Total nonresidential construction spending was virtually unchanged in January, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.245 trillion.

Spending was down on a monthly basis in 9 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.4%, while public nonresidential construction spending was up 0.6% in January.

“Private nonresidential construction spending contracted for the fourth consecutive month in January and is now down 8% from the December 2023 all-time high,” said ABC Chief Economist Anirban Basu. “While harsh winter weather likely bears some blame, the major issue is the ongoing decline in computer/electronic manufacturing construction. With CHIPS Act-incentivized megaprojects wrapping up, spending in that subcategory is down nearly 40% over the past 18 months.

“With the exception of data centers, which saw another 2% jump in spending during January, there are few sources of momentum to offset the precipitous decline in manufacturing construction activity,” said Basu. “This lackluster performance is especially concerning in light of the ongoing conflict in Iran, which will ignite materials price escalation and heighten already elevated levels of economic uncertainty. While ABC’s Construction Backlog Indicator rebounded slightly in February, rising 0.1 months from January’s four-year low, it may be a difficult first half of 2026 for many contractors.”

Construction input prices increased 1.3% in February compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices also increased 1.3% for the month.

Overall construction input prices are 3.1% higher than one year ago, while nonresidential construction input prices are 3.7% higher. Prices increased in all three energy categories last month. Natural gas and unprocessed energy materials prices were up 10.9% and 6.0%, respectively, while crude petroleum prices were up 4.7% in February.

“Construction materials costs surged in February due to significant increases in oil, copper, lumber and steel prices,” said ABC chief economist Anirban Basu. “Notably, this data does not reflect the precipitous increase in oil prices, which are near $100/barrel as of this morning, caused by the conflict in Iran. That will put upward pressure on construction materials prices directly by raising diesel prices and, indirectly, by raising the cost of shipping other inputs.

“While input prices are still up a relatively modest 3.1% since February 2025, they rose at a staggering 12.6% annualized rate during the first two months of 2026,” said Basu. “Which is to say, materials price escalation could serve as a real headwind to construction activity over the next several months. Fewer than 1 in 4 contractors expect their profit margins to shrink over the next six months, according to ABC’s Construction Confidence Index. Those expectations will bear close monitoring if input prices continue their rapid ascent.”

By Luiza Mills, Interstate Electrical Services Corporation

Earlier this month we celebrated Women in Construction Week. This is a perfect opportunity to highlight the growing role women play in our industry. As of 2024, 11.2 percent of the U.S. construction workforce was female.  All told, there were about 1.34 million women working in our industry, up from 802,000 in 2012.

Just as encouraging is the fact that women in construction are closer to achieving wage parity than are women in the economy as a whole.  Nationwide, women earn 83 cents for every dollar men earn, but in construction women earn 94 percent of what men do.  We can’t rest on our laurels until the gender wage gap disappears, but these numbers represent progress. 

The same is true for the overall number of women in our industry.  Although participation among women is growing, with ABC estimating that the industry will need an additional 349,000 workers to meet demand this year, 11.2 percent is not enough.  Our companies must attract qualified employees of every background regardless of gender, race, ethnicity or national origin.

Yet amid this generally encouraging news came a big step backward earlier this month, when Massachusetts Governor Maura Healey announced a union-only project labor agreement for the $1.2 billion replacement of a drawbridge connecting Boston and Cambridge.  Excluding the 82.7 percent of the Massachusetts construction workforce from a project hurts those workers and the taxpayers forced to pay more for projects due to reduced competition, few are more hurt by PLAs than women and minorities. 

As the Black Economic Council of Massachusetts wrote to state lawmakers in 2021, PLAs require contractors to hire solely from union halls, where “most Black construction workers and other workers of color do not belong.”  Both Women Construction Owners and Executives and the National Black Chamber of Commerce have gone on record opposing PLAs.  

We’re living through a time of great progress in the construction industry, but many challenges remain.  Few are more pressing than the need to include all qualified workers in the construction workforce and doing that will require us to redouble our efforts on behalf of free and open competition.

Associated Builders and Contractors reports that its Construction Backlog Indicator rose to 8.1 months in February, according to an ABC member survey conducted Feb. 20 to March 6. The reading is up 0.1 months from January but down 0.2 months from February 2025.  

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog increased sharply during February in the Middle States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Notably, the Middle States is the only region with higher backlog than one year ago. 

ABC’s Construction Confidence Index readings for sales and staffing levels increased again in February, while the reading for profit margins fell. Sales expectations are better than they were one year ago, while profit margin and staffing expectations are slightly worse. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Backlog bounced back from January’s four-year low, yet it remains subdued by historical standards,” said ABC Chief Economist Anirban Basu. “It’s notable that backlog growth has been confined to the Middle States region. After struggling in the immediate aftermath of the pandemic, the Midwest has posted surprisingly strong population and economic growth over the past year, and that growth has clearly translated into increased levels of construction activity. 

“Contractors under contract to work on data centers (11.2 months) continue to have significantly longer backlog than those who are not (7.6 months),” said Basu. “While data center work should continue apace over the next few quarters, the conflict in Iran, which began during this middle of this month’s CBI survey period, may suppress demand for other forms of construction work due to elevated materials prices, borrowing costs and uncertainty. 

“While contractors remain slightly optimistic that their profit margins will expand over the next six months, that confidence may not survive the recent and precipitous increase in oil prices,” said Basu. “Rising input costs, if persistent, could weigh on hiring expectations, which were particularly upbeat in February. The CCI series for staffing level expectations rose to the highest level since March 2025.”

The construction industry had 231,000 job openings on the last day of January, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings decreased by 14,000 in January and are down by 1,000 from the same time last year.

“While construction hiring accelerated in January, rising to the fastest rate since the first half of 2025, that’s unfortunately not saying much,” said ABC Chief Economist Anirban Basu. “The industry’s hiring rate is still slower than at any point between the start of the data series in 2001 and the end of 2019. Contractors remain confident that their staffing levels will expand over the next six months, according to ABC’s Construction Confidence Index, although that confidence has remained intact for much of the past several years while hiring has remained subdued.”

Construction input prices increased 0.7% in January compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices increased 0.6% for the month.

Overall construction input prices are 2.3% higher than a year ago, while nonresidential construction input prices are 2.9% higher. Prices increased in 2 of 3 energy categories last month. Crude petroleum and unprocessed energy materials prices were up 1.8% and 0.4%, respectively, while natural gas prices were down 2.9% in January.

“Nonresidential construction input prices rebounded in January, surging at a blistering 7.1% annualized rate for the month,” said ABC Chief Economist Anirban Basu. “While this sharp monthly rise can be traced to significant increases in prices for tariff-affected products like copper wire and cable, iron and steel, and industrial controls equipment, aggregate input price escalation is not particularly concerning right now. Nonresidential materials prices are up just 2.9% over the past year and have been virtually flat over the past several months, rising just 0.2% since September despite some large monthly fluctuations.

“Trade policy may continue to put upward pressure on certain input prices, especially those subject to the large Section 232 tariffs,” said Basu. “Even so, input escalation is unlikely to rise too sharply as long as energy prices remain tame and demand remains subdued. Contractor sentiment seems to reflect this; optimism regarding profit margins improved in January, according to ABC’s Construction Confidence Index, although it remains lower than one year ago.”

The construction industry lost 11,000 jobs on net in February, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has grown by 42,000 jobs, an increase of 0.5%. Nonresidential construction employment decreased by 3,800 positions, with losses in 2 of the 3 subcategories. Heavy and civil engineering lost 6,500 jobs and nonresidential specialty trade lost 1,400 positions, while nonresidential building added 4,100 jobs in February. The construction unemployment rate was 6.9% in February. Unemployment across all industries rose to 4.4% and is 0.2 percentage points higher than one year ago. “Construction employment shrank again in February and has now declined in 8 of the past 11 months,” said ABC Chief Economist Anirban Basu. “Both the residential and nonresidential segments lost jobs for the month, adding to a recent string of downbeat industry data releases; construction spending has been in decline for several quarters, and ABC’s Construction Backlog Indicator fell to a four-year low in January. With the conflict in Iran adding to trade policy-related uncertainty and crude oil prices well above $80 per barrel, the industry’s outlook remains downbeat through the first few months of 2026.”

National nonresidential construction spending decreased 0.6% in December, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.24 trillion. Spending was down on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.7%, while public nonresidential construction spending was down 0.4% in December. “Nonresidential construction spending contracted sharply in December,” said ABC Chief Economist Anirban Basu. “This decline was concentrated in the manufacturing segment, which is now down nearly 16% from the August 2024 all-time high. Given trade policy uncertainty and the waning effects of the CHIPS Act, manufacturing-related spending will likely continue to decline over the next several quarters. “While manufacturing is the most significant driver of nonresidential weakness, it’s far from the only one,” said Basu. “Eight of the 11 private nonresidential subsegments contracted in December, and total private nonresidential spending is now down 1.8% year over year. Given this weakness, it is unsurprising that ABC’s Construction Backlog Indicator fell to a four-year low in January.”

According to an Associated Builders and Contractors analysis of the new U.S. Bureau of Labor Statistics’ 2025 Union Members Summary/, 11.1% of U.S. construction industry workers belong to a union, an increase from 10.3% in 2024, versus 88.9% who do not.

 

The BLS reported that 995,000 construction industry workers were members of a union, while 8 million chose to pursue their careers in merit-based construction in 2025. The construction industry grew to 9 million workers in 2025.

“Merit shop construction employment reached an all-time high in 2025. This demonstrates that the overwhelming majority of construction workers prefer to work in an environment where they can pursue their individual professional goals by acquiring new skills through industry-driven multiskilling and advance their careers based on merit and their desires,” said ABC President and CEO Michael Bellaman. “Furthermore, the supermajority of construction companies choose this employment relationship as they deem a merit-based culture the best way to attract talent and the most productive means to deliver long-lasting, high-quality projects at affordable prices.

“Preserving this choice is imperative as the industry builds out America’s infrastructure and military as well as communities across the country. One way President Donald Trump can give the contracting community immediate regulatory relief and preserve this freedom of choice is by eliminating former President Joe Biden’s harmful, union-only project labor agreement policies,” said Bellaman. “Eliminating PLA mandates would save taxpayers an estimated $10 billion per year on federal and federally assisted construction projects simply by creating a fair and open competitive landscape where 100% of the industry can participate.

“The industry is facing a workforce shortage of 349,000 in 2026, in addition to other major headwinds,” said Bellaman. “These include an aging and retiring workforce, immigration enforcement, high materials prices, tariffs, office vacancies and rapidly evolving technologies and innovation. Now is the time for the Trump administration to level the playing field in a way that creates more value for taxpayers through healthy competition for construction projects based on merit.”

By Luiza Mills, Interstate Electrical Services Corporation

ABC Massachusetts 2026 chair

One phrase that many of you have heard from your fellow members and ABC MA staff is “More members, more clout.”  Every voice matters, and that’s especially true in a state like Massachusetts. The open shop accounts for 82.7 percent of the construction workforce, yet our voice is not proportionately reflected when it comes to issues affecting our industry.

At ABC, we advocate for the open shop.  For our members to have a voice, we need to grow membership. With this, I’m particularly pleased to announce that fellow ABC MA Board Member Jim Abbott of Claro Advisors is the winner of the 2025 National ABC Beamer of the Year award, which goes to the member who referred the most new members to ABC.  Jim will be honored with an award during the board meeting at the National Convention in Salt Lake City next month. 

Membership is in Jim’s blood.  After graduating from the University of New Hampshire, he got his start as our Chapter’s membership director.  At Claro Advisors, many of his clients are ABC MA members.  He continues to serve on the Membership Committee and works closely with current Membership Director Venus Williams.

At a time when open-shop contractors in Massachusetts face a growing number of union-only project labor agreements and we continue to face restrictive construction ratios that limit our companies’ ability to expand, growing membership, and the growing voice that comes with it, have never been more important.

Let’s continue to support our foundation for future generations. We ask each of you to refer any prospective members to Venus Williams at [email protected]. Our current members are the best reference for future ones.  Let’s surpass our goal with one prospect from each of you this year getting us to attain our goal of 500 members.

Join me in congratulating and thanking Jim for his dedication and commitment to growing our Chapter, and congratulations on winning this important and richly deserved award.