Job openings data suggest that contractors remain cautious about new hires, even as unfilled positions decline compared to last year.

The construction industry had 264,000 unfilled job openings at the end of February, marking a 9% increase from January but a sharp 38.5% drop compared to the same time in 2024, according to data released Tuesday by the Bureau of Labor Statistics (BLS).

The number of quits rose by 17,000, marking the second consecutive monthly increase, while layoffs remained relatively stable. Despite economic uncertainty, layoffs in construction actually declined year over year, suggesting firms are hesitant to let go of skilled workers.

At the end of February, 3.1% of all construction jobs remained vacant, an indicator of both lingering labor shortages and a shift in hiring dynamics.

Labor Market Shifts Amid Policy Changes

With a new administration in place, shifts in federal economic and trade policies are influencing contractors' hiring decisions. President Donald Trump’s tariff policies have added a layer of uncertainty, making it harder for firms to predict long-term labor needs.

Macrina Wilkins, senior research analyst for the Associated General Contractors of America, pointed out that the decline in layoffs signals a change in workforce management strategies.

“Contractors are clearly scaling back on hiring and new job postings—likely reflecting fewer upcoming projects or increased caution about the economic outlook,” Wilkins said. “Yet the record-low layoff rate suggests that firms are holding onto their current workforce, signaling they expect business to rebound or pick up later in the year.”

Anirban Basu, chief economist for the Associated Builders and Contractors, echoed this perspective, emphasizing the gap between layoffs and voluntary resignations.

“Still, there are signs that construction workers retain outsized leverage compared to their employers,” Basu said in a release. “Contractors remain reluctant to lay off workers, while construction workers quit their jobs at the fastest pace since last May.”

Despite the current slowdown in hiring, Basu believes the overall outlook for the industry remains positive. Data from ABC members indicate that staffing levels will likely increase in the second half of 2025, as demand for projects picks up.

What This Means for Contractors and Workers

The construction industry is navigating a complex employment landscape. While contractors appear hesitant to expand their workforce, they are also making efforts to retain skilled labor, anticipating future growth. The rise in voluntary quits suggests that workers remain confident in their ability to find new opportunities, even amid economic uncertainty.

As the year progresses, all eyes will be on infrastructure investments, government policies, and market demand to see whether hiring rebounds or if firms continue their cautious approach.

Originally reported by Zachary Phillips in Construction Dive.