Construction sector employment increased by 4,000 positions in May as rising wages enabled the industry to add workers more rapidly than other sectors, according to an analysis of new government data the Associated General Contractors of America released in early June. Association officials noted that the industry has been adding jobs each month for over a year, but the increases have slowed amid recent market uncertainty.

“Nonresidential construction firms added employees in May for the 13th month in a row,” said Ken Simonson, the association’s chief economist. “However, constant changes in tariffs and other policies that are affecting the cost and demand for construction have led to a significant slowdown in hiring.”

Construction employment in May totaled 8,314,000, seasonally adjusted, an increase of 4,000 from April. Headcount rose by 126,000 jobs or 1.5 percent during the past 12 months, topping the 1.1 percent growth rate in total nonfarm payroll employment. However, the sector’s rate of growth was markedly slower than the 2.8 percent increase in construction employment recorded a year earlier.

Nonresidential construction firms added 11,300 workers in May, including 4,500 among specialty trade contractors, 3,100 in nonresidential building construction, and 3,700 in heavy and civil engineering construction. Residential construction employment offset those gains, declining by 7,400 jobs, as residential specialty trade contractors lost 11,000 positions while homebuilders and other residential building construction firms added 3,600 workers.

Average hourly earnings for production and nonsupervisory employees in construction—including most onsite craft workers and many office staff—increased 4.7 percent over the year to $37.13. That gain exceeded the 4 percent rise in pay for such workers in the overall private sector.

The unemployment rate among workers with recent construction experience fell to 3.5 percent in May, down from 3.9 percent a year earlier. A separate BLS report released earlier this week showed the job openings rate in construction declined to 2.9 percent in April, the lowest April level since 2020. The hiring rate inched up to 4.2 percent, while the layoff rate rose slightly to 2.1 percent. The data suggest that contractors are holding onto existing workers even as they scale back on new hiring, Simonson noted.

Association officials said the more federal officials can do to provide certainty about tariff rates, tax levels and federal spending priorities, the more developers are likely to proceed with stalled projects. They urged the administration to continue negotiating trade deals to eliminate tariff uncertainty, and for the Senate to pass the tax bill, noting that both would help ease investor and developer concerns.

“Construction firms continue to hire and boost wages, but the pace of growth has slowed as demand for certain types of projects cools,” said Jeffrey D. Shoaf, the association’s chief executive officer. “As federal officials provide more certainty about tariffs, taxes and investment levels, demand for projects is likely to rebound.”

View the construction employment data.