Recent U.S. job market indicators have shown some concerning trends, yet the construction sector is experiencing heightened demand for labor.
The Associated Builders and Contractors trade group has projected that the industry will require 456,000 new workers in 2027, a 30.7% increase from the 349,000 needed this year.
“If this need is not met, labor shortages will intensify, particularly in specific occupations and areas, driving labor costs even higher,” cautioned ABC Chief Economist Anirban Basu in a statement.
He added that, despite the boom in AI infrastructure, most of this year’s demand for new workers stems from retirements rather than an increase in construction service needs. This year’s projection also represents a decrease from prior years.
Nevertheless, ABC stated that overall construction spending is set to end a downturn and resume growth for the first time in several years. Its model indicates that every extra $1 billion in construction spending generates demand for 3,450 new positions.
Basu noted that if spending forecasts turn out to be too cautious, the industry’s worker requirements will be even greater. Notably, shortly after the ABC report, quarterly updates from AI hyperscalers amazed Wall Street with staggering capital expenditure forecasts for 2026.
Major technology firms alone are anticipated to spend a combined $700 billion this year, rising from $400 billion the previous year. A significant portion of this investment is directed toward AI, encompassing chips and data centers.
While tech giants fuel construction demand, President Donald Trump’s immigration restrictions have significantly reduced access to a traditional source of workers for the industry.
This has aggravated a labor shortage and led to project delays, according to the Associated General Contractors of America, which reported last year that a large majority of firms seeking to hire faced difficulties finding qualified applicants.
Meanwhile, AI data center projects tend to be more profitable for construction companies, which worsens labor shortages for other projects such as apartments, factories, and healthcare facilities, Basu pointed out.
ABC’s calculations show that spending on new data center construction in the first ten months of 2025 soared 32% compared to the same period a year ago. Furthermore, nonresidential specialty trade contractors have created 95,000 jobs since August 2024.
The skilled trades leading the employment surge
A separate analysis last month referenced Labor Department projections indicating that employment in skilled trades will grow by an average of 5.3% from 2024 to 2034, compared to an overall rate of 3.1%. Growth in specific trades will be more rapid, with electricians rising 9.5% and HVAC technicians increasing 8.1%.
The industry’s demographics present a further challenge, with almost 20% of the construction workforce aged over 55. The years of training required for apprenticeships and licensing in certain trades slows the pace of replacing retirees.
“This indicates that the critical period for recruiting and training the future skilled workforce is currently—before that expertise retires,” an expert stated. “The added complexity of AI-related infrastructure increases the value of highly skilled and experienced instructors; the workforce’s older age profile makes the timing issue even more pressing.”
These projections stand in contrast to recent setbacks in the wider labor market. The proportion of consumers who believe jobs are difficult to find is at a five-year peak. Announced layoffs in January reached their highest level since 2009, while job openings in December fell to a five-year low.
However, Ford CEO Jim Farley has been highlighting a massive worker shortfall for what he terms the industrial rebuild. Last year, he estimated a deficit of 600,000 factory workers and close to half a million in construction.
Farley also cautioned that the country lacks sufficient skilled labor to construct and maintain data centers and manufacturing plants.
“I believe the intention exists, but there is no workforce to support the ambition,” he remarked in September. “How can we reshore all this production if we lack the people to work there?”