How is your business doing these days? And how about your market? The answers depend on whom you ask.
Some contractors are riding one of the biggest building booms in years. Others are watching backlogs shrink and competing harder for work.
Both are telling the truth.
What’s Going On?
Associated Builders and Contractors’ (ABC) Construction Backlog Indicator fell sharply in July from 8.8 months to 8.0 months. Hidden in that data is this: Contractors working on data centers reported 11.4 months of backlog in June compared with 7.5 months’ backlog for contractors without data center work, says ABC Chief Economist Anirban Basu.
Contractors with data center contracts have nearly a third of a year of extra work.
But the data center boom is not confined to companies building data centers. It is creating demand upstream—for equipment, power generation, factories and other types of construction.
Generac, known for its backyard generators, is investing $250 million “to equip multiple factories to make beefed-up versions of its generators for data centers,” Reuters says.
The “vast AI-fueled buildout of data centers,” along with rising infrastructure spending, have increased demand for large equipment from John Deere, Reuters says. Quarterly net sales in Deere’s construction and forestry segment rose 18% from a year earlier.
Thus, the data center surge appears to be creating economic activity well beyond the data center job site. And the divide is stark. ABC says data center construction jumped 46% in June 2026 year over year. Private non-residential construction spending excluding data centers fell 7.9% over the same period.
FMI, in its Q2 2026 North American Engineering and Construction Outlook, says office construction is up 6% in 2026, “driven entirely by data centers, which will account for over half of all private office spending.” In contrast, some staple wall and ceiling sectors are in decline—multifamily (-1%), single-family (-2%) and lodging (-4%).
And the divide will likely become even wider. Global spending on data centers could reach $7 trillion by 2030, McKinsey & Co. estimates.
What Are You Built to Do?
Obviously, not every wall and ceiling contractor can pivot into data centers. Nor should they. Other markets may offer opportunities depending on geography and a contractor’s capabilities.
That requires thinking differently about your business. Construction companies tend to define themselves by what they do: “We’re a framing contractor.” “We’re a ceilings contractor.” “We do exterior insulation and finish system (EIFS) work.”
But I ask: What markets are you built to serve?
Instead of thinking of what trade you’re in, think of where your company is best—or could be—positioned to compete. A contractor that identifies two or three promising markets can develop expertise, relationships and a reputation within them. That’s true regardless of which side of the great divide you’re on.
So, don’t simply follow the construction headlines. Figure out where the money is moving and whether your company is equipped to go there.
And don’t forget: The hot market today won’t necessarily be the hot market tomorrow. So, I’m not saying pursue data center work. I’m saying learn to recognize where demand is shifting and then be intentional about where you compete, what capabilities you develop and where you invest your resources.
Mark L. Johnson writes for the walls and ceilings industry. He is also the editor of BuildSteel.org. He can be reached via LinkedIn.com/in/markjohnsoncommunications.
