The demand for construction workers in the U.S. has softened significantly in recent months, influenced by a combination of factors, including President Donald Trump's shifting tariff policies. According to data from the Bureau of Labor Statistics, released on March 11, there were 236,000 open, unfilled construction jobs at the end of January 2025. This represents a dramatic 42% drop compared to January 2024.

The monthly report, which tracks jobs employers are actively hiring for, showed that while job openings rose by 15% from December 2024 to January 2025, the overall trend in recent months has pointed to a general decline in available construction jobs, signaling growing uncertainty in the industry.

“The continued decline in job openings suggests that while demand for workers remains, contractors are becoming more cautious about hiring amid uncertainty about tariffs, project pipelines and future economic conditions,” said Macrina Wilkins, a senior research analyst with the Associated General Contractors of America.

Labor Churn and Increased Turnover Highlighted

Despite the drop in job openings, the turnover in the construction industry saw a significant uptick in January. Anirban Basu, chief economist at Associated Builders and Contractors, noted that both hires and separations, which include layoffs, discharges, and quits, accelerated to the fastest rate since the first half of 2024.

“Both hires and separations — including layoffs, discharges and quits — accelerated to the fastest rate since the first half of 2024,” Basu said.

Though the total number of discharges year-over-year was almost the same, with just 1,000 fewer in January 2025 compared to the same month in 2024, discharges did rise by 25% when comparing December 2024 to January 2025.

Interestingly, layoffs dropped by approximately 18.5% compared to the previous year, indicating that while overall job openings decreased, there was less of a push to eliminate existing workers.

“Although layoffs have also declined, the sharp drop in job openings indicates that firms are hesitant to take on new projects or expand their workforce at this time as contractors navigate an evolving and uncertain economic landscape,” Wilkins added.

The Role of Volatile Trade Policies and Economic Conditions

Basu also addressed the broader impact of trade policy uncertainties, noting that the fluctuating tariffs implemented during President Trump's administration have contributed to slowing construction activity. This slowdown, in turn, has led to a softer demand for construction jobs.

“Concerns over volatile trade policy stemming from President Donald Trump’s back-and-forth tariff policies may have slowed construction and therefore softened demand for jobs,” Basu said.

Nevertheless, despite the current decrease in job openings, members of the Associated Builders and Contractors (ABC) remain optimistic about the future. Many indicated their intention to continue hiring more workers in the coming months as the industry navigates these challenges.

Looking Ahead: Contractors Cautious but Optimistic

The general sense within the industry is one of caution, as firms closely monitor the evolving economic landscape. While the outlook remains uncertain, contractors seem poised to adjust hiring practices to meet demand when the conditions stabilize. This cautious optimism reflects a delicate balance between managing short-term challenges and planning for potential growth as economic conditions evolve.

In conclusion, the drop in construction job openings and the increase in turnover highlight the current state of uncertainty within the industry, largely driven by fluctuating trade policies and broader economic shifts. However, the industry remains resilient, with plans for hiring continuing in the long-term, despite the short-term challenges.

The construction labor market has faced an ongoing struggle with worker shortages, which had been a concern even before the recent slowdown in job openings. Despite these challenges, ongoing projects in areas like infrastructure and residential construction continue to drive demand for skilled labor. However, the economic instability triggered by trade disputes and fluctuating government policies has made contractors wary of hiring, even if they are still actively seeking workers for essential projects.

The future of the construction industry, therefore, seems to hinge on how quickly economic conditions stabilize, and how the industry adapts to the ever-changing political and economic environment.

Originally reported by Zachary Phillips in Construction Dive.