The industry has seen both the number of layoffs remain steady as hiring slows, indicating contractors are in a holding pattern due to soft demand.

Construction’s slow labor market continued through the end of the first quarter of 2026. The industry counted 224,000 unfilled jobs on the last day of March, according to a Tuesday Bureau of Labor Statistics report.

“The industry’s labor market continues to be defined by an utter lack of churn,” Anirban Basu, chief economist for Associated Builders and Contractors, said in a release. “Construction industry hiring rebounded from February’s historically low level but remains extremely subdued.”

Indeed, quits held steady in March at 139,000, or about 5,000 more than in February. Meanwhile, employers laid off or discharged 145,000 workers in March, or about 5,000 fewer than in February, representing a drop of 3%. 

“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.

The low layoff rate has remained a trend as builders hang onto workers while demand has moderated, said Macrina Wilkins, director of market insights for the Associated General Contractors of America. March 2024 was the last time that job openings and layoffs “intersected,” she said. Since then, openings have declined while layoffs have stayed low.

“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.”

The March report is also the first since the beginning of the Iran War. Wilkins noted the primary impact from the conflict would be higher energy prices and increased uncertainty.

“That would raise project costs and could delay or reprioritize projects at the margin. 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,” she said.

Source: Construction Dive

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