The unemployment rate in construction, not seasonally adjusted, reached 5% in December, according to data recently released by the Bureau of Labor Statistics. Minnesota had the highest rate, followed by Rhode Island and Connecticut. Hawaii, Oklahoma and Colorado experienced the lowest rates. While the national figure marks a 0.2% decline since December 2024, the construction unemployment rate rose 0.9% month-on-month since November.
“The construction industry continues to face weaker demand due to tariff headwinds and supply disruptions that are pushing up building material prices, driving up insurance costs,” Bernard Markstein, president and chief economist at Markstein Advisors, which analyzed the data for builders and associated contractors, said in a statement. Also, “an uptick in immigration enforcement [is] contributing to a shortage of skilled construction workers, which has increased pressure to raise wages and salaries.”
Compared to figures released in December 2024, 30 states experienced lower construction unemployment rates in December 2025, while 17 states had higher rates and three were flat. Since November 2025, however, only three states saw lower unemployment rates, with 44 states’ rates increasing and three remaining flat.
Looking ahead, Markstein noted, interest rate cuts and advances in artificial intelligence could help contractors offset high costs. “This year there is likely to be more interest rate cuts,” he said. “Adopting AI-powered software and equipment can help some companies control costs and gain greater efficiency from their existing workforce.”
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