After years of historically high wage increases, compensation increases for construction workers continue to decline toward a more normal level. Last year, base salaries rose an average of 4.36%, according to data from compensation consultancy Personnel Administration Services. The decline follows average increases of 4.6% in 2024 and 5% in 2023.
PAS data from its 2026 Building/Construction Management Personnel Salary Survey suggests that the recent decline in salary increases has not yet bottomed out. Respondents predict that, on average, they expect to offer raises of 3.9% this year. If this prediction holds, it would be the first time since 2020 that average compensation increases have been below 4%.
PAS President Jeff Robinson says that while respondents tend to underestimate future compensation, he believes the 2026 forecast is likely to be accurate. “I think we’d be lucky to get to 4.1% or 4.2%,” he says. “I think it will be very close to that 4%.”
The northeastern states of Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont saw the biggest declines, to 4.2 percent in 2025, from 4.6 percent in 2024. This year, respondents in that region expect annual increases to slow to 3.6 percent, a percentage drop of 0.6 percent. The Southeast region, which includes Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee, is the only other area of the country that is forecast to see a 0.6% percentage drop this year, to 4% from 4.6% last year.
Notably, the two regions that were already at 4% last year predicted in the survey that they expect to remain at 4% this year, including the Pacific Northwest (Alaska, Idaho, Oregon and Washington) and the Plains states (Iowa, Kansas, Missouri and Nebraska).
Robinson notes that the 4% increases are within the range of historical norms, so there is a chance that these increases will stabilize over the next few years.
The level of annual increase may vary by market sector. In the building and industrial sectors, for example, Robinson says many staff categories, particularly superintendents, outperformed averages.
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Robinson notes that respondents often include those doing critical work in these sectors. Meanwhile, he said the survey showed some cooling in the heavy civil sector, noting that the sector had previously been delivering above-average increases compared to other sectors.
The boom in data center work has been a big driver of new hire compensation in recent years, says David Williams, market leader for recruiting firm Kimmel & Associates. “About half of my searches are done in data centers,” he says.
On a staffing level, he says operations professionals, particularly project managers, are in high demand. “Before data centers [got big]a senior project manager was probably looking at $150,000 [annually] and now it will go up to $175,000 for a senior project manager,” he says.
Williams adds that data center projects tend to be high-margin work, and construction workers are seeing healthier bonuses. “Where traditionally, you’d see a 25% bonus, now it’s 30%,” he adds.
Williams says he’s also seeing some backlash that’s driving some candidates away from companies engaged in data center projects. “I’ve heard people say that some of the companies jumping into data centers don’t have that much experience and [employees] they’re saying, ‘This is a disaster. I’m out’”.
A notable trend in compensation packages is the significant increase in vehicle bonuses. Of the 27 positions that PAS tracks, 25 have seen double-digit vehicle endowment increases since 2023. Nearly half of those positions saw average vehicle endowment increases of at least 20% between 2023 and 2026. At the high end, business development directors saw average vehicle endowments increase by 41% over that time period.
Bob Honour, president of recruitment firm Honor Consulting, says he has seen a marked increase in companies offering vehicle allowances, moving away from offering company-owned or leased cars. As this trend has taken hold, employees and job candidates are learning what benefits they should expect. “[Employees] understanding that maybe that allowance was never enough to begin with,” says Honor.
“When they agreed to, say, a $400 allowance and finally went online [in] of the numbers, they realized, ‘Wait, that wasn’t so good. We might have to step it up a little bit.”
Honor says that while certain sectors such as mission-critical are hiring aggressively for specific projects, he has seen more caution on the part of both employers and employees.
“There’s a lot of hiring going on, but it’s a bit of a slower process,” he says. “Part of it is because people are less interested in making a move. We started to notice that last year. I think it’s all because of the uncertainty about the economy.”
