Construction industry needs 349,000 new workers in 2026: ABC

Chicago Construction News staff writer

The construction industry will need to attract an estimated 349,000 net new workers in 2026 just to meet demand for services, according to a proprietary model released Tuesday by Associated Builders and Contractors. That number is projected to rise to 456,000 in 2027 as construction spending growth resumes for the first time in years.

ABC’s model converts anticipated increases in construction spending into additional labor demand, estimating roughly 3,450 new jobs per $1 billion in added spending. The analysis factors in current job openings, industry unemployment, and projected retirements.

“If current consensus forecasts hold true, the construction industry will need to bring in 349,000 new workers in 2026 just to keep the supply and demand for labor in equilibrium,” said ABC Chief Economist Anirban Basu. “Failing to do so will worsen labor shortages, especially in certain occupations and regions, placing further upward pressure on labor costs.”

Basu said the number of new workers needed in 2026 is lower than in recent years due to modest spending growth forecasts.

“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,” he said. “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. Nonresidential specialty trade contractors have added 95,000 jobs since August 2024, demonstrating that certain sectors of nonresidential construction hiring are going strong.”

Michael Bellaman, ABC president and CEO, said multiple factors are driving labor shortages. “ABC’s 2026 workforce shortage analysis shows a series of macrodynamics at play in the industry,” he said. “These include an aging and retiring workforce, immigration enforcement, high materials prices, tariffs, office vacancies and rapidly evolving technologies and innovation. Despite these variables, the analysis shows the construction industry still faces an urgent need for talent to build and rebuild America’s infrastructure.”

Basu pointed to occupations and regions under stress. “Even if construction spending fails to exceed expectations this year and next, contractors will continue to struggle to fill open positions, especially in certain occupations and regions. For instance, demand for electricians capable of precision wiring has surged due to the rapid increase in data center construction. Recent industry efforts to accelerate skilled worker development have helped, but the industry is effectively swimming upstream. About one-fifth of all electricians are over 55. Worker shortages also remain more severe in areas associated with industrial megaprojects, including semiconductor fabrication facilities.”

He also cited immigration as a wildcard. “While the extent to which undocumented workers have exited the workforce remains unclear, data regarding border encounters indicate that the flow of undocumented workers into the country fell precipitously in 2025 while voluntary deportations accelerated.”

“This slight dip in the industry’s chronic, massive worker shortage offers practical lessons,” Bellaman said. “These include federal lawmakers introducing a market-based worker visa system; reskilling and upskilling workers on new technology and innovation; and deploying ABC’s all-of-the-above workforce development strategy to bring new workers into the industry and educate them through both industry-driven and government-registered apprenticeship programs.

“The construction industry does not have to fall off the workforce shortage cliff. 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.”