Nonresidential construction employment increased by 6,400 positions on net, with growth in two of the three subcategories. Heavy and civil engineering added 6,000 jobs, while nonresidential specialty trade added 1,900 new positions. Nonresidential buildings lost 1,500 jobs for the month.

The construction unemployment rate remained unchanged at 3.4% in July. Unemployment across all industries rose from 4.1% in June to 4.2% last month.

“The construction industry has added just 7,000 jobs over the past four months,” said ABC Chief Economist Anirban Basu. “Industrywide employment is up only 1.2% over the past year, a lackluster pace of growth that historically is seen during and immediately following recessions. The good news for ABC members is that the nonresidential segment continues to outperform, growing at twice the pace of the industry at large over the past 12 months. Given that ABC member backlog remains healthy and hiring expectations remain relatively optimistic, according to ABC’s Construction Backlog Indicator, it’s possible that weakness will be confined to the residential side of the industry during the second half of 2025.” (Source)

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Spending was down on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending fell 0.3% for the month, while public nonresidential construction spending inched 0.1% higher.

“Nonresidential construction spending declined in June and has now contracted in six of the past seven months,” said ABC Chief Economist Anirban Basu. “Recent declines would be worse if not for ongoing increases in public nonresidential spending, which has risen 5.1% over the past year, significantly outperforming the 4.0% annual decline in private nonresidential activity. While ABC members remain optimistic about the second half of the year, according to ABC’s Construction Confidence Index, recent data pertaining to both the construction industry and the broader economy suggest weakness could persist in the months to come.” (Source)

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While the South maintains the longest backlog of any region, it was the only one to experience a decline in May. Only the Northeast has a longer backlog on a year-over-year basis, while the other three regions experienced annual declines.

ABC’s Construction Confidence Index reading for profit margins improved in May, while the readings for sales and staffing levels fell. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“The impacts of tariffs are increasingly apparent, with nearly 1 in 4 ABC member contractors reporting tariff-related project cancellations or delays in May,” said ABC Chief Economist Anirban Basu. “While 87% of survey respondents have been notified of tariff-related materials price increases, profit margin expectations actually improved in May.

“Of course, this survey was largely conducted prior to the announcement of the now-implemented 50% steel and aluminum tariffs, and margins will likely come under pressure in the coming months,” said Basu. “Despite this potential headwind, approximately six out of 10 contractors expect their sales to increase over the next two quarters, suggesting widespread optimism about the outlook.” (Source)

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Backlog has increased significantly over the past year for contractors with greater than $100M in annual revenues. While backlog has also risen modestly for the smallest contractors, it is down on an annual basis for those with $30M to $100M in annual revenues.

ABC’s Construction Confidence Index reading for profit margins improved in April, while the readings for sales and staffing levels fell, though the outlook for sales is higher than a year ago. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Nearly 22% of contractors had a project delayed or canceled in April due to tariffs, up from 18% in March, while 87% have been notified of tariff-related materials price increases,” said ABC Chief Economist Anirban Basu. “Contractors remain busy despite these headwinds; backlog rose in April and is now at the highest level since September 2023. While ABC members remain upbeat about the near-term outlook, the share of respondents that expect their sales to decline over the next six months rose to 19% in April, up 6 percentage points since the start of the year.” (Source)

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Nonresidential construction employment increased by 8,000 positions on net, with growth in two of the three subcategories. Nonresidential specialty trade added the most jobs, increasing by 4,900 positions, while nonresidential building added 3,600 jobs. Heavy and civil engineering lost 500 positions for the month.

The construction unemployment rate rose to 5.6%, while unemployment across all industries remained unchanged at 4.2% in April.

“The construction industry added a perfectly acceptable 11,000 jobs in April,” said ABC Chief Economist Anirban Basu. “Despite weak construction spending data for March and several economic headwinds, including high interest rates, tight lending standards and trade policy uncertainty, backlog remains sufficiently elevated to keep industry employment growing for the time being.

“That said, April is likely the last month of economic data largely unaffected by tariffs and tariff-related uncertainty,” said Basu. “The reference period for today’s jobs report is the pay period through April 12, which may exclude staffing decisions, or project cancellations or delays, related to recent trade policy developments. While the economic outlook has worsened in recent weeks, it remains unclear how the economy will respond in the coming months. For now, contractors remain broadly optimistic, according to ABC’s Construction Confidence Index, and industrywide staffing levels continue to expand.” (Source)

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The report shows the positive impacts of construction companies participating in ABC’s STEP® Health and Safety Management System, which enables top-performing ABC members to achieve incident rates 658% safer than the U.S. Bureau of Labor Statistics’ construction industry average, reducing total recordable incident rates by 85%. Established in 1989, STEP provides contractors and suppliers with a robust, no-cost framework for measuring health and safety data and benchmarking with peers in the industry.

“Transforming the status quo to set the expectation that all incidents are preventable creates a culture where health and safety are elevated to core values, a moral obligation for employers and employees,” said Greg Sizemore, ABC VP of health, safety, environment and workforce development. “Priorities change frequently, but values remain consistent. The tools in ABC’s safety report draw the blueprint for industry leaders and workers to create a culture of health and safety, win and deliver work to communities without incident and protect the construction industry’s most valuable resource: its workforce.”

ABC’s research on more than 1 billion work hours completed by participants in the construction, heavy construction, civil engineering and specialty trades in 2024 identified the following foundations of industry-leading safety best practices:

• New hire safety orientation: Companies that conduct an in-depth indoctrination of new employees into health and safety culture, systems and processes experience Total Recordable Incident Rates, or TRIR, 52% lower than companies that limit their orientations to basic health and safety compliance topics. Additionally, Days Away, Restricted or Transferred, or DART, rates are reduced by 56%.
• Substance abuse prevention programs: Robust substance abuse prevention programs and policies with provisions for drug and alcohol testing, where permitted, lead to a 52% reduction in TRIR and a 55% reduction in DART rates.
• Frequency of toolbox talks: Companies that conduct daily, 15-to-30-minute toolbox talks reduce TRIR rates by 78% and DART rates by 79% compared to companies that hold them monthly.
• Top management engagement: Employer involvement at the highest level of company management in safety best practices produces a 49% reduction in TRIR and a 52% reduction in DART rates.
• Leading indicators: Tracking and reviewing activities carried out to prevent and control injuries, such as safety training, new hire safety orientation and substance abuse prevention, leads to a 59% reduction in TRIR and a 60% reduction in DART rates.

“The 2025 Health and Safety Performance Report and STEP will help any contractor or supplier reinforce their commitment to the well-being of their workforce,” said Sizemore. “If we choose to lead, if we choose to commit and if we choose to transform, together we can ensure every construction worker goes home safer, happier, healthier and more fulfilled every single day.”

For eight years, ABC’s Health and Safety Performance Report has captured the results of ABC STEP member companies performing real work on real projects to identify what comprises an industry-leading health and safety program. ABC member firms participating in STEP measure their safety processes and policies on key components and the criteria for best practices through a detailed questionnaire, with the goal of implementing or enhancing safety programs that reduce jobsite incident rates.

ABC’s 2025 Health and Safety Performance Report is brought to you by DEWALT, a Stanley Black & Decker brand, celebrating 100 years in business by continuing to provide customers with total jobsite and landscaping equipment solutions.

Any company can participate in STEP. Visit abc.org/step to begin or continue your safety journey. (Source)

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Backlog increased on a monthly basis for all nonresidential subsegments in March. Over the past year, however, only the infrastructure category has experienced a meaningful increase in backlog.

ABC’s Construction Confidence Index reading for staffing improved, while the readings for sales and profit margins fell. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

Notably, respondents who completed the survey after the April 2 tariffs announcement were significantly less upbeat—fewer than 26% of those respondents expected their profit margins to expand over the next six months, while more than 40% expected them to contract.

“Backlog increased in March and contractors remained optimistic regarding the future, but this largely reflects contractor activity and sentiment prior to April 2, when the most consequential economic policy in several decades was announced,” said ABC Chief Economist Anirban Basu.

“Approximately 80% of ABC contractors surveyed indicate that suppliers have notified them of tariff-related materials price increases, and nearly 20% of contractors surveyed had projects paused or interrupted because of tariffs during March,” said Basu. “These tariffs have already materially diminished the outlook for construction activity in 2025. Many businesses are poised to delay or even cancel planned capital investments given the current business environment and daily market convulsions. Conditions will likely deteriorate further if elevated tariff rates remain in place for any meaningful length of time.” (Source)

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Both overall and nonresidential construction input prices are 0.8% higher than one year ago. While crude petroleum prices fell considerably in March, that decline was more than offset by rapidly rising natural gas, steel, copper and lumber prices.

“Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7% annualized rate through the first quarter of 2025,” said ABC Chief Economist Anirban Basu. “The emerging effects of tariffs are glaring in the March data release, with iron and steel, steel mill products and copper wire and cable prices all rising more than 5% for the month. While contractors remain busy for the time being, according to ABC’s Construction Backlog Indicator, this pace of input price escalation, coupled with rising uncertainty, will cause projects to be delayed and canceled if they persist for any meaningful length of time.” (Source)

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Spending was up on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending increased 0.4%, while public nonresidential construction spending was up 0.2% in February.

“Nonresidential spending rebounded in February, rising to the highest level on record,” said ABC Chief Economist Anirban Basu. “A surge in highway and street spending accounted for more than 40% of the monthly increase, and public sector nonresidential spending is now up more than 6% on a year-over-year basis. Unfortunately, private sector spending has not kept pace and is up just 2.5% since last February, a rate of increase slower than economywide inflation.

“The mix of high interest rates, tight lending standards and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months,” said Basu. “Despite these ongoing headwinds and the expectation that materials prices will rise as tariffs are implemented, contractors remain optimistic about their prospects over the next six months, according to ABC’s Construction Confidence Index.” (Source)

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An Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index demonstrated a 0.6% increase of input prices in February.

Overall, this is simply a 0.3% input price increase year-over-year. The underlying factors, however, illuminate other issues. Iron and steel saw 3.9% increases; softwood lumber rose 2.8% and steel mill products rose 2.7%.

ABC Chief Economist Anirban Basu said the increases are a result of the tariffs giving domestic producers increased pricing power. He also pointed out nonresidential input prices are down YoY, but he expects that will change soon. ABC’s most recent Construction Confidence Index predicts a 23% decline in profitability over the next half-year.

Blanket tariffs were applied on March 2 for goods shipped from Mexico and China. China is currently facing a 20% tariff on all goods. Other products compliant with the United States-Mexico-Canada Agreement have had tariffs delayed until April 2. A 25% tariff on all steel and aluminum imports, regardless of origin, took effect in March.

Since the Trump Administration enacted its tariffs, China has responded with retaliatory tariffs on U.S. farm products. The European Union is also weighing potential tariffs to be implemented against the U.S. in April.

Skanska USA estimated a 494KSF medical facility that previously cost $375M would now cost an additional $17.4M. A representative of the company stated construction materials account for approximately 45% of project cost. Another representative said 27% of steel used in the U.S. is imported, as is approximately half of aluminum used in the U.S.

Tariffs could impact things such as steel, plumbing materials, elevators, HVAC and electrical products. Cost increases are still looming, even if firms try to domestically source materials. Domestic producers will raise prices because of increased demand.

Uncertainty surrounding tariffs may also cause more damage than the tariffs themselves. Estimates predict wood and structured steel as the materials with the highest cost increase. Wood is expected to increase by 25% to 30%, while steel is to see a 20% to 25% increase. HVAC equipment is expected to increase by 10% to 15%, while plumbing materials are expected to rise by 8% to 10%.

Skanska expects the playing field to drastically change in the coming months. The company also advised all A/E/C parties to work together and promote transparency and flexibility. The company also recommended keeping a tariff impact separate from cost escalation.

Impact on Housing Market

Despite demand heavily outweighing supply in the housing market, homebuilders are getting ready to pull back on production, due, in part, to tariffs.

Data from the U.S. Census Bureau indicated residential construction permits decreased 6.8% YoY in February. Permitting generally correlates to building demand more so than starts. Multifamily permits decreased the most, as Realtor.com reported the sector saw a 4.3% decrease in January and a 15.7% decrease in February. Single-family remains comparatively healthy, only seeing a 0.2% monthly decrease and 3.4% YoY decrease.

Increased construction costs are expected to filter down onto the consumer. Homebuilders have also been focusing on smaller homes to develop more affordable units.

The labor market is also becoming increasingly strained due to the administration’s immigration policy. Currently, roughly a third of the construction workforce is comprised of immigrants. (Source)

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ABC estimates that, in fiscal year 2024, the construction industry’s federal and state GRAPs had about 290,000 apprentice participants and yielded fewer than 40,000 completers.

Six states did not report complete GRAP data to the DOL, so ABC’s figure incorporates rough estimates to account for missing state data in order to paint a more complete picture.

“Unfortunately, America’s government-registered apprenticeship system isn’t keeping up with construction industry demand for skilled craft professionals, despite encouraging progress by many stakeholders to create new programs, attract new apprentices and graduate journeymen and women at the end of a rigorous four-to-five year apprenticeship program,” said Ben Brubeck, ABC VP of regulatory, labor and state affairs. “Despite the growth of nonunion GRAPs, this data is further evidence that an all-of-the-above approach to workforce development––in contrast to the Biden administration’s policy that only advanced government-registered apprenticeship programs––is the best way to address the construction industry’s chronic skilled labor shortage.”

On Jan. 24, ABC projected the construction industry workforce shortage to be 439,000 in 2025.

The DOL’s data presents five-year trend lines indicating there has been stronger proportional growth in the number of nonunion GRAPs, apprentice participants and apprentice completers compared to union-affiliated GRAPs since 2019.

• In FY 2024, 84% of the construction industry’s GRAPs were nonunion providers. The number of nonunion GRAPs has grown by 25% since 2019, compared to a 7% decrease in union-affiliated GRAPs since FY 2019.
• Participants in nonunion GRAPs increased by 43% from FY 2019 to FY 2024, compared to 11% for union programs.
• Completers of nonunion GRAPs increased by 31% from FY 2019 to FY 2024, compared to 11% for union programs.
• However, in FY 2024, 31% of all construction industry GRAP participants were in nonunion programs.

“With construction unions representing a record-low 10.3% of the workforce, the fact that 69% of all apprenticeship programs participants are in union programs illustrates why the union lobby pushes for registered apprenticeship requirements on taxpayer-funded construction projects and advocates for federal grant money for GRAPs as a whole,” said Brubeck. “Workforce development solutions outside of the GRAP paradigm are a threat to union market share.

“ABC champions government-registered apprenticeships as part of a diverse, all-of-the-above solution to workforce development needs to solve the construction industry’s demand for skilled craft professionals, as well as engineers, estimators and project managers,” said Brubeck. “ABC’s 67 chapters are educating craft, safety and management professionals using innovative and flexible learning models like just-in-time task training, competency-based progression and work-based learning, in addition to more than 450 federal and state GRAPs in more than 20 different occupations across America, in order to develop a safe, skilled and productive workforce. ABC members invested an estimated $1.6B in construction industry workforce development to upskill 1.3 million course attendees in 2023, including hundreds of GRAPs administered independently by ABC member companies.”

According to U.S. Bureau of Labor Statistics data, the construction industry had 8.31 million employees as of February 2025, and experienced an unemployment rate between 3.2% and 4.2% during peak construction months in 2024.

According to DOL apprenticeship data, apprentices enrolled in construction industry GRAPs comprise 35.7% of the 679,105 apprentices enrolled in GRAPs across all industries in FY 2024.

Visit abc.org/workforce to learn how ABC is building the people who build America and abc.org/grapmap to find an ABC GRAP. (Source)

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Overall construction input prices are 0.3% higher than one year ago, while nonresidential construction input prices are 0.1% lower. Iron and steel, steel mill product and softwood lumber prices all increased sharply in February.

“Nonresidential input prices increased at a rapid pace in February and have risen at a far-too-hot 9.0% annualized rate through the first two months of 2025,” said ABC Chief Economist Anirban Basu. “Iron and steel prices rose at a particularly fast rate in February, a result of tariffs providing domestic producers with increased pricing power.

“Despite the sizable increase over the past two months, nonresidential input prices are still down on a year-over-year basis,” said Basu. “That will likely change in the coming months as tariffs continue to put upward pressure on prices. While ABC members are, on balance, still optimistic about their profit margins, according to ABC’s Construction Confidence Index, 23% of them expect their profitability to decline over the next six months, the highest share since October 2024.” (Source)

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