The demand for construction workers in the U.S. has softened considerably in recent months, reflecting growing concerns over economic conditions and trade policies. According to data from the Bureau of Labor Statistics released on March 11, the construction industry had 236,000 open, unfilled jobs at the end of January 2025. This marks a significant 42% decrease compared to January 2024.

The monthly report, which tracks jobs that employers are actively hiring for, showed a 15% increase in job openings from December 2024 to January 2025. However, the overall trend suggests that the construction labor market is facing significant challenges, driven by factors like trade uncertainties and shifting economic conditions.

“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, senior research analyst for the Associated General Contractors of America, in a statement to Construction Dive.

Rising Turnover and a Shifting Labor Landscape

Although job openings declined at the end of January, turnover in the construction industry saw a sharp increase. Anirban Basu, chief economist at Associated Builders and Contractors, highlighted that both hires and separations — including 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 stated.

In terms of discharges, the total year-over-year figures remained largely unchanged, with just 1,000 fewer discharges in January 2025 compared to January 2024. However, there was a notable 25% increase in discharges from December 2024 to January 2025. Interestingly, layoffs were down by about 18.5% compared to the previous year, suggesting a decrease in workforce reductions, even amid the downturn in job openings.

“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.

On the flip side, quits — voluntary separations from jobs — spiked by about 21% compared to the previous year, and saw a striking 47% increase from December 2024.

Impact of Trade Policies and Tariffs

Basu noted that concerns around fluctuating trade policies, particularly stemming from President Donald Trump's shifting tariff policies, have likely contributed to the slowdown in construction activity and softened demand for jobs in the sector.

“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.

Despite the drop in job openings, many members of the Associated Builders and Contractors (ABC) remain optimistic and have expressed their intent to continue hiring in the months ahead, with expectations of future growth despite the ongoing challenges.

Looking Ahead: Industry Outlook and Labor Market Forecast

The construction industry is grappling with a complex labor market landscape as it navigates the impacts of trade uncertainties, fluctuating tariffs, and shifting economic conditions. While job openings have decreased, turnover remains high, indicating a level of instability in the workforce.

Even though some factors are contributing to a cautious approach to hiring, many construction firms are planning to continue investing in labor resources to ensure they are well-positioned for future projects. This ongoing adjustment to the labor market, however, underscores the uncertainty in the sector, making it a challenging time for both employers and workers.

The labor market challenges in construction are compounded by the ongoing uncertainty around trade policies. The fluctuating tariffs and shifting international relations have left contractors more hesitant to commit to long-term projects and hire new staff. Moreover, with a large portion of the workforce already leaving their positions voluntarily, the overall labor force is undergoing significant shifts, further complicating the industry's ability to find and retain talent. As the economy continues to adjust to these changing conditions, it remains to be seen how the industry will adapt in the long term.

Originally reported by Zachary Phillips in Construction Dive.