WASHINGTON — Construction hiring activity remained sluggish through the end of the first quarter of 2026 as contractors continued to hold onto existing workers while slowing new hiring amid softer demand across several sectors.
The construction industry recorded 224,000 unfilled positions on the final day of March, according to a Bureau of Labor Statistics report released Tuesday. That figure represented an increase of 23,000 open jobs compared to February, but a decline of 54,000 vacancies from March 2025, marking a 19% year-over-year decrease.
Overall, approximately 2.6% of construction jobs remained open at the end of March, a rate economists noted has remained largely unchanged since the start of the year.
Industry analysts said the stagnant numbers reflect an ongoing slowdown in labor market activity rather than widespread workforce reductions.
“The industry’s labor market continues to be defined by an utter lack of churn,” said Anirban Basu, chief economist for Associated Builders and Contractors. “Construction industry hiring rebounded from February’s historically low level but remains extremely subdued.”
The report showed construction worker quits held relatively steady in March at 139,000, about 5,000 higher than the previous month. At the same time, layoffs and discharges fell slightly to 145,000 workers, down roughly 3% from February levels.
Economists said the relatively low layoff activity suggests contractors are choosing to retain skilled labor despite moderating project demand and economic uncertainty.
“While contractors remain confident that their staffing levels will improve this year, according to ABC’s Construction Confidence Index, these stagnant labor market dynamics suggest that the industry remains in a holding pattern, one it will not exit until economic uncertainty lessens,” Basu said.
Macrina Wilkins, director of market insights for the Associated General Contractors of America, said contractors appear focused on maintaining existing crews rather than significantly expanding payrolls.
“The decline in openings is the clearest signal that demand for additional workers has softened. Hiring is holding steady, but there is no sign of acceleration,” Wilkins said. “Taken together, that suggests firms are maintaining their current workforce rather than expanding headcount, consistent with slower growth in construction activity.”
Wilkins noted that March 2024 marked the last time job openings and layoffs intersected in construction labor data. Since then, job openings have steadily declined while layoffs have remained relatively low.
Industry economists also pointed to broader geopolitical and economic pressures contributing to contractor caution.
The March labor report was the first released since the start of the Iran War, which economists say could further impact construction costs and project planning through rising energy prices and market uncertainty.
“That would raise project costs and could delay or reprioritize projects at the margin,” Wilkins said. “In turn, that would reinforce the current pattern of cautious hiring rather than lead to an immediate increase in layoffs, unless those pressures become more prolonged or severe.”
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Contractors across the country continue to face a complicated labor environment balancing slower project growth, elevated material costs and uncertainty surrounding future economic conditions. While demand remains strong in select sectors such as infrastructure and data centers, many commercial and private developments have slowed compared to recent years.
Despite weaker hiring activity, industry leaders say contractors remain reluctant to reduce staffing significantly after years of labor shortages made recruiting skilled workers difficult and costly.
Analysts expect hiring patterns to remain cautious through the remainder of 2026 unless economic conditions stabilize and project demand strengthens across key construction markets.
Originally reported by Zachary Phillips, Senior Editor in Construction Dive.
