The workforce math isn’t getting easier. ABC’s 2026 forecast pegs net new hiring demand at 349,000 workers, and that’s on top of replacing roughly 500,000 expected retirements over the next three years. AGC’s latest survey, with NCCER, found 28% of contractors reporting workforce disruption tied to ICE activity in the past six months. Roughly half of all firms now say project delays are being driven by labor.
The compounding effect is what matters. Immigrant labor accounts for 34% of construction’s total workforce, but the share rises to over 60% in drywall, roofing, plastering, and several concrete-finishing trades. Pull 10% out of those specific labor pools and the bid pipeline reprices.
What the wage data says
Specialty trades are running hottest. AGC’s data shows wage gains of 9% to 11% in metro markets with active enforcement, well above the 4–6% national average. Seven of eight firms raised base pay at least as much as they did the prior year. Eight in ten increased benefits.
That’s not a wage-led inflation story. It’s a sorting story. Crews with documented status are commanding premiums. Firms with stronger pipelines for apprentices and direct labor — typically large national GCs and the unionized sector — are gaining a relative cost advantage versus regional firms reliant on sub-of-sub labor.
What it looks like on the schedule
Forty-five percent of contractors report project delays from worker shortages, their own or subs. The most common pattern in survey comments: a sub crew shows up smaller than committed on Monday, the GC’s superintendent has to rebalance, and trailing trades push by a few days each cycle. Two or three of those in a row and a six-month schedule absorbs 10–14 days of slack.
What firms are doing
The interventions are familiar but the dollars behind them are larger:
- In-house training and apprenticeships: 60% of firms increased training spend
- Direct hiring from high schools and community colleges: AGC reported 38% of firms now run year-round outreach
- Sign-on bonuses for skilled trades: routine in concrete, electrical, and mechanical
- Schedule float: more contractors building 10–15% labor contingency into bids
A few firms are quietly experimenting with offshore prefab and modular assembly to take crew-hour count out of the equation entirely. Mass timber residential projects have been an early proving ground for that.
What to watch
The Department of Labor’s reauthorization of the H-2B cap is the near-term policy lever. Industry groups have asked Congress repeatedly to raise it. Until that happens, the wage curve in tight trades looks more likely to keep moving than not.
Source: AGC of America, “Construction Workforce Shortages Are Leading Cause Of Project Delays”