The construction industry added 36,000 workers in May 2022 while hourly wages climbed at the fastest annual rate in four decades, according to a new analysis from the Associated General Contractors of America (AGC). The data, drawn from the latest Bureau of Labor Statistics report, paints a picture of an industry firing on all cylinders yet struggling to find enough skilled workers to meet demand. For contractors navigating this tight labor market, leveraging technology and efficient management practices is more critical than ever. As firms seek to do more with fewer hands, solutions like construction management software success how ASI general contractors achieved 2.5 percent profit growth with cloud technology demonstrate how digital tools can offset labor constraints by improving project efficiency and reducing waste.
May Employment Data: 36,000 New Workers and Gains Across All Sectors
The AGC analysis of May 2022 employment figures revealed total construction employment rose to 7,664,000, with gains recorded across every segment of the industry. The 36,000 net new hires marked a robust start to the summer construction season, though industry observers note the numbers could have been higher if more workers were available.
Breakdown by Sector
Employment growth was broadly distributed between residential and nonresidential construction, with notable contributions from specialty trades and heavy civil engineering:
- Residential construction added 16,700 workers, comprising 5,000 employed by homebuilders and multifamily general contractors and 11,700 at residential specialty trade contractors.
- Nonresidential firms added 19,400 employees, including 2,400 at general building contractors, 5,700 at nonresidential specialty trade contractors, and 11,300 at heavy and civil engineering construction firms.
The even split between residential and nonresidential hiring suggests broad-based demand for construction services across the economy.
Historical Context
While 36,000 new jobs in a single month is significant, it is the wage data that truly stands out when viewed through a historical lens. The construction industry has not seen this pace of wage acceleration since the early 1980s, when the economy was emerging from a period of high inflation and labor market upheaval.
Wage Growth Hits 6.3 Percent: Fastest Annual Increase Since 1982
Average hourly earnings for construction workers rose 6.3 percent from May 2021 to May 2022, marking the sharpest yearly increase since December 1982. Workers in the overall private sector saw a slightly faster rise of 6.5 percent over the same period, which the AGC says makes it harder for contractors to attract enough applicants to fill all their openings.
Comparing Construction Wages to the Broader Economy
The gap between construction wage growth and private-sector wage growth, while narrow, has real consequences for hiring. When other industries offer comparable or slightly better pay increases, workers have less incentive to choose construction over alternatives such as manufacturing, warehousing, or logistics. This is especially relevant as e-commerce and distribution centers continue to expand rapidly across the country.
Ken Simonson, the AGC’s chief economist, emphasized the dual nature of the wage data. “It is encouraging that contractors were able to add workers in May, but they will need many more to meet the increasing demand for infrastructure and private nonresidential projects,” he said. “Despite steeply rising pay for hourly workers, job openings in construction hit an all-time high at the end of April, while the industry’s low unemployment rate suggests experienced workers are scarce.”
What Higher Wages Mean for Contractors
For contractors, rising wages present both a challenge and an opportunity. The challenge is straightforward: labor costs are the largest line item on most projects, and a 6.3 percent year-over-year increase erodes profit margins if not offset by productivity gains or passed through to clients. The opportunity lies in the fact that higher pay attracts more workers to the industry, potentially easing the chronic labor shortages that have constrained project timelines for years.
Contractors who invest in productivity-enhancing technologies can offset wage pressures. Tools such as how cloud construction management software drives profitability for general contractors help firms manage project costs, streamline communication, and reduce rework, all of which contribute to healthier margins even as labor costs rise.
Record Job Openings Signal a Persistent Labor Supply Problem
Perhaps the most telling indicator of the construction labor market is the record number of job openings. There were 494,000 construction-industry job openings at the end of April 2022, a jump of 141,000 or 40 percent from April 2021. That was the largest total for any month since records began in 2000, according to Simonson.
The Unemployment Rate Tells the Same Story
The unemployment rate among jobseekers with construction experience tumbled from 6.7 percent in May 2021 to 3.8 percent in May 2022. The number of unemployed construction workers fell by 250,000, or 39 percent, to 392,000. These figures suggest that the pool of experienced construction workers available for hire has been almost completely drained.
When unemployment among experienced workers falls below 4 percent, it indicates that nearly everyone who wants a construction job already has one. New projects must either poach workers from other contractors, train inexperienced new entrants, or delay timelines. This dynamic gives workers significant bargaining power on wages and working conditions.
Key Labor Market Indicators at a Glance
| Metric | May 2021 | May 2022 | Change |
|---|---|---|---|
| Total construction employment | 7,628,000 | 7,664,000 | +36,000 |
| Average hourly wage growth (year-over-year) | — | 6.3% | Fastest since 1982 |
| Construction industry job openings (end of April) | 353,000 | 494,000 | +141,000 (40%) |
| Unemployed construction workers | 642,000 | 392,000 | -250,000 (39%) |
| Construction unemployment rate | 6.7% | 3.8% | -2.9 pp |
This table illustrates a labor market that has tightened dramatically in a single year. Openings have surged while the available labor pool has shrunk, creating conditions that favor workers and put pressure on contractors to find new ways to build with fewer people.
Implications for Project Timelines and Bidding
Record job openings combined with a shrinking pool of experienced workers mean that contractors must plan for longer project timelines and higher labor costs when bidding on new work. Owners and developers should expect that labor availability will be a significant variable in project scheduling for the foreseeable future.
Understanding the full project lifecycle helps contractors identify where labor bottlenecks are most likely to occur. Resources like key facts about construction project life cycle phases provide useful context for planning around labor constraints at each stage of a project.
Industry Leaders Call for Training Programs and Immigration Reform
The AGC says the lack of available workers is undermining construction activity across the country. In response, the association is urging public officials at all levels to implement more training programs that expose high school students and adults to career opportunities in construction.
Expanding the Pipeline of New Workers
Stephen E. Sandherr, the AGC’s CEO, stressed that the construction industry offers well-paying careers that do not require a four-year college degree. “There is no shortage of available, good-paying career opportunities in the construction industry,” Sandherr said. “Public officials should be exposing people to construction career opportunities that pay well and don’t require a college degree and the debt that all too often comes with it.”
The industry’s message to educators and policymakers centers on several key points:
- Career and technical education (CTE) programs in high schools should be expanded and better funded to give students hands-on exposure to construction trades before graduation.
- Apprenticeship programs need to be scaled up, particularly in specialty trades where the labor shortage is most acute.
- Community college partnerships can provide a bridge between basic trade skills and advanced certifications in areas such as building information modeling, equipment operation, and project management.
- Outreach to underrepresented groups, including women and minorities, should be a priority to broaden the talent pool.
Immigration Policy as a Workforce Solution
The AGC also called on Congress and the Biden administration to allow more workers with construction skills to legally enter the country. Immigration reform has long been a priority for construction industry associations, which argue that legal pathways for skilled foreign workers are essential to meeting the nation’s infrastructure needs.
The construction industry relies heavily on immigrant labor, particularly in trades such as concrete, masonry, roofing, and framing. Restrictive immigration policies, combined with an aging domestic workforce, have created a demographic gap that training programs alone cannot fill quickly enough. The AGC argues that a balanced approach combining training investments with immigration reform is the only realistic path to resolving the labor crisis.
Investing in Tools and Equipment to Do More with Less
While policy changes and training programs are long-term solutions, contractors need immediate strategies to cope with labor shortages. One of the most effective approaches is investing in the right tools and equipment to maximize the productivity of every worker on site. Understanding what equipment is essential for different types of projects can help contractors allocate resources wisely. For an overview of essential equipment, see essential insights on 40 construction tools list with images for building construction.
The Bottom Line for Construction Firms
The May 2022 employment data makes one thing clear: the construction industry is in a period of transformative change. Wage growth at a 40-year high, record job openings, and an unemployment rate below 4 percent for experienced workers are not temporary fluctuations. They reflect structural shifts in the labor market that will shape the industry for years to come.
Contractors who adapt to this new reality by investing in technology, training, and productivity-enhancing tools will be best positioned to thrive. Those who rely on the old model of abundant cheap labor will find themselves unable to compete for projects or for workers. The firms that succeed will be the ones that treat their workforce as their most valuable asset and invest accordingly.
The wage data from May 2022 is not just a number. It is a signal that the construction industry has entered a new era where labor is scarce, expensive, and worth fighting for. Contractors, educators, and policymakers all have a role to play in ensuring the industry has the workforce it needs to build the infrastructure, housing, and commercial spaces of the future.