Construction employment rose slightly by 2,000 jobs in July 2025, but construction spending dropped 0.4% in June as economic uncertainty led owners to delay or cancel projects.
Slowing Growth in Construction Employment Amid Spending Decline
Construction employment inched up by just 2,000 jobs in July 2025, bringing total industry employment to 8.31 million, according to new government data analyzed by the Associated General Contractors of America (AGC). While this slight increase might appear promising, it signals a sharp slowdown compared to the previous year’s pace of growth.
Key Takeaway: Industry job growth slowed to 1.2% year-over-year—down from 3.1% in the previous 12-month period.
According to AGC Chief Economist Ken Simonson, the primary culprit is uncertainty around tariffs and labor availability, which has led construction owners to delay, scale back, or cancel new projects.
Breakdown of Construction Employment Trends
- Nonresidential Construction:
Gained 6,400 jobs from June to July, totaling 114,400 new jobs over the year (+2.4%).
Sectors include:- Nonresidential building
- Specialty trade contractors
- Heavy and civil engineering
- Residential Construction:
Lost 4,400 jobs in July and saw a 12-month decline of 18,200 jobs (-0.5%).
Includes homebuilders and residential specialty trade contractors.
What This Means: While nonresidential activity has propped up employment totals, the cooling residential market is dragging down overall sector momentum.
Construction Spending Falls for Second Straight Month
Total construction spending dropped to a seasonally adjusted annual rate of $2.14 trillion in June 2025, a 0.4% decline from May and 2.9% drop compared to June 2024.
Spending by Sector:
- Private Residential:
-0.7% month-over-month
-6.2% year-over-year - Private Nonresidential:
-0.3% month-over-month
-4.0% year-over-year - Public Construction:
+0.1% month-over-month
+5.2% year-over-year
Insight: Private sector cutbacks are outweighing modest gains in public sector spending, putting a damper on industry-wide investment.
Calls for Policy Stability to Revive Demand
AGC officials are calling on the Trump administration to finalize pending trade agreements and adopt targeted immigration enforcement. They believe such moves would provide greater economic certainty, enabling developers to re-engage with stalled or shelved construction plans.
“The more uncertainty there is, the less likely developers are going to invest in significant new construction projects,” said Jeffrey D. Shoaf, CEO of AGC.
Conclusion: Modest job gains can’t offset broader market headwinds.
The construction industry is navigating a period of mixed signals—modest employment gains in nonresidential sectors contrasted by shrinking residential jobs and investment. If uncertainty around tariffs and workforce availability continues, employment may stagnate further.
