The US Facing the Greatest Construction Labor Pressure in 2026

■ Where is Construction Demand Outpacing a Skilled Workforce?

Across the United States, new homes and major infrastructure projects are creating huge demand for skilled workers, but the workforce in some states is struggling to keep pace. According to our Construction Labor Pressure Index 2026, Texas, Florida and North Carolina face the highest levels of labor pressure, based on factors including housing demand, employment growth and exposure to workforce shortages. To identify the areas facing the greatest workforce constraints, we analyzed construction demand, employment trends, wage pressure, and workforce shortages across all 50 US states. The resulting index highlights where contractors and builders may face the greatest recruitment and project delivery challenges.

Key findings:

• Texas ranks as the state facing the greatest construction labor pressure in 2026
• The construction industry needs an estimated 349,000 additional workers in 2026 to meet demand
• Approximately 298,000 construction positions remain open nationwide
• Construction employment has reached approximately 8.33 million workers nationally
• Four in five (80%) residential homebuilders say construction workers are difficult to recruit
• Over two thirds (71%) say that labor shortages have affected their ability to complete projects on schedule during the previous 12 months

■ What is the US Construction Labor Pressure Index?

The Construction Labor Pressure Index 2026 analyzes residential construction demand, construction employment growth and workforce shortage exposure to identify the states facing the greatest pressure. Each state was assessed across four weighted categories:

1. Construction demand (35%) , based on residential permit volumes relative to the highest state total.
2. Construction employment growth (25%) , based on available positive hiring indicators including year-on-year jobs added, employment growth and monthly jobs added.
3. Wage pressure (20%) , using construction demand and labor competition as a proxy for wage pressure.
4. Workforce shortage exposure (20%) , combining construction demand with evidence of a supply crunch based on construction job losses.

The category scores were combined to create a final score out of 100, with states ranked to show where construction demand, hiring activity and workforce constraints are exerting the greatest combined pressure.

■ The Top 10 States Facing the Greatest Construction Labor Pressure

Rank	State	Final Index Score
1	Texas	90/100
2	Florida	69/100
3	North Carolina	52/100
4	Ohio	43/100
5	Louisiana	42/100
6	Tennessee	40/100
7	Georgia	36/100
8	South Carolina	34/100
9	Arizona	32/100
10	Nevada	23/100

Texas

Texas ranks first after recording the strongest combination of housing demand and construction activity in the analysis. The state added 24,800 construction jobs year-on-year, more than any other state, as well as 5,200 jobs in June alone. Texas also issued approximately 12,180 residential permits, the highest figure in the study. Together, these figures point to a substantial project pipeline and sustained demand for skilled construction workers.

Florida

Florida ranks second in the index, issuing approximately 10,940 residential permits, the second-highest total nationally. However, the state lost 8,800 construction jobs in the annual employment data. This combination of sustained project activity and a shrinking workforce helps to explain the pressure facing employers and project delivery across the state.

North Carolina

North Carolina places third, adding 15,500 construction jobs year-on-year while construction employment grew by 5.6%. The state also issued approximately 6,240 residential permits. Strong housing demand and rapid employment growth continue to increase pressure on employers seeking skilled labor. The wider top 10 highlights how broadly the issue is affecting growing construction markets. Georgia, Louisianna, Tennessee, Ohio, Arizona, South Carolina and Nevada all show signs of strong construction activity alongside labor constraints. Louisianna recorded the fastest construction employment growth nationally at 7.7%, while nearly every major growth market in the ranking is located in the South.

■ What's Driving the Labor Shortage?

The pressure begins with the scale of future housing demand. America remains short of approximately 1.5 million homes, while the construction industry requires around 732,000 hires each year to support future housing needs. In the South alone, housing permits reached an annualized 708,000 units, more than any other US region.

Vacancies remain difficult to fill. Around 92% of contractors report difficulty filling open positions, showing that the challenge is not simply creating jobs but finding people with the skills to take them. Residential construction currently employs approximately 3.3 million workers, yet the available workforce must support new housing alongside infrastructure , industrial and commercial projects. The age profile of the workforce adds further pressure. Workers aged 55 and over account for roughly 22% to 23% of the construction workforce, and around one-quarter are approaching retirement age. As experienced tradespeople leave the industry, recruitment, training and retention will become increasingly important to maintain capacity. These constraints carry a measurable cost. Labor shortages are estimated to cost the US homebuilding sector $10.8 billion each year through delays and lost housing output, while contributing to approximately 19,000 homes not being built annually.

■ Why is Wage Growth Accelerating?

Persistent vacancies are intensifying competition for experienced workers. Construction wages have risen by approximately 4.2% to 4.4% nationally, while some residential construction wages have increased by 9.2% year-on-year as employers compete for skilled labor. For workers, rising pay can make construction careers more attractive. On the other hand, for contractors and builders, faster wage growth can add pressure to project budgets, particularly where labor needs are difficult to forecast or specialist roles remain vacant. The strongest pressure is likely to be felt in markets where housing activity and project pipelines continue to grow faster than the available workforce.

■ What Does This Mean for Contractors and Builders?

Skilled workers are becoming harder to recruit

Construction employment has reached a near-record 8.33 million workers, but demand continues to outpace supply. FBM's internal survey of 640 residential homebuilders shows how that imbalance is affecting businesses directly. Four in five (80%) said construction workers are difficult to recruit, reinforcing the scale of the recruitment challenge facing the industry.

When asked which area of their business has been most impacted by labor shortages, respondents said:

1. Recruiting skilled workers - 46%
2. Managing labor costs - 20%
3. Taking on new work - 14%
4. Meeting project deadlines - 12%
5. Retaining existing employees - 6%

Labor shortages are increasing costs and disrupting projects

For contractors and builders, that imbalance can make it harder to schedule work, maintain delivery timelines and manage costs. Where key roles remain vacant, businesses may have less flexibility to respond to delays or increases in demand. This pressure is already disrupting delivering timelines, with 71% agreeing that labor shortages have affected their ability to complete projects on schedule during the previous 12 months. Rising labor costs are adding further pressure, with nearly all respondents (95%) saying they have affected their business over the past year.

The most common consequences of rising labor costs reported by businesses were:

1. Increased project costs - 69%
2. Reduced profit margins - 64%
3. Higher prices passed on to customers - 50%
4. Increased reliance on subcontractors - 26%
5. Reduced ability to take on new projects - 26%
6. Delayed project starts or completions - 25%
7. Reduced hiring or expansion plans - 17%

Workforce pressures could constrain future growth

The effects extend beyond individual projects. If workforce constraints limit housing output, they can deepen existing supply challenges and affect affordability. The estimate that labor shortages contribute to 19,000 homes not being built each year illustrates how recruitment and skills gaps can influence the wider housing market. At a business level, two in five (40%) said they have delayed or reduced the number of projects they take on to help manage workforce pressure. Meanwhile, 89% expect labor shortages to persist or worsen over the next 12 months.

How are businesses responding to labor shortages?

Long-term workforce development will therefore be central to future growth. Investment in training, apprenticeships and skilled-trade career pathways can help expand the talent pipeline, while better workforce planning can help businesses anticipate where demand will be strongest. FBM's findings suggest businesses are already taking a range of steps to manage the pressure, with 48% increasing wages or benefits, 42% increasing their use of subcontractors, and 22% investing in employee training and upskilling.

Commenting on the findings, Joe Saad, Regional Vice President of Foundation Building Materials (FBM) Pacific South Region says: "The findings show that labor shortages are no longer isolated to one part of the country. Demand for housing, infrastructure and industrial development is putting pressure on workforces across many of America's fastest-growing states. "Construction employment is at historically high levels, yet employers are still struggling to fill critical roles. This highlights the scale of demand facing the industry and the importance of continuing to invest in workforce development and skilled training. "Persistent labor shortages affect more than individual contractors. They can delay project delivery, housing supply and increase construction costs. Ensuring the next generation of skilled workers enters the industry will be critical to support future growth. "Initiatives such as the Lowe's Foundation's commitment to train and develop hundreds of thousands of skilled tradespeople over the next decade demonstrate the kind of long-term investment needed to help strengthen the construction workforce pipeline."

■ Report Sources and Methodology

Methodology

The scores were calculated and ranked to create a top 10 index by analyzing the latest U.S. construction employment figures, residential building permit data and labor shortage indicators. States were scored based on the scale of construction demand, growth in construction hiring and exposure to ongoing workforce shortages, before being ranked to identify where labor pressures are currently most acute.

Final Construction Labor Pressure Score =

(Construction Demand Score × 0.35)

+

(Construction Employment Growth Score × 0.25)

+

(Wage Pressure Score × 0.20)

+

Sources

• Internal survey carried out on the FBM database. 640 residential homebuilder respondents. Survey questions included:
  • How difficult is it currently to recruit skilled construction workers for your business?
  • Has a shortage of labor affected your ability to complete residential projects on schedule in the last 12 months?
  • Which area of your business has been most impacted by labor shortages?
  • To what extent have rising labor costs affected your business over the past year?
  • How have rising labor costs affected your business?
  • Looking ahead to the next 12 months, do you expect labor shortages to improve or worsen?
  • Which of the following steps has your business taken to help manage labor shortages or workforce pressures successfully?