The U.S. Construction Industry Faces New Challenges and Opportunities Amid High Demand

United States, August 14, 2025

News Summary

The U.S. construction industry confronts significant challenges as it grapples with rising costs, labor shortages, and economic uncertainty while facing strong demand for housing and infrastructure. Despite a workforce of over 8 million and a projected growth rate of 5.6% in employment, structural issues hinder the industry’s ability to meet demands. The sector experiences remarkable wage growth, particularly in specialized positions, but the lack of support systems like childcare remains a barrier to full participation in the economy. The industry must adapt to these complexities to foster sustainable growth.

U.S. Construction Sector Faces Tight Labor, Rising Costs and Strong Demand in 2025

Key point: The construction industry is starting 2025 with high demand for new housing and infrastructure but facing clear limits from rising costs and a tight labor market. Overall spending has cooled recently as higher interest rates and economic worries slow some projects, while employment and wages continue to rise.

Big picture — demand, spending and uncertainty

Demand for housing and infrastructure remains strong because of ongoing housing shortages and new federal investment. At the same time, rising material and labor costs make many projects more expensive. That mix has created uncertainty: some builders press ahead, while others hold plans or slow work because financing and costs are harder to predict.

Employment levels and long-term context

Construction employment topped 8 million workers by the end of 2024, accounting for about 6.1% of private-sector jobs. The sector rebounded after the Great Recession but still has not returned to its pre-2008 share of total private employment. Employment once fell as low as 4.8% of private-sector jobs in early 2011.

Who works in construction

The workforce is made up of many different jobs. The largest groups include laborers (11.0%), first-line supervisors (7.7%), and carpenters (7.3%). Electricians make up about 7.2%, plumbers 4.6%, and HVAC technicians 3.7%. Masons, painters and roofers are smaller shares but remain essential craft roles.

Management and project roles

Construction managers and general operations managers each represent about 3.4% of construction jobs, while project managers are roughly 2.7%. Specialized craft and supervisory roles remain in high demand, and some of those positions command higher pay due to shortages.

Regional patterns — Mountain West stands out

States in the Mountain West have the highest share of jobs tied to construction. Wyoming leads with about 11.0% of jobs in construction, followed by Utah at 9.5% and Idaho at 9.3%. All eight Mountain West states rank among the top 10 for construction employment share. In contrast, many states in the Northeast and parts of the Midwest show the lowest shares, reflecting slower building growth or more mature local economies.

Wages and recent growth

Construction workers earn a higher median wage than the overall workforce. The national median for full- and part-time construction workers is about $58,360 per year — roughly 18% higher than the median across all occupations. Wages in construction have jumped about 15.4% over the past two years, compared with 6.9% growth overall. After adjusting for cost of living, a few states in the Midwest rank among the best paying for construction work, while several Southern states and some cities in Florida and Texas are at the lower end.

Outlook and job growth

Employment in construction is projected to grow about 5.6% from 2023 to 2033, faster than the average for all occupations. That growth will reflect continuing need for housing, public works and maintenance, but labor shortages and cost pressures will shape how quickly and where projects move forward.

State spotlight: workforce strain and barriers

Some states report deep hiring needs and role shortages. One state labor agency estimates a need for about 1,000 new construction workers each year for the coming eight years. A high share of contractors in that state have open positions, especially for craft roles such as equipment operators and mechanics. Lack of childcare is also a barrier in some areas, keeping tens of thousands of workers from fully participating in the labor force even as the overall state labor pool grows.

Immediate impacts

Tight labor and higher pay push builders to seek productivity gains and put more focus on recruiting and training. Elevated interest rates have cooled some spending, slowing starts for new projects and shifting timelines. Still, strong long-term demand — especially for housing and public infrastructure — supports a generally positive hiring outlook for the next decade.

What this means for workers and employers

• Workers: Many craft and trade jobs are in demand and offer higher-than-average pay, particularly in certain states and specialized roles.
• Employers: Finding and keeping skilled workers is a top challenge. Employers may need to invest more in training, higher wages, and benefits to attract talent.
• Policymakers: Housing shortages, labor development, and supporting services such as childcare can affect how many people can work and where projects are built.

FAQ

Key features at a glance

Feature	Figure or trend
Construction employment (end of 2024)	Over 8 million (6.1% of private-sector jobs)
Median annual wage	$58,360
Wage growth (past two years)	15.4%
Projected job growth (2023–2033)	5.6%
Top states by job share	Wyoming, Utah, Idaho
Main challenges	Labor shortages, rising costs, slower spending

Deeper Dive: News & Info About This Topic

Additional Resources

• KULR8: Construction Industry Employs 8.7% of Montana Workers
• Montana Right Now: Montana Construction Workers Earn 12th Most in U.S.
• Business Insider: Montana Contractors Face Labor Shortage
• KULR8: Best Paying Construction Professions in Montana
• Wikipedia: Construction Industry