2026 Construction Workforce Outlook: Labor Trends Shaping the Year Ahead

November 3, 2025

2026 Construction Workforce Outlook: Labor Trends Shaping the Year Ahead

 

The construction industry is experiencing steady growth in the last quarter of 2025, while anticipating more opportunities in 2026. High demand for construction services and low interest rates on construction materials are among the reasons the industry experts anticipate more growth.

While this upward trajectory presents remarkable opportunities for the players in the industry, labor shortage combined with the high cost of skilled workers is a problem hiring firms need to address. Any contractor hoping to benefit from the opportunity should therefore understand the industry labor trends for proper contractor-workforce planning. 

Projected Workforce Demand in 2026

In 2026, construction project expenditure is expected to grow on both residential and non-residential infrastructure following lower interest rates. About 500,000 new workers are required to meet this demand.

Other factors contributing to increased demand for labor include:

  • Investment surge on infrastructure. The industry anticipates about 4.2% increase on infrastructure spending in 2026. 
  • Advancement in technology. Homeowners and businesses are adopting new technology such as renewable energy gadgets, new appliances, and home security devices. Installation of these systems requires skilled labor. 
  • Construction workers exiting the industry from retirement. Many of the industry’s workers are set to retire from the industry by 2030, causing a massive labor shortage.

Current Labor Shortages and Hiring Challenges 

The construction industry requires 439,000 additional workers in 2026, according to Associated Builders and Contractors. However, hiring such a high number of workers is challenging.

As firms struggle to hire reliable employees, projects take longer to complete. This in turn increases the cost of completing a single project because hiring an expert at certain stages of the construction process is needed.

Labor availability in different regions also differs. Construction workers in major towns are scarce owing to many mushrooming projects. This translates to high labor costs and minimal returns to the contractors. Secondary markets and rural areas have fewer projects. Labor costs in these areas are relatively less expensive.

Technology is transforming how construction sites operate, from digital blueprints to automated equipment. But it’s also creating new opportunities for workers who are ready to learn. Even small steps, like getting familiar with digital tools or learning to work alongside new machines, can make a big difference in job security and pay.

At the same time, demand is growing for workers who understand sustainable building practices. As more projects aim to meet “green” standards, crews that can handle recycling, energy-efficient materials, or environmental clean-up are in high demand.

And there’s another shift happening on job sites: a stronger focus on worker wellbeing. Employers are recognizing that safety and mental health go hand-in-hand. Offering fair schedules, reliable pay, and supportive environments helps companies attract and keep dependable workers. People who take pride in doing a job right.

Strategies for Contractors to Address Workforce Challenges

Skilled trade shortage is a common challenge among contractors. Construction companies and contractors can overcome these challenges by leveraging the following construction worker retention strategies:

Pay Fairly and Respect Their Time

Competitive pay, steady hours, and reliable schedules go a long way. Even small perks, like same-day pay options or a quick bonus for perfect attendance, show your workers that you value their effort.

Help Workers Grow

Training doesn’t have to mean expensive classes. Simple on-the-job coaching, mentorship from experienced leads, or a chance to move into higher-paying roles can keep workers motivated to stay and improve.

Create a Positive Jobsite Culture

A “thank you” and a safe, respectful work environment matter more than most people think. When workers feel appreciated and part of the team, they show up, work harder, and take pride in every task, no matter how big or small.

Work With an Expert Staffing Partner 

Many industry forecasts predict that 2026 will be a strong year for construction. With new infrastructure projects breaking ground nationwide, the demand for reliable labor is only going to rise.

Contractors who plan ahead by building strong crews, treating workers well, and partnering with trusted staffing providers will be ready to take advantage of every opportunity.

When you need dependable, hard-working people for any phase of your project, HireQuest Direct is ready to help. We make it easy to find and keep the right crew, right when you need them.