With inflation rising this year and many construction companies struggling to hire enough workers, unions and merit-based employers continue to pay historically high wages for labor. Nationally, both union and non-union workers are seeing wage increases averaging more than 4 percent, according to surveys.
In August, construction unemployment fell to a record low of 3.1 percent, according to an analysis of government data by the Associated General Contractors of America. AGC’s most recent workforce survey also found that contractors are “struggling to fill opportunities amid growing data center construction demand and a crackdown on immigration.”
Since August 2025, the industry has added 120,000 jobs. That equates to a 1.5% gain, which outstrips the 0.4% increase in total nonfarm payroll employment, according to AGC.
Union trades saw first-year deals continue to reach record highs in the first half of this year, averaging 4.9%, according to surveys by the Construction Labor Research Council. The results follow three consecutive years of average increases in the 4.5% to 4.7% range. That trend is expected to continue this year and into next year, says Matt Minarik, senior data analyst at CLRC. Outside multi-year agreements, the percentage of average remuneration decreases. In the first half of 2026, total package increases for all contract years were 4.1%, according to CLRC.
“Some people said they were giving higher increases in the first year to account for inflation,” he adds.
CLRC predicts that first-year increases could remain flat or decline slightly in 2027 and 2028.
Regionally, the Northeast (Conn., DC, Del., Maine, Md., Mass., NJ, NH, NY, Pa., RI and Vt.) saw the lowest first-year average increases in 2025 at 4.4%, but the highest increases in the first half of 2026 were 5.8%. By contrast, the Northwest (Alaska, Idaho, Ore., Wash.) saw the highest average increases in the first year in 2025 — 5.6 percent — but the lowest increases in the first half of 2026 were 4.3 percent.
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So far this year, the trades that have experienced the highest increases in the first year in new settlements are Carpenters. [7%]plumbers [5.9%]Sheet metal workers [5.6%]Teamsters [5.5%] and Palettes [5.1%]. Trades at the low end of increases include covers [2.9%]Plasters [4.2%]Cement masons [4.3%]Millers [4.6%] and Insulators [4.6%].
For all new settlement years, Electricians, Teamsters and Glaziers lead the list so far this year at 4.6%.
A closer look at market trends by sector and region offers a precise view of the businesses that benefit the most. Ken Simonson, chief economist at AGC, notes that just as the artificial intelligence boom is driving construction activity, the demand for workers who can fill that need is increasing. “There’s a huge demand for electricians, HVAC and plumbers who can build data centers and are willing to move to wherever the data centers are.”
Jerry Crawford, managing director of Turner Construction, agrees that while there is strong demand overall, there are availability issues in some localized markets and some trades. He says Turner sees the highest pressure around MEP transactions for data centers, energy and advanced manufacturing projects.
Increase in union wages in percentages
“Overall, I wouldn’t characterize what we’re seeing as broad-based labor inflation,” he says. “It’s really more about certain markets and trades where the demand exceeds the available workforce.”
Jeff Robinson, president of consulting firm PAS, says open store compensation data supports this trend. The 2026 Merit Shop Salary and Benefits Survey, conducted by PAS, shows that companies that offered salary increases in 2025 reported an average increase of 4.1% nationally across all trades combined. Respondents expect an average salary increase of 3.9% this year. However, Robinson says that based on what he’s seeing so far this year, he expects wage increases in 2026 to remain flat at 4.1%.
While firms forecast 3.9% this year across all trades, they forecast 4.3% specifically for electricians. Robinson notes that the estimate could also be conservative, easily rising later in the year.
Rates are even higher among large contractors, who are more likely to work on data centers, energy projects, and manufacturing projects. Among contractors with revenue of $50 million or more, the median raise for electricians is 6.7 percent and the median is 8.8 percent, according to PAS data.
Simonson agrees that larger companies are likely to drive wage increases, noting that recent AGC headcount data shows that companies with revenue of $50 million or more are more likely to add workers, while smaller companies are more likely to reduce their workforce.
Simonson notes that while there are differences, the construction workforce generally outperforms other industries. Wage increases of more than 4% are above the consumer price index, which reached 3.4% in August. However, he notes that construction workers are also likely to drive farther to find work than most workers. “If you drive a big truck with a diesel engine, you have my sympathies,” says Simonson.
