Despite the state's booming construction market in recent years, California faced the largest decline in construction jobs in the nation last year, according to a new report from the Associated General Contractors of America (AGC). From January 2024 to January 2025, California lost 27,600 construction jobs, accounting for a 3% decrease in its construction workforce.

New York experienced the second-largest loss, shedding 11,700 jobs, while Arizona and Massachusetts lost 7,700 and 6,700 jobs, respectively.

“While two-thirds of the states added construction jobs over the past year, gains were much less widespread recently,” said Ken Simonson, AGC's chief economist. “Some of the job losses in January may be due to bad weather, but many owners have paused projects in the face of rising uncertainty about funding and tariffs.”

The AGC also pointed to factors such as weather disruptions and economic uncertainty, which have hampered construction growth. Specifically, the report highlights that tariffs on construction materials have contributed to project delays and cost increases.

“We’ve seen a lot of projects pause due to rising uncertainty about funding and tariffs,” Simonson explained. “The threat of these tariffs is pushing material prices up, making previously planned developments and infrastructure projects less feasible.”

AGC officials have urged the federal government to address the ongoing tariff disputes, which they argue are having a significant impact on the construction sector. “The more expensive construction becomes, the less likely manufacturers will be able to afford to build the domestic factories the administration is trying to stimulate,” noted Jeffrey Shoaf, AGC’s chief executive officer. “Exempting construction materials from additional tariffs will make it easier for manufacturers to boost domestic production by making it easier to build factories.”

Further Context and Outlook

‍While the construction sector in California took a hit in 2024, there may be brighter prospects ahead, especially with recovery efforts like the Eaton Fire recovery expected to impact the 2025 outlook. As the sector recovers from the initial job losses, many experts remain hopeful that the situation will stabilize with the resolution of tariffs and other economic factors.

Originally reported by Pasadena Now.