Construction input prices increased 2.6% in May 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 increased 2.4% for the month.

Overall construction materials prices are 9.6% higher than one year ago, while nonresidential construction input prices are 9.7% higher. Prices increased in 2 of the 3 energy subcategories last month. Crude petroleum prices increased 11.8% and unprocessed energy materials increased 6.9%. Natural gas prices were down 18.2% in May.

“Construction input prices surged again in May and are now up nearly 10% year over year,” said ABC Chief Economist Anirban Basu. “Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper. Contractors remain optimistic that their profit margins will expand over the next six months, according to ABC’s Construction Confidence Index, yet it appears likely that materials price escalation and stubbornly high borrowing costs could eventually weigh on profitability.”

By Michael Sams, Partner at Bowditch

The Massachusetts Appeals Court has affirmed judgment against a public awarding authority for acting in bad faith in refusing to award Revoli Construction a large public works contract. In Revoli, after a Superior Court trial, the Appeals Court affirmed Revoli’s jury verdict against the awarding authority for its bad faith refusal to award Revoli a public works project. The jury awarded, and the Appeals Court affirmed, Revoli’s $3 million dollar lost profit award, which, with interest, totaled $5.2 million at the time of award and now totals well over $6 million dollars. Revoli established at trial that it was the lowest responsible bidder and that the awarding authority acted in bad faith by rejecting its bid. Specifically, Revoli established that the awarding authority predetermined to reject Revoli before conducting any review of Revoli’s responsibility and by then seemingly rigging the review process against Revoli. There are few cases on bad faith in the public construction/public works contract award process and this case provides insight both on what bad faith means and how to win these cases.

As such, the Revoli decision is important for the public construction (including public works) industry. In the public contract awards process, favorites cannot be chosen. Bias is not allowed. Outcomes cannot be predetermined. Responsible bidders cannot be blacklisted. The playing field must be kept level. Low, responsible bidders must be awarded the contract. This decision affirms that when bad faith occurs, the contractor receives its lost profits, even though it did not actually perform.

In what often seems to be a judicial or agency related review process that weighs the review of awarding authority conduct greatly in the awarding authority’s favor, this is a reminder that bad faith exists in that process at times and that these cases can be won. Indeed, to assure the integrity of the public construction bidding processes, contractors should pick their battles wisely, but pursue cases where bad faith can be proven.

The following from the Appeals court is instructive on the issue of bad faith:

Bad faith is a 'general and somewhat indefinite term' that goes beyond 'bad judgment' or 'negligence,' suggesting 'a dishonest purpose or some moral obliquity,' a 'conscious doing of wrong,' or a 'breach of a known duty through some motive of interest or ill will.'" Buffalo-Water 1, LLC v. Fidelity Real Estate Co., LLC, 481 Mass. 13, 25-26 (2018), quoting Spiegel v. Beacon Participations, Inc., 297 Mass. 398, 416 (1937). "In the context of State action, [bad faith] includes the use of an otherwise lawful power for an improper purpose." Judge Rotenberg Educ. Ctr., Inc. v. Commissioner of the Dep't of Developmental Servs., 492 Mass. 772, 790 (2023). See Pheasant Ridge Assocs. Ltd. Partnership v. Burlington, 399 Mass. 771, 777-780 4915-3777-2971.1 (1987) (taking of land for public park pursuant to town meeting vote was invalid where manifest purpose behind taking was to block low or moderate income housing); Northeast Reclamation Corp. v. Wareham, 54 Mass. App. Ct. 564, 566 (2002) (jury's finding of bad faith supported by evidence of "town's pretextual rejection of the plaintiff's bid because of threats of litigation made by an ineligible bidder").

In the Revoli case, the evidence established for the jury that the awarding authority never had worked with Revoli yet decided before any review that it did not want Revoli on the project. It then seemingly rigged the review process to create a façade of propriety, but intended to meet the predetermined end result that Revoli was not responsible.

At the heart of what seemed to drive the awarding authority and its engineer in this direction was Revoli’s willingness on prior non-awarding authority projects to stand up for itself; namely, it’s history of pursuing its change order rights on prior public works projects (indeed, the awarding authority even cited Revoli as litigious early on in court pleadings). The awarding authority and its third-party engineer then concocted evaluations to be completed by awarding authorities on prior projects that were intended to reveal Revoli’s history of pursuing change order claims as a negative.

Revoli countered that it had a contractual, statutory and even constitutional right (to petition the government) to seek change orders and established that its change order history on the projects the awarding authority cited were not only in good faith but resulted in payments to Revoli approaching $2 million dollars. Moreover, the awarding authority was forced to admit that the pursuit of change orders alone is not bad faith, that one had to know about the substance of the change order requests to assess the good faith nature of them and that at the time it assessed Revoli as litigious, the awarding authority had no idea about the nature of Revoli’s change order history or that it had recovered close to $2 million on these claims.

Revoli established other pretextual issues the awarding authority created, as well. It demonstrated that although the awarding authority purported to be concerned about safety as a basis for rejecting Revoli, the bidder to whom it awarded the contract had a documented history of OSHA safety issues approximately ten times higher than Revoli’s. Revoli also demonstrated that the awarding authority ignored all of the positive reviews submitted by awarding authorities that previously worked with Revoli and that even seemingly positive reviews the awarding authority did not ignore, were treated negatively. The evidence also demonstrated that awarding authority personnel had not disclosed much of this to the City Manager at the time he approved Revoli’s rejection and award to the second low bidder.

Contractors cannot give up the fight. Awarding authorities are not benign boxes. They are institutions of people who, like anyone else, are constituted with pride and prejudice and who therefore, for any number of reasons, may act in bad faith. Certainly, that is not always the case but if contractors do not fight to maintain the level playing field in those instances where bad faith occurs, the lessons of the Ward Commission will be lost, along with the level playing field.

Meta Platforms Inc. and Associated Builders and Contractors have announced a partnership to educate and provide construction-ready career pathways for thousands of data center construction technicians kicking off in Indiana, Louisiana, Ohio and Texas as a meaningful step toward meeting the growing demand for data centers workers nationwide.

America’s Workforce Academy is a $115 million investment in the next generation of construction professionals that includes a five-week training program and a job offer from contractors working on Meta projects at the conclusion of the program. It creates another pathway into the construction industry that is an alternative to union apprenticeship programs.

Once an online application process is complete, scholarships, travel, housing and stipends for living expenses are granted to qualified job seekers. They will then participate in career readiness and safety training followed by five weeks of hands-on education, which includes core training and craft training.

“America’s Workforce Academy is a transformational endeavor creating incredible construction-ready careers. ABC is proud to work with Meta, CBRE and academy community partners to welcome all who want to build their career dreams as a professional in construction,” said Michael Bellaman, ABC president and CEO. “As an industry leader, ABC believes in creating opportunities for all on a level playing field and is ready to meet the industry’s needs and help individuals achieve their career dreams. ABC is honored to partner with Meta to expand the pipeline of data center construction workers.

“This new program is an innovative talent solution that is a critical part of addressing the construction industry’s ongoing workforce shortage and creates an accelerated, new-entrant strategy for job seekers,” said Bellaman. “Utilizing ABC’s existing, proven, nationwide educational ecosystem, these programs will be launched at ABC chapter training centers in key markets like Baton Rouge, Louisiana; Columbus, Ohio; Indianapolis and Houston. This new, national partnership will help train the next generation of craft professionals from entry points such as high school graduates, veterans and more.”

“The AI revolution is bringing change but also historic opportunities,” said Meta President and Vice-Chairman Dina Powell McCormick. “Skilled workers electrified rural America one pole at a time. They manned the factories that built the arsenal that won World War II. Now a new generation will pour the foundations and lay the fiber that secures American strength in this new age.”

The American Workforce Academy partnership will: 

• Build a Sustainable Talent Pipeline: establishes scalable, repeatable workforce development models that align industry, training providers and workforce systems to meet ongoing demand.
• Deliver Accelerated, Job-Ready Training: provides standardized, industry-aligned training that equips participants with the skills, safety knowledge and jobsite readiness needed to contribute quickly and effectively.
• Ensure Safety and Productivity From Day One: prepares participants to meet industry and project-specific safety standards and contribute productively on the jobsite from the outset.

“The sustained demand for data center construction technicians means the industry needs an all-of-the-above approach to address this shortage and grow the construction talent pool,” said Bellaman. “This important new partnership reaffirms that the construction industry offers careers of choice in today's complex job market. These new entrants may be beginning their careers on data center projects but by learning multiple competencies, are starting a life-long career in construction with near limitless possibilities.”

ABC member contractors are building the people who build America’s critical infrastructure by investing in flexible, competency-based and market-driven education methodologies to cultivate their long-term skill sets, creating a brighter future for their workers and their families. They deliver long-lasting projects and employ multicraft professionals who go home safe, healthy and fulfilled every day. ABC and its members are working to recruit, educate and upskill the nation’s future construction workforce with a network of more than 800 apprenticeship, craft, safety and management education programs—including 450 government-registered apprenticeship programs—across 20 different occupations.

“Thanks to the crucial, established team members of ABC’s vast network, which includes the National Center for Construction Education and Research, ABC’s 67 chapters, ABC strategic partners and ABC business partners, as well as ABC’s Tech Alliance, we are ready to deliver this transformational construction career readiness program across the country,” said Bellaman.

If you want to help build America’s future, apply to America’s Workforce Academy today.

National nonresidential construction spending increased 0.1% in April, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.250 trillion.

Spending was up on a monthly basis in 10 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.2%, while public nonresidential construction spending was up 0.4% in April.

Spending on data centers, which is included in the office category, increased another 1.9% in April, rising to a seasonally adjusted annual rate of $50.7 billion, and is up 28.1% over the past year.

“Nonresidential construction spending inched higher in April, but that growth was entirely due to a sizable increase in public sector activity,” said ABC Chief Economist Anirban Basu. “Private nonresidential construction spending fell for the seventh consecutive month and is down nearly 8% from December 2023’s all-time high. While much of the segment’s recent weakness is attributable to the rapid decline in CHIPS Act-incentivized manufacturing megaprojects, private sector construction momentum has been difficult to find outside of the still-ascendant data center segment.

“Those data center projects have buoyed the ABC Construction Backlog Indicator and kept ABC members confident about their outlooks, at least on the whole,” said Basu. “While that particular tailwind will persist for some time, rising materials prices and a lack of momentum in many commercial segments may eventually weigh on contractor sentiment.”  

The construction industry added 17,000 jobs on net in May, 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 increased by 68,000 jobs, up 0.8%. Nonresidential construction employment increased by 15,700 positions, with gains in all three subcategories. Nonresidential specialty traded added the most jobs, increasing by 11,400 positions. Heavy and civil engineering and nonresidential building added 2,600 and 1,700 jobs, respectively, in May. The construction unemployment rate was 4.1% in May. Unemployment across all industries remained unchanged at 4.3% and is also unchanged from a year ago. “The construction industry posted healthy job gains in May, especially within the nonresidential segment,” said ABC Chief Economist Anirban Basu. “The industry’s recent job growth, driven by insatiable demand for data centers and ongoing growth in publicly funded construction activity, appears set to continue over the coming months. Contractors also remain broadly optimistic about growing their staffing levels over the next six months, according to ABC’s Construction Confidence Index. “The bigger story in the May jobs report, however, is the surprising strength of the broader labor market,” said Basu. “Economywide job growth has accelerated, rising to a pace not seen since the early months of 2024, and the unemployment rate held steady at a perfectly acceptable 4.3% in May. This is an indication of broader economic resilience, albeit one that is not necessarily encouraging for the construction industry. “The combination of a stable labor market and resurgent inflation suggests that rate hikes are now more likely than rate cuts over the next several quarters, and high borrowing costs and tight lending standards will continue to weigh on construction activity during the months ahead,” said Basu.

The national March not seasonally adjusted construction unemployment rate was 6.7%, a 1.3% increase from March 2025, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released by Associated Builders and Contractors. The analysis found that only two states—Louisiana and Ohio—had lower estimated construction unemployment rates over the same period, four had the same rate and 44 had higher rates.

National NSA payroll construction employment was 58,000 higher than March 2025, its 12th straight month of year-over-year increases below 100,000. Seasonally adjusted payroll construction employment was 8.3 million, or 9.3% above its pre-pandemic peak of 7.6 million. 

Estimated state construction unemployment rates were lower than their pre-pandemic (February 2020) level in 20 states. As of March 2026, 19 states had lower construction unemployment rates compared to March 2019, and 31 states had higher rates.

“The Iran war and resulting hike in energy prices are negatively affecting the construction industry, which was already struggling with insurance premium increases, escalating labor costs, shortages of skilled labor and elevated interest rates,” said Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Consequently, some projects have been scaled back, put on hold or abandoned altogether. With slower construction activity, demand for construction workers is growing more slowly.” 

Recent Month-to-Month Fluctuations

In March, the national NSA construction unemployment rate declined 0.2% from February. Among the states, 28 had lower rates, 20 states came in with higher rates and two states (Kansas and Maine) had the same estimated construction unemployment rates as in February.

The Top States

The seven states with the lowest-estimated NSA construction unemployment rates for March were:

1. Oklahoma, 2.8%
2. South Dakota, 2.9%
3. Tennessee, 3.4%
4. New Hampshire, 3.5%
5. Colorado, Hawaii and North Carolina (tie), 4.1%

South Dakota had its second-lowest March NSA estimated construction unemployment rate on record at 2.9%, behind last year’s 2.7% rate. Note that Hawaii’s unemployment rate is for construction plus mining and logging.

The Bottom States

The five states with the highest NSA construction unemployment rates in March were:

46. New Mexico, 11.7%
47. New Jersey, 12.9%
48. Minnesota, 13.2%
49. Connecticut, 14.8%
50. Rhode Island, 16.2%

Rhode Island had the largest decline in its rate from February among the states, down 3.4%. Connecticut had the third-largest monthly decline, down 2.7%.

Associated Builders and Contractors reported today that its Construction Backlog Indicator rose to 8.8 months in April, according to an ABC member survey conducted from April 20 to May 4. The reading is up 0.2 months from March and up 0.1 months from April 2025. 

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

Backlog surged for contractors with greater than $100 million in annual revenues and is now 2.2 months higher than during April 2025. All other contractor size categories have smaller backlog than they did one year ago.

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels also increased in April. The readings for all three components are higher than they were one year ago and remain above the threshold of 50, indicating expectations for growth over the next six months.

“While backlog surged to a 10-month high in April, the industry’s recent momentum is highly concentrated among a subset of contractors,” said ABC Chief Economist Anirban Basu. “Booming data center construction has almost exclusively benefited the largest ABC members; 42% of contractors with more than $100 million in annual revenues are under contract to work on data center projects. The same is true for just 7% of contractors with less than $100 million in annual revenues. Critically, contractors under contract to work on data centers have significantly longer backlog (12.2 months) than those that are not (8.3 months).

“Despite diverging levels of backlog, ABC contractor members of all sizes remain confident about the outlook,” said Basu. “Just 1 in 5 expect their profit margins to shrink over the next six months, the fewest since January 2025, and contractors are similarly upbeat about their sales and staffing levels. The upshot is that weak construction spending data, the recent rise in oil prices and emerging materials price escalation have not diminished ABC member confidence.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month's work under contract based on the latest financials available, while CCI measures contractors' outlook for the next six months. View the methodology for both indicators.

Construction input prices increased 1.7% in April 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 increased 1.8% for the month.

Overall construction input prices are 7.0% higher than one year ago, while nonresidential construction input prices are 7.4% higher. Prices increased in all three energy subcategories last month. Crude petroleum prices increased 11.3%, while unprocessed energy materials and natural gas prices were up 9.2% and 4.9%, respectively, in April.

“Construction input prices surged again in April,” said ABC Chief Economist Anirban Basu. “Input prices have now risen more during the first four months of 2026 (6.2%) than over the prior three years (4.8%). While much of the recent rise can be traced to soaring oil prices, escalation was widespread in April, with tariff-affected materials like iron and steel posting particularly large price increases.

“In addition to the direct impact of this reemerging materials price escalation, too-hot inflation data coupled with upbeat labor market indicators suggest that the Federal Reserve is unlikely to cut rates this year,” said Basu. “While contractors remain busy, according to ABC’s Construction Backlog Indicator, these cost pressures will likely weigh on construction activity over the coming months.”

By Luiza Mills, Interstate Electrical Services Corporation

As you may know, Massachusetts voters will be weighing in on a number of ballot initiatives in November.  Among them is a proposal to impose the nation’s strictest statewide rent control policy.  I’d like to tell you why the ABC MA Board of Directors has voted to join Housing for Massachusetts, a coalition of small property owners, affordable housing developers, business and political leaders and housing advocates that oppose the proposal.

The state estimates that Massachusetts needs more than 220,000 additional housing units by 2035 to meet demand.  The ballot initiative calls for limiting rent increases to the lower of 5% or the rate of increase in the consumer price index (CPI).  Compare that to other states with rent control programs.  California limits increases to the CPI plus five percentage points; in Washington and Oregon it’s CPI plus 10.  Over the last 20 years, the average annual increase in the CPI has been 2.58%, but last year alone, property taxes rose by an average of 4.3% in Massachusetts.

This rent control policy would cause developers to shift their focus away from housing and many landlords would either take their units off the market or convert them to condos.

One of our ABC Board members summed up the impact succinctly.  “This restrictive rent control proposal will put a stop to housing production and lead to a degradation in housing across Massachusetts.”     

Policies that would actually bring down housing costs by increasing supply include promoting competition and avoiding union-only project labor agreements and rejecting attempts to extend prevailing wage to cover offsite work, such as was the case for the Clarendon Hill project in Somerville, where the state determined the modular units built offsite were subject to prevailing wages. 

The number of people choosing to leave Massachusetts has risen sharply in recent years and studies show that the biggest reasons are taxes, the cost of health care and housing.  A key factor in controlling housing costs is to increase supply.  We join with Housing for Massachusetts in opposing the rent control ballot initiative because it would have the opposite effect.

The construction industry added 9,000 jobs on net in April, according to an Associated Builders and Contractors analysis U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has expanded by 50,000 jobs, an increase of 0.6%. Nonresidential construction employment increased by 19,000 positions, with gains in all three subcategories. Nonresidential specialty traded added the most jobs, increasing by 12,600 positions. Nonresidential building and heavy and civil engineering added 5,600 and 800 jobs, respectively, in April. The construction unemployment rate was 3.8% in April. Unemployment across all industries remained unchanged at 4.3% and is 0.1 percentage point higher than it was a year ago. “Construction employment expanded modestly in April, but that’s largely due to weakness on the residential side of the industry,” said ABC Chief Economist Anirban Basu. “Nonresidential construction employment rose at a healthy pace for the month and is up a respectable 2.0% over the past year. This strength can be traced to surging data center construction spending, which is up 34% over the past year. It also helps explain why ABC member expectations for hiring remain elevated, according to ABC’s Construction Confidence Index, despite tepid industrywide job growth.”