The construction industry needs to attract an estimated 349,000 net new workers in 2026 to meet demand for construction services, according to a proprietary model developed by Associated Builders and Contractors (Washington, D.C.). That number will increase next year, with an estimated 456,000 new workers needed in 2027 to meet demand as construction spending growth is poised to resume for the first time in years.
ABC’s proprietary model uses the historical relationship between inflation-adjusted construction spending growth (sourced from the U.S. Census Bureau’s Construction Put in Place survey) and payroll construction employment (sourced from the U.S. Bureau of Labor Statistics) to convert anticipated increases in construction outlays into additional demand for construction workers at a rate of approximately 3,450 jobs per $1 billion in additional construction spending. This model also embeds the current level of job openings, industry unemployment and projected industry retirements into its computations.
Failing to bring in nearly 350,000 new workers “will worsen labor shortages, especially in certain occupations and regions, placing further upward pressure on labor costs,” said ABC Chief Economist Anirban Basu. “The industry will need even more workers than the model predicts should current spending projections prove overly conservative. That is a distinct possibility, especially if project financing costs decline unexpectedly or if lingering policy uncertainty resolves itself quickly and favorably.”
