New Jersey Posts Second-Highest U.S. Construction Unemployment Rate

New Jersey’s construction industry is feeling the strain of economic and regulatory pressures, recording the nation’s second-highest construction unemployment rate at 8.5% in June, according to new data from the U.S. Bureau of Labor Statistics analyzed by the Associated Builders and Contractors of New Jersey (ABC-NJ).

Only Rhode Island fared worse, with an 8.9% rate, while New Jersey's figure significantly exceeded the national average of 3.4%. The state's construction unemployment rate also marked a noticeable uptick from June 2024, reflecting a regional slowdown amid broader economic headwinds.

The state’s overall job market showed signs of weakness as well. The Bureau of Labor Statistics reported that total nonfarm employment in New Jersey dropped by 9,700 jobs in June, pushing the seasonally adjusted employment level to 4,382,600. The state’s unemployment rate inched up to 4.9%.

Among the sectors experiencing job losses, construction stood out, with 900 positions lost in June alone.

“New Jersey’s construction sector is facing headwinds, from inflationary costs to continued regulatory and permitting delays that are making it harder to get projects off the ground,” said Samantha Roman, president and CEO of ABC-NJ.

Roman added that the state’s builders are contending with rising labor expenses, ongoing inflation, and a challenging interest rate environment. “Higher labor costs, persistent interest rates, and rising uncertainty around building material tariffs are contributing to a cautious hiring climate in the state,” she said.

While construction employment grew year-over-year nationwide — with 114,000 more jobs than in June 2024 — New Jersey lagged behind the national trend. In fact, it was one of 28 states where the construction jobless rate worsened compared to the previous year.

Across the country, the construction industry remains relatively resilient, with seasonally adjusted employment reaching 8.3 million jobs — 9.4% higher than pre-pandemic levels. However, New Jersey has yet to fully rebound.

“Although most builders are reluctant to lay off skilled workers, many in New Jersey are scaling back hiring or delaying new projects amid economic uncertainty,” Roman said.

In contrast, the top-performing states for construction employment in June were South Dakota (0.8%), North Dakota (1.2%), and New Hampshire (1.3%).

Despite the bleak figures, industry analysts see a path forward. Targeted investment in infrastructure and housing, along with clearer and more predictable permitting processes, could help stabilize the state's construction labor market.

Roman noted that the state still holds potential for a turnaround. “We remain cautiously optimistic that strategic investments and smarter regulation will help the industry regain its footing,” she said.

Originally reported by John Harrington in Roi.