Workforce Shortages Challenge Construction Firms in 2025

88% of firms with craft workers report openings, and 83% say those roles are as hard or harder to fill than last year.
Tariffs, immigration enforcement, and federal underinvestment in workforce training are worsening shortages and delaying projects.
Contractors are raising pay, investing in training, modernizing recruiting, and exploring AI and robotics to boost productivity.
Despite challenges, 62% of firms plan to expand headcount in 2026, underscoring strong long-term demand for construction talent.

Key Takeaways

A Difficult Year for Construction Hiring

According to AGC, against a backdrop of slowed construction spending and cautious project owners, contractors are still grappling with a severe labor crunch. Nearly nine in ten firms employing craft workers report openings, while four in five are also searching for salaried staff. Skilled roles—from mechanics to electricians—remain the hardest to fill, with superintendents topping the list among salaried positions.

Candidate quality is a major hurdle. Over half of firms say applicants lack the necessary skills, certifications, or reliability, an issue tied to limited federal investment in construction-focused education and training.

The Impact of Policy Shifts

Survey results show policy uncertainty is compounding workforce issues.

Tariffs: 41% of firms raised prices and 39% stockpiled materials in anticipation of rising costs.
Immigration Enforcement: More than a quarter of firms report disruptions, ranging from worker attrition to subcontractor losses. Impacts are particularly acute in states like Georgia and Virginia.
Government Policy Changes: 26% of firms cited project disruptions tied to shifts in spending, taxes, or regulations, up from 20% last year.

How Firms Are Adapting

Despite challenges, contractors are leaning into multiple strategies to attract and retain workers:

Pay & Benefits: 95% of firms raised wages this year, with many increasing pay more aggressively than in 2024. Construction wages now average $39.69 per hour, nearly 9% higher than the private sector average.
Recruitment Innovations: 55% use digital outreach, 52% engage with schools and technical programs, and 30% rely on staffing firms. Larger firms lead in adopting these approaches.
Technology Adoption: Contractors are increasingly optimistic about robotics and AI. Nearly half expect these tools to automate repetitive tasks and enhance jobsite safety, while only 12% fear job losses.

Project Delays Remain Tied to Worker Shortages

Labor shortages continue to be the top cause of project delays, cited by 45% of firms—above material lead times, permitting, or owner-driven changes. About two-thirds of firms also experienced projects being postponed, canceled, or downsized in the past year.

Looking Ahead

Despite a challenging environment, 62% of firms expect to expand their headcount in 2026. But the survey underscores a need for policy action: greater federal investment in construction training programs and expanded legal pathways for immigrant workers.

As AGC emphasized, without stronger workforce development and immigration reforms, shortages will continue to delay infrastructure, housing, and industrial projects—slowing broader economic growth.