Construction Backlog Crashes to 4-Year Low: Why Half Your Competitors Are About to Panic (And How You’ll Profit)
Executive Brief
The Gist: ABC members report the lowest construction backlog in 4 years this January, with nearly half predicting their competitors will see sales drop in the next 6 months—yet most remain oddly optimistic about their own prospects.
- The Trap: Waiting for “your turn” while competitors slash prices and steal your pipeline.
- The Play: Lock in Q2-Q3 projects NOW before the spring panic hits and margins collapse industry-wide.
Why This Matters
Here’s what 30 years in the trades taught me: when backlog drops, contractors get desperate. And desperate contractors do stupid things—like bidding jobs at cost just to keep crews busy.
This isn’t a “sky is falling” moment. It’s a market separation event. The ABC data shows something fascinating: everyone thinks they’ll be fine, but their competitors are doomed. That’s called cognitive dissonance, and it creates opportunity.
For residential contractors doing kitchen remodeling or HVAC upgrades, this means your commercial competitors are about to flood into your territory. They’ll undercut you on bathroom remodels and basement finishes just to cover overhead.
The smart play? Raise your close rate, not your marketing spend. Use better field service software to follow up faster, present proposals cleaner, and look more professional than the commercial guys scrambling for residential work. When backlog is low, the contractor who closes faster wins—not the one who bids cheaper.
Contractor FAQ
Q: Should I drop my prices to stay competitive during this backlog slump?
A: Absolutely not—lower prices attract price-shoppers who’ll cancel mid-project when a cheaper bid appears; instead, close faster and offer flexible start dates to win quality clients.
Q: How do I protect my profit margins when competitors start bidding at cost?
A: Shift to value-based selling (emphasize warranty, response time, and craftsmanship), pre-qualify leads harder, and walk away from projects where the client is shopping solely on price.
Q: Is this backlog drop a signal that the residential remodeling market is about to crash?
A: No—this is primarily a commercial construction indicator; residential service and remodeling typically lags 6-12 months behind commercial trends, giving you time to adjust strategy.
Q: What’s the “hidden opportunity” in a low-backlog environment that most contractors miss?
A: Supplier relationships improve dramatically when demand drops—negotiate better net terms, bulk discounts, and priority delivery now while material costs soften and distributors need your business.
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Author: Mike Warner
About the Founder Kore Komfort Solutions is an Army veteran-owned digital platform led by a 30-year veteran of the construction and remodeling trades. After three decades of swinging hammers and managing crews across the United States, I’ve shifted my focus from the job site to the back office. Our New Mission: To help residential contractors move from "chaos" to "profit." We provide honest, field-tested software reviews, operational playbooks, and insights into the AI revolution—empowering the next generation of trade business owners to build companies that last.