Construction Hiring Slows at Start of 2026, Despite Optimistic Outlook

The U.S. Construction industry began 2026 with a slowdown in hiring, reporting 231,000 job openings at the end of January. This figure represents a decrease of 14,000 positions from December and 1,000 fewer openings compared to January 2025, according to an analysis by Associated Builders and Contractors (ABC) of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS). Despite this, contractor confidence remains relatively stable.

Hiring Rate Remains Subdued

Although construction hiring did accelerate in January, reaching its fastest pace since the first half of 2025, the rate remains historically low. “While construction hiring accelerated in January, rising to the fastest rate since the first half of 2025, that’s unfortunately not saying much,” stated Anirban Basu, chief economist for Associated Builders and Contractors in a press release. “The industry’s hiring rate is still slower than at any point between the start of the data series in 2001 and the end of 2019.”

Confidence vs. Action

Contractors, as measured by ABC’s Construction Confidence Index, continue to express optimism about staffing levels over the next six months. However, this confidence hasn’t translated into significant hiring increases. This disconnect suggests firms are cautiously optimistic, potentially anticipating economic uncertainties.

Broader Economic Factors at Play

The slowdown in hiring coincides with broader economic trends impacting the construction industry. According to a December 10, 2025, webinar hosted by Associated Builders and Contractors, “stubborn inflation [and] stubbornly high interest rates … will continue to suppress growth in construction spending.” . High inflation and interest rates are acting as a “drag on construction activity,” Basu explained.

Shifting Concerns in the Industry

Interestingly, a recent survey revealed that insufficient demand for construction services is now the leading challenge for firms, surpassing the long-standing concern of a lack of skilled workers. This marks a shift in priorities within the industry.

Material Costs and Data Center Construction

Rising material prices, particularly for fabricated structural metal products (up 63.1% since February 2020), steel mill products, and nonferrous wire and cable, are contributing to increased costs. These price increases are especially concerning for the data center construction sector, which is currently a strong area of growth, and could potentially impact spending in 2027 if costs become prohibitive.

January Hiring Numbers

Despite the overall slowdown in job openings, construction employers did hire 349,000 new workers in January, representing 4.2% of all positions in the industry. However, economists caution that this growth rate remains slower than pre-2020 levels.

Worker Turnover Remains Stable

The rate of construction workers quitting or being laid off remained steady in January, at 1.7% and 2% respectively.

The construction industry faces a complex landscape at the start of 2026, balancing cautious optimism with economic headwinds and shifting priorities. While hiring has accelerated slightly, the overall rate remains subdued, and firms are navigating rising material costs and evolving demand.