Year-over-Year Gains in Employment Slow Sharply from Previous 12 Months; Private Residential and Nonresidential Outlays Decline from May and from June 2024, Offsetting Small Gain in Public Spending
Construction employment edged higher by 2,000 jobs in July, as spending on projects underway in June decreased 0.4 percent from May, according to an analysis of two new government reports that the Associated General Contractors of America released today. Association officials pointed to ongoing tariff and labor uncertainty as the reason many construction owners may be scaling back planned projects.
“Employment growth in construction has slowed over the past year as uncertainty about tariffs and labor availability have caused owners to delay, stretch out, shrink, and cancel projects,” said, Ken Simonson, chief economist of the Associated General Contractors of America. “As more structures that broke ground in past years reach completion, it is likely that industry employment growth will taper off even more.”
Overall construction employment totaled 8,310,000, seasonally adjusted, in July. Employment rose by 96,000 or 1.2 percent from July 2024 to last month. That gain was less than half as much as the increase of 200,000 jobs (3.1 percent) in the previous 12 months, Simonson noted.
Employment increased by 6,400 from June to July and by 114,400 or 2.4 percent over 12 months at nonresidential construction firms—nonresidential building and specialty trade contractors, along with heavy and civil engineering construction businesses. That increase more than offset a decline of 4,400 employees for the month and 18,200 (-0.5 percent) over 12 months at homebuilders and residential specialty trade contractors.
Spending totaled $2.14 trillion at a seasonally adjusted annual rate in June. The total was 0.4 percent below the May rate and 2.9 percent lower than the June 2024 level.
The construction spending total was dragged down by decreases in private residential and nonresidential projects, which outweighed a small pickup in public work. Private residential spending declined 0.7 percent in June and 6.2 percent over 12 months, while private nonresidential spending slipped by 0.3 percent for the month and 4.0 percent year-over-year. Public construction outlays rose 0.1 percent from May to June and 5.2 percent over 12 months.
Association officials urged the Trump administration to continue completing trade agreements to provide greater tariff certainty. And they urged the administration to focus its immigration enforcement efforts on undocumented individuals who are engaged in additional criminal activity to avoid additional disruptions to construction and economic development projects.
“The more uncertainty there is, the less likely developers are going to invest in significant new construction projects,” said Jeffrey D. Shoaf, the association’s chief executive officer. “The more this administration can do to provide economic certainty, the more likely demand for construction will rebound.”
View the employment tables here.