Construction Employment Enters New Territory—Here’s What It Means

KEY POINTS

• For the first time since at least 2020, construction unemployment has fallen well below the overall U.S. unemployment rate, representing a fundamental shift across the industry.

• Recent ICE enforcement actions may be disproportionately affecting construction labor supply, adding pressure to an already tight market and reshaping workforce competition between general and trade contractors.

• The construction labor market has entered new territory, and as shortages persist, the implications will ripple through project planning, pricing, and strategy for the foreseeable future.

Construction Employment Data: A Fundamental Shift

This year’s construction employment data illustrates something unusual and remarkable. For the first time since at least 2020, construction unemployment has fallen well below the overall U.S. unemployment rate.

This represents a fundamental shift. Historically, construction operated with higher unemployment volatility than the broader economy.

Today’s numbers tell a different story.

The Unemployment Numbers

Construction unemployment ended August at 3.9%, well below the 4.3% overall rate for the total economy. This marks the second time that construction unemployment has fallen below the overall rate in 2025.

Historically speaking, it is extremely rare for construction unemployment to fall below the overall level, yet it has happened twice this year and once last year. These are the only times in the last 20-plus years this has happened. Clearly, something is changing in construction.

Construction unemployment, shown in the image above, ended August at 3.9%, well below the 4.3% overall rate for the total economy. This marks the second time construction unemployment has fallen below the overall rate this year. Image: ConstructConnect, Data US Bureau of Labor Statistics

The ICE Enforcement Factor

Recent ICE enforcement actions may be disproportionately affecting the supply of construction labor, adding pressure to an already tight market. This means the competition for workers among general contractors and trade contractors is becoming even more severe.

Unlike typical seasonal fluctuations, this supply constraint could persist for an extended period, fundamentally reshaping construction labor availability.

What It Means for Construction

The well-documented skilled labor shortage in trades jobs is clearly shown in the data as worse than ever before. And now, with enforcement actions potentially reducing the available workforce, companies face an even tighter squeeze.

For construction firms, this means continued upward pressure on wages and an urgent need for creative recruitment and retention strategies. For project owners, expect labor costs to remain a significant driver of overall construction pricing.

As we head into fall and winter, the question isn’t whether labor will remain tight—it’s whether the industry can adapt quickly enough to meet demand. The traditional seasonal cycle may reassert itself, but the underlying structural labor shortage appears here to stay.

The construction labor market has entered new territory, and the implications will ripple through project planning, pricing, and strategy for the foreseeable future.

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About ConstructConnect

At ConstructConnect, our software solutions provide the information that construction professionals need to start every project on a solid foundation. For more than 100 years, our keen insights and market intelligence have empowered commercial firms, building product manufacturers, trade contractors, and architects to make data-driven decisions, streamline preconstruction workflows, and maximize their productivity. Our newest offerings—including our comprehensive, AI-assisted software—help our clients find, bid on, and win more projects.

ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.  

For more information, visit constructconnect.com