The development business has seen a brand new wave of volatility and uncertainty to kick off 2025, giving renewed significance to retaining observe of the business’s stats and benchmarks.
A latest webinar hosted by info and tech supplier ConstructConnect coated key financial traits that contractors ought to be watching all through 2025.
1. Nonresidential Development Job Positive factors Stay Robust
Although the speed of job good points in nonresidential building has slowed from the relative highs of 2022 and 2023, it continues to outpace progress in different sectors.
Ken Simonson, chief economist on the Related Common Contractors of America, stated through the webinar that the newest information from the Bureau of Labor Statistics exhibits complete building employment was up 1.7% year-over-year in April, which added about 150,000 jobs.
Nonresidential building jobs rose 2.9% in the identical interval. The business noticed solely a 0.1% year-over-year improve in residential building jobs final month.
States with probably the most building employment good points between March 2024 and March 2025 have been:
- New Mexico: +12.0%
- Idaho: +10.0%
- Kentucky: +8.0%
- Ohio: +6.7%
- South Carolina: +6.7%
States with the best year-over-year declines in building employment have been:
- Washington: –5.3%
- Iowa: –4.8%
- Massachusetts: –4.1%
- Montana: –4.0%
- Arizona: –2.8%
2. Development Job Openings & Layoffs are Trending Down
Simonson additionally factors to BLS information when displaying that building job openings and layoffs as a share of the whole workforce have trended down within the final 12 months.
In March of this 12 months, layoffs represented simply 1.7% of the whole workforce, in comparison with 2.2% in March 2024 and eight.5% in March 2020. Equally, job openings made up 2.9% of the whole workforce, down from 4.0% in March 2024.
Development job hires as a share of complete employment got here in at 3.6% this March vs. 4.1% in March 2024.
“Job openings as a % of crammed and open jobs have additionally been tailing off fairly sharply during the last three years, together with the final 12 months. Openings marketed on the finish of March have been solely 2.9% of the workforce,” stated Simonson. “And whereas that is not a report low, it clearly exhibits that corporations not solely are usually not hiring now, they are not even trying to rent on the extent that that they had been. So that implies that there is a large pause happening in present building.
“However there’s one different factor to notice, layoffs even have dropped to a close to to a report low for March. And so that claims to me that whereas corporations aren’t busy sufficient proper now to be hiring or promoting jobs, they nonetheless count on to choose up within the close to future, and that is why they’re hanging on to the employees.”
3. Wages Down Barely, However Development “Premiums” are Rising
Common hourly earnings for building staff rose 3.9% year-over-year in March 2025 and are up 25% from February 2020, based on BLS information. Nevertheless, the newest 3.9% improve is down from a roughly 5% year-over-year improve that remained regular from February 2022 till September 2024.
Union and salaried wages within the business additionally stay on the upswing, stated Simonson.
“AGC is certainly one of about 10 associations that assist the Development Labor Analysis Council, which analyzes all union settlements, and so they reported that final 12 months that first-year settlements averaged 4.7%,” stated Simonson. “Actually, 15% of settlements had a first-year improve of greater than 6.5%, and so that implies that the ground has been in-built, a minimum of for union wages.
“One other supply, PAS, that has for over 40 years surveyed firms in building about what they pay their salaried and govt workers, additionally discovered that wages have been going up, or salaries going up at a couple of 4.5% charge final 12 months.”
One other development price watching, based on Simonson, is the rising “premium” contractors are paying their staff, that means how rather more staff are paid to remain in building vs. working in different fields.
General, the development wage “premium” was +18.8% in March 2025 vs. +16.6% in January 2022. For nonresidential constructing building, the premium sat at 27.3% as of March, up from 26.9% in January 2022.
4. Materials Prices Stay Unstable
Whereas the cash going to these engaged on building has remained comparatively regular in the previous couple of years, materials enter costs are one other story. Simonson factors to the producer worth index for nonresidential inputs, which not too long ago rose to 1.1% as of March 2025. Whereas this pales compared to the 40% improve the business noticed in February 2020, the most recent 1.1% is the biggest year-over-year improve this business has seen since July 2024.
“Enter prices for building have gone up 40%, rather more than the 24% that customers have rightly complained about,” Simonson stated. “Actually, for some supplies, it is rather more. Copper and brass mill shapes, that worth has gone up 69%. For metal mill merchandise, 54%, and for gypsum constructing supplies, 52%. And these are based mostly on costs that have been collected round March 11, earlier than the tariffs have taken impact.”
