Employment Data Echoes Findings in Construction Association’s New 2026 Outlook, Which Shows Most Contractors Have “Dampened” Expectations for Most Market Segments Amid Economic, Labor Worries
Construction employment declined by 11,000 positions in December, with modest decreases in both residential and nonresidential sectors, according to an analysis of new government data the Associated General Contractors of America released today. Association officials noted that the new employment figures reflect the same contractor concerns identified in the group’s newly-released 2026 Construction Hiring & Business Outlook.
“Nonresidential construction employment expanded modestly in 2025 but was held back by unwillingness of many owners to commit to projects in the light of ongoing policy turmoil,” said Ken Simonson, the association’s chief economist. “Based on our recent survey, it appears 2026 will also present only limited opportunities for growth.”
Construction employment in December totaled 8,303,000, seasonally adjusted, a decrease of 11,000 from November. Headcount rose by 14,000 jobs or 0.2 percent during the past 12 months, just under the 0.4 percent growth rate in total nonfarm payroll employment. November figures were also revised downward, indicating the labor market was weaker heading into December than earlier estimates suggested
Nonresidential construction firms shed 7,800 jobs in December, accounting for most of the sector’s monthly losses. Within that category, nonresidential specialty trade contractors lost 8,900 jobs and nonresidential building contractors lost 1,200 jobs. The only segment to add workers was heavy and civil engineering construction, which gained 2,300 jobs for the month. Residential construction employment also weakened, declining by 3,100 jobs. The drop was driven by a 4,200-job decrease in residential building, partially offset by a 1,100-job increase among residential specialty trade contractors.
Average hourly earnings for production and nonsupervisory employees in construction—including most onsite craft workers and many office staff—increased 4.5 percent over the year to $38.08. That gain exceeded the 3.6 percent rise in pay for such workers in the overall private sector. The unemployment rate among workers with recent construction experience jumped up to 5.0 percent in December and is now above the overall nonfarm rate of 4.1 percent (not seasonally adjusted).
Association officials noted that construction firms have “dampened” expectations for most market segments in 2026, except for the construction of data centers, power projects and water & sewer facilities, according to the Construction Hiring & Business Outlook the association and Sage released yesterday. That same report did find, however, that most construction firms plan to expand their headcount this year, if they can find enough qualified workers to hire amid persistent labor shortages.
“Even though they are less enthusiastic about demand for most types of construction work this year, most firms expect to have enough work to expand their headcount,” said Jeffrey D. Shoaf, the association’s chief executive officer. “This assumes they will be able to find enough qualified workers to hire amid chronic federal underinvestment in construction workforce development.”
View the construction employment data.