would mean the majority expects deterioration. The May readings all remained on the growth side of that line, even though optimism has cooled since earlier in 2026.

For South Texas contractors, this combination-rising backlog with slightly weaker confidence-often signals intensifying competition for late-2026 and early-2027 work, tighter profit margins on bid-build construction projects, and more selective owners who expect sharper pricing. When volume is high, but confidence is moderate, the risk is that contractors chase projects to keep crews busy and accept terms that erode margins.

It helps to think of backlog as a volume indicator (how much work is under contract) and the confidence indices as quality indicators (how profitable and adequately staffed that work is expected to be). A contractor might have a 10-month backlog but worry that half of it sits at margins below target. Understanding this distinction is essential for making informed decisions about which new projects to pursue and which to walk away from.

Avoid overreacting to one month’s dip in confidence. Instead, incorporate these trends into your rolling backlog reviews and cash flow planning. Watch whether confidence continues to soften over two or three consecutive months-that is a more reliable signal than a single reading.

How to Calculate Your Own Construction Backlog in Months

Every South Texas contractor should know how to measure backlog and do so regularly. The process takes minutes, not hours, and the insight it provides is worth far more than the effort.

Step 1: Determine your backlog dollars. Add up the remaining contract value on every signed nonresidential project in your portfolio, including approved change orders. This is work that is under contract but has not yet been performed. Do not include unsigned proposals or verbal commitments-those belong in your business development pipeline, not your current backlog.

Step 2: Pull your trailing 12-month revenue. This is total revenue actually recognized over the most recent 12 complete months. You can pull this from your construction accounting software, your financial reports, or your CPA’s work papers. Use the percentage-of-completion method or whatever revenue recognition approach your firm consistently follows.

Step 3: Apply the formula. Divide backlog dollars by trailing 12-month revenue, then multiply by 12.

Here is a concrete example tailored to a South Texas general contractor:

• Remaining contract value: $72 million
• Trailing 12-month revenue: $96 million
• Backlog in months: ($72M ÷ $96M) × 12 = 9 months

That contractor’s backlog is right in line with the national 9.1-month reading. If the number were 6 months, the firm would know it needs to accelerate business development. If the number were 13 months, it should evaluate whether capacity, staffing, and cash flow can support the load.

This calculation should be repeated monthly at the company level. Ideally, break it down by major segment-industrial, commercial, healthcare, public works-to see which parts of your portfolio are strong and which need attention. That segmentation directly informs your bidding strategy, resource allocation, and client relationship priorities.

What Is a “Healthy Backlog” for South Texas Contractors?

A healthy backlog is not one fixed number. It is a range that keeps core crews and supervision fully utilized without overcommitting beyond realistic workload capacity. The right number varies by trade, business model, and risk tolerance-but there are useful guideposts.

A healthy backlog should cover 6 to 12 months of revenue. A backlog of 6 to 12 months of revenue is typical for contractors across the nonresidential construction spectrum. Within that range, many general contractors targeting large projects prefer 9 to 14 months of work under contract, while specialty trade contractors with shorter-duration scopes often target 4 to 9 months. The nature of the work matters: a mechanical contractor turning over projects in 4 to 6 months needs a different backlog depth than a GC running 18-month hospital builds.

A healthy backlog indicates contractor confidence and stable activity levels. It ensures continuous work and financial predictability, which is why lenders, sureties, and owners all pay attention to it. Contractors with a healthy construction backlog have increased negotiating power-they can afford to be selective, walk away from bad terms, and invest in the right people and equipment.

South Texas firms should benchmark their backlog months against both the national 9.1-month CBI reading and their own historical norms from 2021 through 2025, rather than chasing an arbitrary number. If your firm averaged 7 months of backlog over the past five years and suddenly reads 12, that is a signal to check whether you have the capacity and the cash to deliver.

A backlog much shorter than that of peers in the same segment may indicate a business development gap or a pricing issue. Contractors with minimal backlog risk running out of work and losing key employees. A backlog of less than 6 months may indicate financial instability and prompt reactive decisions. On the other end, a backlog of over 12 months can deter new clients who worry about availability, and an excessive backlog can lead to project delays, inefficiencies, and greater difficulty meeting client deadlines. Overextension can decrease productivity in construction firms that spread supervision and resources too thin, increasing the risk of missed deadlines.

The goal is a well-managed backlog that matches your company’s ability to execute safely and profitably, not simply the biggest number on the board.

Firm Size, Data Centers, and the Backlog Gap

ABC’s deeper analysis reveals a persistent pattern: larger contractors have historically maintained longer backlogs than firms with annual revenue under roughly $30 million, and this gap has widened in recent cycles. Labor shortages significantly impact backlog for smaller contractors, who have fewer resources to absorb workforce disruptions and often lack the bonding capacity or technical specialization required for mega-project work.

In November 2025, firms under $30 million in revenue saw backlog drop to 6.9 months-their lowest reading in over four years-while firms over $100 million were the only size cohort that did not experience a year-over-year decline. The data center boom amplifies this divide: fewer than 6 percent of smaller firms report being under contract for data center work, compared to 37 percent of the largest firms. When data center contractors average 11.6 months of backlog and non-data-center firms average 8.6 months, the math is clear.

Consider the contrast in practice. A regional GC in the Austin corridor with several active data center contracts might carry a 11- or 12-month backlog, driven by the long durations and large contract values of those projects. A smaller specialty contractor in San Antonio without data center exposure might sit closer to 6 or 7 months. Both firms could be healthy-but only if they understand their own position relative to appropriate peers.

This does not mean smaller South Texas contractors are locked out. Sharper business development, stronger relationships with larger general contractors who need reliable subcontractors, clearer value propositions in niche trades, and investment in workforce quality can all open doors to growth markets. The point is that when you benchmark backlog, compare yourself to firms of similar size, trade, and role-not to national mega-contractors with fundamentally different opportunity sets.

Using Backlog as a KPI in Your Construction Dashboard

Backlog in months should sit alongside gross margin, win rate, and cash days on hand as one of the core KPIs that South Texas owners and executives monitor. Backlog metrics serve as indicators of the construction industry’s stability and your firm’s trajectory. Regularly monitor backlog to align with strategic goals rather than treating it as a number you check once a quarter.

To incorporate backlog into a monthly executive dashboard, track it by quarter, by segment, and by delivery method-negotiated versus hard-bid-as part of a rolling 18-to-24-month nonresidential construction forecast. This segmentation reveals whether your backlog is concentrated in one client, one sector, or one delivery method, all of which represent risk if that single source dries up.

Backlog trends-rising, flat, or falling-often lead changes in staffing needs, equipment purchases, and capital investment decisions by 6 to 12 months. A construction firm that sees its backlog decline for two consecutive months should begin accelerating its business development efforts before the revenue gap emerges. One that sees backlog climbing sharply should be planning workforce additions now, not after the project kicks off.

Use construction accounting software and project management software to pull consistent, reliable real-time backlog data without extensive manual spreadsheets. Most modern platforms can automate the calculation once you configure your contract and revenue inputs correctly.

ABC South Texas recommends formalizing backlog targets and thresholds in your operations. For example, set a trigger to push new business development activity if backlog drops below 6 months, or to activate go/no-go scrutiny if backlog climbs above 12 months and you are approaching workload capacity limits.

Backlog and Bidding Strategy for Late 2026

Your backlog number should directly govern how aggressively you pursue new work for late 2026 and early 2027. This aligns with ABC South Texas’ 2026 business development playbook, which encourages contractors to let secured workload-not gut feel-drive the bidding process.

Firms carrying more than 10 to 12 months of healthy, profitable backlog should be more selective. Prioritize negotiated or best-value work with anchor clients over low-margin competitive bids. Contractors with a healthy backlog have increased negotiating power-use it. Allocate roughly 60 to 70 percent of your business development effort to negotiated pursuits and to building named target-owner relationships, rather than chasing every hard-bid invitation.

Conversely, firms sitting below 6 to 7 months of backlog may need to accelerate business development, broaden their list of target owners, and possibly accept more competitive hard-bid work-while watching profit margins carefully. A thin backlog means the near future is uncertain. That urgency is real, but it must be tempered by discipline: winning low-margin work to keep crews busy creates a different kind of financial strain than having an empty pipeline.

Align your backlog with client tiers. Structure your owner relationships into Strategic Anchors (the 2 to 6 owners who represent 35 to 60 percent of projected revenue), Core Recurring clients, and Opportunistic pursuits. By mid-2026, at least a third of your projected 2027 revenue should be tied up in anchor projects with owners you know well. That steady stream of anchor work provides the foundation that lets you be selective everywhere else.

For general contractors and specialty contractors alike, the message is the same: let your current backlog number-not market hype-set the pace and selectivity of your bidding.

Hiring and Workforce Planning from Your Backlog Number

Backlog helps contractors plan workforce needs and capital expenditures by anchoring staffing decisions to secured workload rather than short-term optimism or fear. If your backlog is built on signed contracts, you have visibility into how many labor hours you will need and when.

Convert your backlog into required labor hours by trade over the next 6, 12, and 18 months. Compare that demand to your current crews-by trade, by project managers, by superintendent-and identify specific workforce gaps. This approach is more useful than generic talk about “labor shortages.” It tells you exactly which positions to fill, which apprentices to advance, and where you might need to subcontract.

Labor shortages create bottlenecks in construction projects and are one of the primary risks to converting a large construction backlog into completed, profitable work. ABC estimates the construction industry must attract approximately 349,000 net new workers in 2026. In South Texas, the gaps are most acute in electrical, mechanical, and concrete trades. A long, high-quality backlog can justify sustained investment in apprenticeships, upskilling, and supervisory development through ABC South Texas training programs by giving recruits and apprentices a clear line of sight to steady, multi-year work.

However, overreacting to a one-time backlog spike by rapidly expanding crews without long-term visibility can strain cash flow and erode profit margins if projects slip or owners delay contract awards. Hire deliberately. Use your backlog to justify the investment, then use ABC South Texas’ safety training and apprenticeship programs to develop workers who stay.

Cash Flow, Backlog, and Construction Spending

A solid backlog translates into future revenue and cash flow-but not automatically and not on your preferred timeline. The gap between “work under contract” and “cash in the bank” is where many contractors get into trouble.

Backlog represents future construction spending and revenue, yet payment terms, retainage, and project schedules drive the timing of cash flow. A contractor with 10 months of backlog composed primarily of public works projects with 60-day payment terms and 10 percent retainage will convert backlog to cash far more slowly than one with private negotiated work on 30-day terms. Map your backlog schedule of values into projected monthly cash inflows and outflows, using realistic assumptions for pay-when-paid clauses, change-order timing, and typical costs of retainage release cycles.

A high backlog may cause cash flow problems if the workload exceeds capacity. A long backlog of low-margin or slow-paying work can strain cash flow more than a shorter backlog of well-funded, quick-pay construction projects. This is why understanding construction backlog means evaluating quality, not just quantity. Ask: what percentage of my backlog pays within 30 days? What percentage is held by owners whose financial health I have verified? What percentage carries margins above my target?

Supply chain disruptions often halt projects, and relying on a single supplier can cause construction delays. Both scenarios disrupt cash flow even when backlog looks strong on paper. Effective supply chain management-diversifying vendors, locking in pricing on raw materials, and maintaining buffer inventory-helps protect cash conversion when the unexpected happens.

Use construction accounting software to build rolling 13-week and 12-month cash-flow forecasts that update as backlog changes, tying these forecasts directly to bank covenants and bonding capacity. In uncertain economic conditions, lenders and sureties increasingly scrutinize backlog composition, cash flow projections, and under-billing/over-billing trends. Clean, well-documented backlog data is a strategic asset in those conversations, not just an internal exercise.

Economic Conditions and What Your Backlog Is Telling You

Company-level backlog trends connect directly to broader economic conditions. Economic growth increases the construction backlog because it fuels owners’ capital spending plans, especially in sectors such as data centers, healthcare, and infrastructure. When the economy expands, more projects move from planning to contract, and your current backlog grows.

Conversely, a sudden decline in backlog-especially if it mirrors ABC’s national CBI-can serve as an early warning of slower future construction spending and tighter credit conditions. A declining backlog may indicate cash flow issues or reduced contract awards. Construction backlog held steady at 8.4 months in July 2024, and the climb from that level to 9.1 months in May 2026 reflects the strong growth cycle the industry has experienced over the past two years.

Watch how your own backlog months move relative to ABC’s indicators. If your backlog is falling faster than the national or regional trend, the issue is likely firm-specific-perhaps a business development shortfall, a pricing disconnect, or a lost anchor client relationship. If your backlog is rising faster than the trend, check whether your capacity and workforce can handle the load.

High interest rates increase borrowing costs, affecting backlog size by making some projects uneconomical for owners and increasing financing costs for contractors carrying large work-in-progress portfolios. Private nonresidential construction spending has declined roughly 6.6 percent year-over-year as of May 2026, even as public sector spending rises. That shift means the mix of work flowing into backlog is changing, with implications for payment terms, margin profiles, and project timelines.

Inflation, interest-rate shifts, and public-sector budget cycles all influence which projects move from planning to contract. Incorporate both macroeconomic commentary from ABC economists and your own backlog data into annual strategic planning discussions so that you are making forward-looking decisions rather than reacting to last quarter’s conditions.

Construction Software’s Role in Backlog Management

Accurate, timely backlog measurement depends on reliable data from estimating, project management, and accounting systems. If your contract values, change orders, and revenue recognition live in separate spreadsheets that are updated sporadically, your backlog number is only as good as the last time someone remembered to refresh it.

Modern construction software can pull contract values, approved change orders, work-in-progress data, and revenue recognition to automatically update backlog in dollars and months. Construction project management software helps track backlog effectively by keeping project-level detail current-percent complete, committed costs, and schedule status-so that your aggregate number reflects reality. Digital tools enhance transparency and monitoring in construction projects, making it easier for leadership to see where things stand without waiting for month-end.

The most valuable integration connects field data-percent complete on each scope, labor productivity, material deliveries-with your construction accounting software so that backlog and WIP reflect real project status. Use WIP reports to balance and assess the health of your backlog across your portfolio. Features like job-cost reporting, committed cost tracking, WIP schedules, and dashboards that visualize backlog trend lines all contribute to effective backlog management.

This is not about adopting the most expensive platform. It is about ensuring that whatever project management software and accounting tools your construction company uses, they communicate and produce backlog data your team trusts. ABC South Texas encourages members to adopt fit-for-purpose digital tools that match their firm’s size and complexity, improving backlog visibility without creating administrative burden.

Construction Backlog Management Best Practices

Effective backlog management is essential for contractor success, especially in a market where backlog is high but confidence metrics are softening. Managing your backlog is not a once-a-year budgeting task-it is ongoing construction backlog management that disciplines how you win, plan, and execute work.

Monthly reviews by segment and client. Schedule a standing monthly backlog review to break down the remaining contract value by sector, owner, delivery method, and margin band. This gives your team visibility into concentration risks and helps manage expectations across departments.

Disciplined go/no-go criteria. Tie pursuit decisions to capacity and margin targets. If your backlog is already at 11 months, a new low-margin hard bid may add volume but not value. Poor planning and scheduling can lead to project delays, and accepting more projects than you can staff competently is one of the most common causes of delays.

Flag at-risk backlog. Not all signed contracts produce revenue on schedule. Identify backlog where permitting, financing, or scope uncertainty might materially delay or reduce contract value. Frequent design changes often lead to project rework and delays, and change orders can disrupt workflows and extend project timelines. Adjust hiring and capital plans to reflect realistic start dates, not optimistic ones.

Balance negotiated and low-bid work. Aim for a portfolio mix of roughly 60 to 70 percent negotiated or best-value work and 15 to 25 percent competitive low-bid. This mix provides a steady flow of relationship-driven work while maintaining the estimating discipline that competitive bidding demands. Client demands for accelerated timelines can manipulate backlog levels if you accept compressed schedules without adjusting resource allocation.

Buffer scheduling. Buffer scheduling can help absorb unexpected delays in construction. Build float into your master schedule so that a single delayed project does not cascade through your entire backlog.

Cross-functional alignment. Ensure that the estimating, operations, and finance teams share the same backlog view and can coordinate on staffing, equipment, and cash-planning decisions. When everyone works from the same number, project managers, superintendents, and executives can act together rather than react independently.

How ABC South Texas Members Can Use Backlog Data Day to Day

Backlog is most powerful when it moves from an executive dashboard metric to a daily management tool. For ABC South Texas members, weaving backlog KPIs into weekly and monthly routines turns abstract data into operational advantage.

Start with leadership huddles. Review the current backlog with the superintendent or project manager to balance assignments and avoid overloading individuals. If one PM is carrying 60 percent of total backlog while another has slack, the imbalance creates execution risk that even the best estimating cannot fix. Link preconstruction workload to future backlog so teams are not under- or over-utilized in the months between pursuit and groundbreaking.

Backlog insights also reinforce safe, ethical delivery. When firms avoid overloading crews and compromising safety performance just to keep up with over-committed project schedules, they protect both people and reputation. A construction company that delivers quality projects on time builds the client relationships and reputation that sustain a steady stream of future work. Clear communication builds client trust and secures future work-and that communication starts internally, with every team member understanding the current workload and what is coming next.

ABC South Texas education, safety training, and apprenticeship programs are most effective when companies have a clear line of sight to future backlog and can plan workforce development accordingly. If you know you have 10 months of electrical-heavy backlog ahead, enrolling apprentices in electrical training now is a strategic investment, not a cost center. Use your backlog to justify and time your training commitments.

Why Participating in ABC’s Backlog Survey Matters

ABC’s Construction Backlog Indicator is only as strong as member participation. The monthly survey typically takes less than three minutes to complete-two data points and a submit button. That small investment of time yields the only forward-looking construction backlog indicator of its kind, built specifically from responses by commercial and industrial contractors.

When more South Texas contractors respond, the regional and national data more accurately reflects conditions on the ground. A robust sample from this region improves the quality of the KPI for everyone-including you. The alternative is making strategic decisions based on anecdotal evidence or data that skews toward other regions.

Here is how to get involved:

• Request the survey link from Erika Walter at ABC.
• Review the full data series and related economic analysis at abc.org/economics.
• Complete the survey each month using your own backlog and revenue figures, contributing to the dataset that shapes industry understanding.

Participation helps preserve the CBI as the industry’s leading indicator-and it costs nothing but three minutes. Calculate your own backlog. Then contribute the data that guides the wider construction industry.

Putting It All Together: A Backlog Playbook for Late 2026

Here is how to turn everything in this article into a working plan for the rest of 2026.

Step 1: Calculate your backlog in months. Pull your remaining contract value and trailing 12-month revenue. Apply the formula. Do this at the company level and by segment. Know your number before you do anything else.

Step 2: Benchmark against ABC CBI and your own history. Compare your backlog to the national 9.1-month reading, to the South region’s higher figure, and to your own five-year average. If you are substantially below peers, business development needs attention. If you are substantially above, pressure-test your capacity, your workforce plan, and your cash flow.

Step 3: Adjust bidding, hiring, and cash plans. Let your backlog number-not sentiment-drive decisions. Set specific 12- and 24-month backlog targets linked to revenue and margin goals. A 9.1-month national backlog, with the South leading, signals opportunity but also rising competitive and workforce pressures that require disciplined management of the construction backlog.

Schedule a standing monthly “backlog review” using your dashboard, ABC economic releases, and field feedback. Make it a non-negotiable calendar item for your leadership team. Track whether your backlog is rising or falling, whether the quality mix is improving, and whether your project schedules and resource availability support the load.

A large construction backlog is not inherently good or bad-is a large construction backlog bad? Only if it outstrips your capacity to deliver projects effectively, safely, and profitably. Managed well, your backlog is the engine of your construction business. Ignored, it becomes a liability.

Know your number. Benchmark it monthly. Participate in the survey that produces the industry’s leading indicator.

Frequently Asked Questions About Construction Backlog

These questions address practical issues that South Texas nonresidential contractors commonly raise when applying backlog metrics to their own operations.

How often should I recalculate my construction backlog?

Recalculate your construction backlog at least monthly, timed to your financial closes. For fast-moving specialty contractors with high bid volumes, a biweekly update may be warranted. Significant contract wins, cancellations, or scope changes should trigger an immediate update rather than waiting for month-end.

Regular updates improve the accuracy of staffing, equipment, and cash-flow decisions. If you only calculate backlog once a quarter, you are essentially making hiring and bidding decisions based on a snapshot that may be 60 to 90 days stale. Monthly recalculation takes minutes with the right construction accounting software and pays for itself in better resource allocation.

Should I include unsigned proposals or letters of intent in my backlog?

No. Firm backlog consists only of signed contracts and approved change orders. Awarded-but-not-executed work, preferred bidder status, and strong verbal commitments are part of your business development pipeline-sometimes called “soft backlog”-but should be tracked separately in financial reports and pipeline reports.

When comparing your backlog to ABC’s Construction Backlog Indicator, use only firm backlog. Mixing soft and firm backlog can lead to over-hiring and cash-flow strain if expected contract awards are delayed or lost. Track both, but keep them in separate columns.

How does backlog relate to my bonding capacity and bank covenants?

Sureties and lenders look at your backlog to assess both future revenue and execution risk. They pay close attention to individual job size, owner type, and margin expectations within your portfolio. A well-balanced backlog-diversified by owner, sector, project size, and delivery method-typically strengthens your case for expanded bonding capacity.

Proactively share clean, well-documented backlog and WIP reports with your bonding agent and banker, not just at renewal time. This transparency builds confidence in your company’s ability to manage current projects and take on new obligations. A strong backlog that reflects financial health and balanced risk is one of your best tools for accessing the capital and bonding you need for strong growth.

What should I do if my backlog is strong but confidence in margins is slipping?

Review the mix of construction projects in your backlog. Identify which jobs carry margins below your target and which carry elevated risk-scope ambiguity, difficult owner payment history, or thin contingencies. Tighten your go/no-go criteria for new pursuits. Prioritize negotiated work and repeat clients where your construction firm has greater pricing power and control over change orders.

Monitor field performance and job-cost reports closely to protect profit margins on existing backlog while adjusting pricing on future work. If total costs on current projects are trending above estimate, take action now rather than hoping margins recover downstream. Contractors with strong volume but weak margins sometimes benefit from declining low-value pursuits and focusing energy on fewer, better-quality projects.

Where can I get help interpreting ABC economic data for my company?

ABC South Texas chapter staff and educational events offer guidance on applying CBI and other KPIs to company planning. ABC’s national economics team publishes regular commentary at abc.org/economics, where members can explore detailed data series and industry forecasts.

Combine ABC indicators with your own historical financials and backlog reports-ideally with help from your CPA or a construction-savvy financial advisor. The most valuable insights come from layering industry benchmarks onto your own trends. That combination helps you see not just where the construction market is headed, but where your construction company sits within it. The data provides valuable insights only when applied to the decisions that matter: what to bid, who to hire, and how to plan cash for the months ahead.