Contractors Hot Line is part of the Catalyst Communications Network publication family.
Contractors Hot Line is part of the Catalyst Communications Network publication family.
The construction industry must attract an estimated 439,000 new workers in 2025 to meet rising demand for construction services, according to data released Jan. 24 by Associated Builders and Contractors (ABC).
The shortage is expected to grow to 499,000 new workers in 2026 as spending increases in response to anticipated lower interest rates.
“While the construction workforce has become younger and more plentiful in recent years, the industry still must attract 439,000 new workers in 2025 to balance demand and supply,” ABC Chief Economist Anirban Basu said.
“If it fails to do so, industrywide labor cost escalation will accelerate, exacerbating already high construction costs and reducing the volume of work that is financially feasible. Average hourly earnings throughout the industry are up 4.4% over the past 12 months, significantly outpacing earnings growth across all industries.”
ABC’s model links inflation-adjusted construction spending growth with employment demand. Factors like elevated interest rates in 2025, a younger workforce and slowing retirements will ease some pressure, but labor shortages are expected to remain a challenge, particularly for manufacturing and data center megaprojects.
“The U.S. construction industry’s efforts to hire more workers to replace retirees and meet the demand for new construction projects gained momentum in 2024,” Michael Bellaman, ABC president and CEO said.
“There are also factors that could render this model overly conservative, meaning worker shortages could be more severe than predicted in 2025,” Basu said.
“Another solution to addressing the shortage is a merit-based, market-based visa system,” Bellaman said.
“ABC’s goal is to work with the Trump administration and Congress to create a visa system that allows people who want to contribute to society and work legally in the construction industry to do so."
“President Trump and the 119th Congress have a significant opportunity to advance policies and regulations that protect free enterprise, reduce regulatory burdens, expand workforce development and create a fair and level playing field for all construction workers, regardless of their labor affiliation,” Bellaman said.
“Legislation like the Tax Cuts and Jobs Act, the Employee Rights Act, the Fair and Open Competition Act and permitting reform can create the conditions for the construction workforce to rebuild America’s infrastructure. The construction industry thrives when all 8.3 million workers are given the opportunity to build America with fewer obstacles.”