What’s Happening with Construction and Immigration? Jobs Report Analysis

Further down in the details of the Employment Situation last week was a subtle but important trend: construction occupations saw little change, showing that they’ve been remarkably consistent for years. Since the pandemic, the unemployment rate for construction occupations has been hovering at historical lows. 

The spiky shape of the line reflects how seasonal construction jobs are, picking up in the summer and dropping off in the winter. The smaller spikes since the COVID-19 pandemic indicate more consistent demand, and even the higher wintertime unemployment rate from the recent past is lower than the summer rate of some past years.

Lightcast job postings for construction have remained stable for the past several years (note that these are online job postings, and openings for laborers posted on offline job boards would be excluded, but we would expect those to be consistent with the number of online jobs posted).

But even though those postings have held steady, wages have skyrocketed. They’re up over 20% since 2021 (inflation, despite being historically high over the period, is only up 13% from December 2021 to present, meaning that construction wages have well outpaced it). With demand rising and supply remaining consistent, prices are going up.

Two Implications of High Demand for Construction Workers

One has been unfolding for decades, and is ready to accelerate: fewer native-born construction workers means a greater need for immigrant workers. In the overall market, the US-born labor force has actually been shrinking, while the foreign labor force has grown consistently. This is a major focus of The Rising Storm, Lightcast research from earlier this year with a specific focus on immigration and workforce trends through the end of the decade.

This is especially significant in construction, which boasts a higher share of foreign-born workers than any other industry, and has also grown that rate most over recent years.

But despite an increasing number of immigrant workers, there’s still more construction work to do than workers to do it. 

Lightcast job postings show chronically high demand for construction managers, understaffed maintenance and repair occupations, and even sales reps. Construction is an industry hamstrung by shortages across the board.  With active home listings still hovering near historical lows, staffing problems may partly explain the consistent drop in housing starts over the past couple years; and this lack of supply has contributed to the persistent over-inflation of housing prices. 

Money is there to be made, but builders may not be able to make the supply. And if that happens, wages will continue to rise and construction projects will continue to be left unbuilt.