The NCS Credit Lien Index measures trends in mechanic's lien activity across the U.S. construction industry. A higher Index score reflects increased lien filing activity, a signal of payment stress, disputes, and financial strain across the construction supply chain. A lower score indicates decreased filing activity, which may reflect improved payment conditions, fewer projects reaching lien-triggering stages, or both.
The Lien Index registered 48 in Q2 2026, a 17% decline from the revised Q1 score of 58, and a 21% drop from Q2 2025's reading of 61.
Worth noting: Q1’s initial reading also looked like a decline when first published (51, a 7% drop from Q4). Once recording offices caught up on their filing backlogs, Q1 revised upward to 58, actually landing above Q4’s revised score of 55. Q2’s current reading of 48 will likely see a similar upward revision as more filings are recorded and indexed in the coming months. That doesn't mean this quarter's drop isn’t real, current data is still the best available signal, but it's a reminder that the freshest quarter's score is likely to be the lowest it'll go, not the final number.
Looking at the fully revised trend line rather than any single quarter, the Index has held in a broadly elevated range of 55 to 61 since early 2025. Whether Q2 represents a genuine break from that range or simply hasn’t caught up yet won’t be clear until next quarter’s revision.
Every region posted a decline in lien activity this quarter, but the size of that decline varied widely. The Midwest saw the sharpest drop of any region, cutting a quarter of its value on top of an already soft Q1 reading, and now sits well below the neutral benchmark at 30. The West and Northeast also fell below 50, to 43 and 48 respectively, though the Northeast barely moved by comparison, holding close to flat while every other region’s lien activity fell by double digits. At 57, lien activity in the South remains elevated even after its own steep drop, a pattern that's held for several consecutive quarters now.
The top 5 states for lien activity were (in order of volume): Texas, Florida, California, Nevada, and Georgia.
Architecture billings kept sliding through the second quarter. The AIA/Deltek Architecture Billings Index fell from 48.3 in April to 44.5 in May, its softest reading since January, and the national score still hasn’t crossed the 50-point growth threshold since January 2023. Contractor backlog told a different story, for a while. Associated Builders and Contractors reported backlog climbing to 8.8 months in April and 9.1 months in May, a nearly three-year high, before slipping back to 8.8 months in June. The Dodge Momentum Index also grew in April and May, up 6.2% and 5.9% respectively, before pulling back 1.9% in June to 271.7. June figures for ABI were not yet published at the time of writing.
That split, softening billings against a growing backlog, matches a pattern that’s held for months: growth is concentrated, not broad-based. ABC's own numbers make the point directly. Contractors under contract for data center work reported roughly three months more backlog than those without one in May, a gap that held into June (11.0 months versus 8.5). Dodge’s data tells a similar story. The commercial segment of its planning index was up 41.2% year over year in May, but only 6.6% with data centers stripped out. Billings weakness at architecture firms, on the other hand, spread across nearly every specialization and region in May, a sign the gap between data center-adjacent work and everything else may be widening rather than closing. June’s Dodge data added a wrinkle: the pullback was concentrated in the same data center-driven commercial segment as it moderated from recent highs, while institutional planning grew 10.9% and, according to Dodge, planning activity accelerated across nearly every other sector that month.
Bankruptcy activity kept climbing too, though the pace shifted month to month. Commercial Chapter 11 filings rose 42% year over year in April, alongside a 46% jump in Subchapter V small business elections. By May, Subchapter V elections were still up 36% year over year, extending a growth streak that’s continued for the better part of a year, but commercial Chapter 11 filings rose a more modest 6% from April’s total. June data showed both measures reaccelerating: Subchapter V elections were up 28% year over year and commercial Chapter 11 filings jumped 29%. Across the first half of 2026, Subchapter V elections are up 50% and commercial Chapter 11 filings are up 28% from the same period last year. Small businesses in construction and adjacent trades remain the segments most exposed to payment delays and project slowdowns.
The headwind that was just emerging at the end of Q1 fully materialized this quarter. The Iran conflict, which began in February, has disrupted shipping through the Strait of Hormuz and pushed oil prices toward $100 a barrel. This disruption fed directly into construction input costs: according to the Associated General Contractors of America, steel and aluminum producer prices posted their largest year-over-year gains since the 2022 supply chain disruptions, with AGC chief economist Ken Simonson noting the increases have accelerated every month since tariffs took effect. The Federal Reserve, meanwhile, held its benchmark rate steady in June for a fourth consecutive meeting. Its policy statement cited “elevated uncertainty” tied in part to the Middle East conflict, and officials’ projections shifted toward a possible rate hike later this year rather than the cut markets had expected. That keeps construction borrowing costs elevated for longer than anticipated earlier in the year.
Fewer liens filed this quarter. That’s not the same as less risk. This quarter’s real story sits in bankruptcy filings, input costs, and a construction pipeline that’s still leaning on one sector to carry the numbers. Credit risk in this market isn’t measured by the Lien Index alone. Serve preliminary notices and secure mechanic’s liens and bond claims on every construction project. File UCCs on every customer with an open line of credit.
The AIA/Deltek Architecture Billings Index (ABI) posted its softest reading since January in May, falling to 44.5 after April’s 48.3. AIA Chief Economist Richard Branch tied the decline directly to conditions that “weighed on architect billings in May,” pointing to the Iran conflict and higher energy costs. Inquiries into new work fell below 50 for the first time in four months, and the value of newly signed design contracts also weakened.
Associated Builders and Contractors (ABC) reported backlog climbing to 9.1 months in May, the highest reading in nearly three years, even as its Construction Confidence Index components for sales, profit margins, and staffing all slipped. Chief Economist Anirban Basu attributed the gain to data center investment, noting the increase “largely reflects the massive data center investments taking place across the nation.” Contractors with data center work under contract reported backlog of 11.6 months, compared to 8.6 months for those without. Backlog eased to 8.8 months in June, though Basu noted it remained longer than any point from September 2023 through April 2026, and the divide persisted, 11.0 months of backlog for contractors with data center work under contract, versus 8.5 months for the 87% without it.
Dodge Construction Network reported the Dodge Momentum Index up 5.9% in May to 275.7 (later revised to 277.1), its second consecutive monthly gain. Sarah Martin, Director of Economic Research at Dodge, said "nonresidential planning continued to stabilize throughout May," though she noted labor constraints, material costs, and supply chain pressure remain a drag on owner sentiment. Growth stayed concentrated in data centers, though healthcare, retail, and office planning also gained ground for the first time in months. That two-month growth streak ended in June, when the index fell 1.9% from the revised May figure to 271.7, as data center momentum moderated from its recent pace, though Martin noted planning activity accelerated across nearly every other sector that month.
Epiq Bankruptcy (Epiq AACER) reported Subchapter V small business elections up 36% year over year in May, extending a growth streak that’s continued for the better part of a year. Michael Hunter, Vice President of Epiq AACER, said the data “highlights the cumulative impact of elevated interest rates, persistent inflation and higher operating costs” on small businesses. Commercial Chapter 11 filings, meanwhile, grew a more modest 6% from April, a signal the sharpest edge of commercial distress may level off even as small business elections keep climbing. That signal proved temporary: June data showed Subchapter V elections up 28% year over year and commercial Chapter 11 filings up 29%, with both measures up roughly 30 to 50% across the first half of 2026 overall.
*Nationwide, recording offices manage a backlog of requests. The Index data is adjusted and revised accordingly. The Q4 2025 Lien Index score was revised from 48 to 55 as additional filing data became available.