Construction’s new worker demand drops to 350,000 in 2026: report

Core Insights - The construction industry is facing a shrinking labor gap, with modest growth forecasts for construction spending in 2026 and 2027, although demand may exceed these forecasts if project financing costs decline or policy uncertainty resolves favorably [3][4] - Nonresidential specialty trade contractors have added 95,000 jobs since August 2024, indicating strong hiring in certain sectors of nonresidential construction [4] - The majority of new worker demand in 2026 will be due to retirements rather than increased demand for construction services, despite a boom in artificial intelligence infrastructure [5] Labor Market Dynamics - The construction industry has an aging workforce, with the median worker closer to retirement compared to the overall U.S. labor force, but there is potential for Gen Z to join construction occupations [6] - Immigration policy is a significant factor affecting the labor force, with a notable decline in the flow of undocumented workers and an increase in voluntary deportations [7] - The construction industry needs to attract an estimated 349,000 net new workers in 2026, rising to 456,000 in 2027, with a previous prediction of 439,000 new workers needed in 2025 [7]