The U.S. construction industry will need to attract 439,000 new workers in 2025 to keep pace with demand for construction services, according to a projection released by Associated Builders and Contractors (ABC). The organization estimates that the need for new hires will rise to 499,000 in 2026 as construction spending accelerates, likely spurred by lower interest rates.
ABC Chief Economist Anirban Basu said that while the industry has seen an influx of younger workers, the labour supply still falls short of demand. “If it fails to do so, industrywide labour cost escalation will accelerate, exacerbating already high construction costs and reducing the volume of work that is financially feasible,” Basu said. He noted that average hourly earnings in the sector have risen by 4.4% over the past year, outpacing wage growth across all industries.
Workforce dynamics improve, but challenges persist
ABC’s analysis found that the median age of construction workers has dropped below 42 for the first time since 2011, slowing the rate of retirements. However, Basu cautioned that contractors will still face difficulties filling roles, particularly in regions with large-scale manufacturing and data centre projects. These projects account for more than 20% of current non-residential construction spending and are absorbing a significant portion of the workforce.
ABC’s proprietary model, which converts increases in construction spending into labour demand, suggests the industry requires approximately 3,550 workers for every billion dollars of additional spending. The analysis also incorporates factors such as job openings, unemployment rates, and projected retirements.
Michael Bellaman, president and CEO of ABC, highlighted the importance of workforce development initiatives. “The data on the number of young people choosing a career in construction suggests that employing practical technology and innovation in educational programs and on jobsites helps maximize the productivity and efficiency of the construction workforce,” he said.
Immigration policy and legislative action could impact shortages
ABC noted that external factors, such as immigration policy and legislative changes, could affect the labour market. Basu warned that potential shifts in immigration policy may constrain worker availability, despite faster-than-expected immigration in recent years. Bellaman advocated for a merit-based visa system to address labour shortages, stating that it would allow individuals to work legally in the construction industry and contribute to the workforce.
Bellaman also urged policymakers to support measures that reduce regulatory burdens, expand workforce development, and promote open competition. “President Trump and the 119th Congress have a significant opportunity to advance policies and regulations that protect free enterprise,” he said.
The construction industry employs approximately 8.3 million workers and is poised to grow as demand for infrastructure and development projects increases. ABC emphasized the importance of long-term strategies to bolster the talent pipeline and meet future needs.
