According to data released today by the US Bureau of Labor Statistics:
- The construction industry added 4,000 jobs on net in January. Year-over-year, industry employment has risen by 178,000 jobs, or an increase of 2.2%.
- Nonresidential construction employment increased by 4,400 positions on net, with growth in 2 of the 3 subcategories.
- "Slowing demand for labor on the residential side of the industry could very well benefit nonresidential contractors."
Press Release from Associated Builders and Contractors, Inc (ABC)
ABC: Nonresidential Construction Adds Modest 4,400 Jobs in January
WASHINGTON, Feb. 7—The construction industry added 4,000 jobs on net in January, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 178,000 jobs, an increase of 2.2%.
Nonresidential construction employment increased by 4,400 positions on net, with growth in 2 of the 3 subcategories. Nonresidential specialty trade added the most jobs, increasing by 5,600 positions, followed by nonresidential building, which added 1,100 jobs. Heavy and civil engineering lost 2,300 jobs last month.
The construction unemployment rate rose to 6.5% in January. Unemployment across all industries decreased from 4.1% in December to 4.0% last month.
"Construction hiring has slowed to a crawl since October, with the industry averaging just 6,000 net new jobs per month," said ABC Chief Economist Anirban Basu. "This is largely a reflection of weakness in the residential sector, which actually lost 200 jobs in January. Given the ongoing effects of high interest rates and the sharp decline in the number of housing units under construction, residential employment should continue to pull back over the next few quarters."
"Slowing demand for labor on the residential side of the industry could very well benefit nonresidential contractors," said Basu. "Average hourly earnings for construction workers were up 4.1% on a year-over-year basis in January. While that’s still fast wage growth by historical standards, it’s also the smallest annual increase since 2021. With a majority of contractors expecting to expand their staffing levels over the first half of the year, according to ABC’s Construction Confidence Index, the availability of workers who would otherwise work on the residential side of the industry should help nonresidential wage growth return to healthier levels."
Press Release from Associated General Contractors of America (AGC)
Tightening Labor Market Conditions, Amid Changes in Immigration Policy, Continued Under-Investments in Career & Technical Education, Could Undermine Employment Growth as Firms Struggle to Find Workers
Construction sector employment increased by 4,000 positions in January as gains in nonresidential construction offset the decline in the residential sector, according to an analysis of new government data the Associated General Contractors of America released today. Association officials cautioned, however, that tightening labor market conditions may undermine future construction industry hiring.
“The already tight labor market is getting tighter in the construction sector,” said Jeffrey Shoaf, the association’s chief executive officer. “Absent new investments in construction training and work authorization programs, it will be hard for firms to keep pace with demand.”
In January, nonresidential construction firms added 4,400 workers, with gains of 1,100 in building construction and 5,600 in specialty trades, while heavy and civil engineering firms shed 2,300 jobs. Residential construction employment dipped by 200, as residential building added 1,900 positions, offset by a 2,100-job decline in specialty trades.
Construction employment in January totaled 8,291,000, seasonally adjusted, an increase of 4,000 from December. Headcount has increased by 178,000 jobs or 2.2 percent during the past 12 months. Over the past 12 months, employment at nonresidential construction firms grew by 2.9% (137,800 jobs), a slight slowdown from the 3.1% increase (145,500 jobs) in the previous year. Residential construction employment rose by 1.2% (40,100 jobs) from January 2024 to last month, down from 1.4% (46,300 jobs) in the prior 12 months.
A separate government report this week showed there were 217,000 job openings in construction at the end of December. Construction job openings—measured as a snapshot of available positions on the last day of each month—have declined for five consecutive months, dropping 50 percent year-over-year in December 2024. The sharp decline in openings suggests a turning point—potentially driven by hiring difficulties, a cooling labor market, or growing uncertainty about impending policy changes.
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 3.8 percent over the year to $36.54 per hour. Overall private sector pay for production workers rose 4.2 percent, to $30.84. That difference in hourly pay constituted a wage “premium” of just over 18 percent compared to the overall private sector.
Association officials noted that nearly 80 percent of firms reported they are having a hard time finding enough workers to hire, according to the recently released AGC of America/Sage 2025 Construction Hiring & Business Outlook. They added that a growing number of firms are reporting workers are not showing up to job sites amid fears of increased immigration enforcement activities.
“The only way firms will be able to keep pace with strong demand for construction is if there are enough people available to build,” Shoaf said. “That is why federal officials need to boost funding for construction education programs and expand lawful work authorization programs for people with construction skills.”
