Dive Brief:
- The construction industry will need to attract an estimated 349,000 net new workers to keep up with demand this year, according to data from Associated Builders and Contractors. That number is set to rise to 456,000 in 2027, as spending growth is poised to resume.
- That gap is certainly sizable, but it also represents a precipitous drop. In 2025, ABC predicted a need for 439,000 new workers. In each of the two years prior, the group foresaw the need for more than half a million fresh faces.
- Failing to bring in the needed workers, “will worsen labor shortages, especially in certain occupations and regions, placing further upward pressure on labor costs,” said Anirban Basu, chief economist for ABC, in the release.
Dive Insight:
Basu tacked the shrinking labor gap in part to modest growth forecasts in construction spending for 2026 and 2027. However, he hedged that the forecasts could prove overly conservative and that demand may, in fact, be higher than indicated.
That would likely arise if “project financing costs decline unexpectedly or if lingering policy uncertainty resolves itself quickly and favorably,” Basu said. He also noted that nonresidential specialty trade contractors have added 95,000 jobs since August 2024, “demonstrating that certain sectors of nonresidential construction hiring are going strong.”
But contractors may find themselves strapped to hire staff due to experienced workers nearing the end of their careers, as well as ongoing political and economic uncertainty, said Mike Bellaman, ABC president and CEO, in the release.
“Given current assumptions regarding prospective industry growth, a majority of new worker demand in 2026 will be attributable to retirement rather than increased demand for construction services, despite the ongoing boom in artificial intelligence infrastructure buildout,” Basu said.
Indeed, the construction industry has had an age problem for years, with the median worker closer to retirement than the total U.S. labor force at large. Nonetheless, there may be hope to shore up numbers, as Gen Z, those born between 1997 and 2012, are more likely to join construction occupations, per the National Association of Home Builders.
Meanwhile, Basu described immigration policy as a “potential wildcard for the industry’s labor force dynamics.” It remains unclear to what extent unauthorized workers have departed the U.S. construction workforce, he said, but data indicates “the flow of undocumented workers into the country fell precipitously in 2025 while voluntary deportations accelerated.”
Despite the shrinking gap, Bellaman reiterated the challenges construction employers will have finding workers, especially those with in-demand skills.
“The construction industry does not have to fall off the workforce shortage cliff,” said Bellaman. “To avoid this outcome and shore up the talent pipeline, now is the time for action—not complacency—to reaffirm that the construction industry offers careers of choice in today's complex job market.”
