The construction industry faces a critical workforce crisis that could derail the anticipated growth for 2026, according to new data released this week by the Associated General Contractors of America and the national Center for Construction Education and Research. The survey reveals alarming statistics about hiring challenges and project delays affecting construction companies across all sectors and regions.
88% of construction firms hiring craft workers report unfilled job openings, with similar percentages saying positions are harder to fill than a year ago. 80% of firms employing salaried staff face the same hiring challenges. Most troubling, 45% of construction companies report project delays directly attributable to workforce shortages, according to data released by DPR Construction on December 9, 2025.
These statistics paint a stark picture of an industry trying to move forward amid severe labor constraints. As construction projects advance in multiple sectors—from advanced technology facilities to healthcare and higher education—contractors are discovering that the availability of skilled workers remains the limiting factor preventing successful project delivery.
The workforce shortage affecting construction is multifaceted and reflects long-term demographic and policy trends:
A substantial cohort of experienced construction professionals is reaching retirement age, and younger workers are not entering the trades in sufficient numbers to replace departing talent. This creates a particular challenge because skilled construction work requires significant experience—knowledge that retires with the departing workforce.
Recent immigration enforcement actions have directly impacted construction labor availability. Nearly 30% of surveyed construction firms cited immigration enforcement actions as contributing to labor shortages, either directly or indirectly. Immigration has historically been an important source of construction labor, and recent policy changes have reduced this important talent pipeline.
This represents a significant shift in labor dynamics, as many construction segments have relied on immigrant workers to fill critical skilled trade positions. The combination of reduced immigration and aging demographics creates a compounding effect on labor availability.
Young people entering the workforce have alternative career pathways that may offer perceived advantages over construction trades, including office-based careers, technology roles, and other professions. Additionally, insufficient investment in workforce training and development programs means fewer workers are credentialed and ready to enter construction positions.
The trade labor pipeline requires sustained investment in apprenticeships, technical training, and career pathway programs—investments that have not kept pace with industry demand.
The workforce shortage is no longer an abstract industry challenge—it is directly impacting project schedules and delivery. With 45% of firms reporting project delays due to labor shortage, the problem is widespread across the industry and affecting client satisfaction, project economics, and construction industry profitability.
When projects experience delays due to insufficient workers, schedule extensions drive up costs through extended overhead, equipment rental periods, supervision time, and general conditions. What might be manageable as a labor shortage problem becomes an economic problem as projects slip their schedules.
When construction firms cannot secure sufficient workforce to pursue all available work, they must prioritize projects. This reduces the number of projects a company can undertake, limiting their growth and their ability to serve clients. In competitive markets, this provides advantages to firms that can somehow address labor constraints more effectively.
Scarce workers command higher wages as firms compete to fill positions. This wage pressure increases construction costs for project owners and reduces margins for construction companies. The labor shortage thus creates an economic squeeze on both sides of the construction equation.
Forward-thinking construction companies are responding to labor constraints through strategic approaches that aim to extend productivity of the existing workforce.
Offsite prefabrication and modular construction methods reduce on-site labor requirements while improving quality control and safety. By moving construction work to controlled factory environments, firms can increase productivity, reduce exposure to weather delays, and use labor more efficiently. McKinsey research shows modular construction can shorten schedules by 20-50%, critical for compressed project timelines.
Some large contractors are investing in their own labor forces through self-perform models, where they directly employ key trades rather than relying solely on subcontractors. This approach provides more control over workforce availability and allows firms to invest in worker training and retention.
Progressive construction firms are deploying new technologies—from drones and robotics to artificial intelligence-driven project management and data analytics—to increase worker productivity and project efficiency. Technology can help extend the capacity of existing workers and reduce total project labor requirements.
Lean principles focus on eliminating waste, improving workflow, and maximizing value delivery. Applying Lean techniques can increase labor productivity without increasing worker headcount, allowing firms to accomplish more with the workers they have available.
The labor shortage affects all construction sectors, but some face particular challenges based on project demand and geographic concentration:
The labor shortage is unlikely to ease rapidly in 2026. The demographic trends driving labor shortages—retirement of aging workers, low birth rates reducing the future labor pool, and tight immigration policies—are structural problems that take years to address.
Construction demand is expected to remain strong in 2026 across multiple sectors, driven by technology investment, healthcare facility needs, and public infrastructure spending. This strong demand colliding with limited labor supply suggests continued workforce challenges throughout 2026.
Some relief may come from:
However, these changes take time to implement and scale, so 2026 will likely remain a challenging year for construction labor availability.
Roel Aguilar, DPR Construction's national preconstruction leader, emphasizes that "it will take at least a generation to fully address the labor shortage." While that long-term reality sinks in, contractors should consider:
Source: DPR Construction Press Release, "Labor Shortage Looms as Construction Rebounds," December 9, 2025; Associated General Contractors of America and National Center for Construction Education and Research 2025 Workforce Survey; Q4 2025 Market Conditions Report.
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