The U.S. construction industry is bracing for a major labor crunch as demand for new projects—fueled in part by an explosion in artificial intelligence investment—continues to rise.
According to a new report from the Associated Builders and Contractors (ABC), the sector will need to add 456,000 new workers in 2027, a sharp 30.7% increase from the 349,000 needed this year.
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Industry economists warn that failing to meet that demand will have costly consequences.
“Failing to do so will worsen labor shortages, especially in certain occupations and regions, placing further upward pressure on labor costs,” ABC Chief Economist Anirban Basu said.
Despite headlines about the AI construction boom, Basu noted that most of the immediate need is not coming from new projects—but from demographics.
He said that “the majority of new-worker demand this year is due to retirements instead of increased need for construction services.”
While retirements dominate short-term projections, the rapid buildout of AI infrastructure is becoming a powerful long-term driver.
ABC estimates that every additional $1 billion in construction spending creates demand for 3,450 new jobs. If forecasts prove too conservative, workforce needs could climb even higher.
That scenario looks increasingly likely. In recent earnings reports, major technology firms revealed staggering capital plans:
ABC calculated that outlays for new data center construction during the first 10 months of 2025 jumped 32% compared with a year earlier. Since August 2024, nonresidential specialty trade contractors have added 95,000 jobs, underscoring how quickly the segment is expanding.
Basu told the Washington Post that AI projects are often more profitable for builders, which can pull crews away from other priorities such as housing, healthcare facilities and manufacturing plants.
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At the same time demand is rising, traditional labor sources are shrinking. Construction has long relied on immigrant workers, but recent federal immigration crackdowns have disrupted that pipeline.
The Associated General Contractors of America reported last year that 92% of construction firms trying to hire struggled to find qualified workers, leading to project delays and higher bids.
The combination of AI-driven opportunity and restricted labor supply is creating one of the tightest markets the industry has seen in decades.
Long-term employment data suggests skilled trades will benefit most from the shift.
A BlackRock analysis of Labor Department forecasts projects that skilled-trade employment will grow 5.3% from 2024 to 2034, well above the 3.1% rate for overall employment.
Certain occupations are expected to surge even faster:
Industry leaders say those figures highlight the urgent need for expanded apprenticeship programs, vocational training and recruitment of underrepresented workers.
After several years of sluggish activity, ABC believes overall construction spending is poised to return to growth, with AI facilities, power generation and manufacturing leading the rebound.
But without a significant expansion of the workforce, economists warn that the boom could translate into higher costs, longer timelines and stalled projects—even as technology giants pour unprecedented sums into the built environment.
For now, the message from contractors is clear: the buildings of the AI era will require human hands, and a lot more of them.
Originally reported by Jason Ma in Yahoo Finance.
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