During each of President Donald Trump’s campaigns for the White House, immigration reform has been a major policy cornerstone.
Now, almost a year into his second term, the impact has increased Immigration action and customs control it is being felt in the building, although not necessarily in ways that reflect wider headlines. That’s especially true for non-residential contractors, who are feeling pressure to find skilled workers for data centers and other megaprojects, but aren’t actually seeing widespread application on their jobsites, at least not yet.
“I’ve been jumping all over the country … and it’s hard to find a construction company that says they’ve been affected [by Trump’s immigration policy] even indirectly,” Ken Simonson, chief economist for the Associated General Contractors of America, told Construction Dive.
Ken Simonson
Courtesy of Associated General Contractors of America
Indeed, the impacts so far appear to be nuanced, even if expectations for broader and more sustained enforcement actions persist. The mobilization of law enforcement officials to find and remove people the administration deemed unauthorized in the United States began about five months into the start of Trump’s expected second term, said Brian Turmail, AGC’s vice president of public and labor affairs.
High-profile ICE actions took place in Portland, Oregon and Los Angeles in June and later in Chicago. On September 4, a attack on a Hyundai plant in Georgia led to the arrest of 475 workers.
But construction industry watchers say those headlines masked a narrower focus on construction as ICE appeared to widen its net.
Brian Turmail
Permit granted by Associated General Contractors of America
“It looks like the administration has moved from a workplace focus on immigration enforcement to a whole community focus on immigration enforcement,” Turmail told Construction Dive. “That sort of coincided with the increases we saw in ICE enforcement in LA and Chicago.”
Impact of immigration and exodus
Construction has a large number of foreign-born workers, many without authorization to work, Simonson said. About 34 percent of construction trades workers are immigrants, with some trades having as high as 61 percent, Simonson said.
“It means that the entry of potential construction workers has been disabled.”
Ken Simonson
Chief Economist, The Associated General Contractors of America
Despite this makeup, the reality for most contractors has been more muted than the national headlines would suggest. On the construction side, the impacts of the application have been less dramatic than the round at the Georgia Hyundai plant. In contrast, undocumented workers have proactively chosen to avoid being targeted.
Anecdotally, instead of raids, contractor groups say undocumented employees may simply not show up for work, either because they’ve already been detained by ICE or out of fear of the possibility.
Anirban Basu
Authorization granted by Associated Builders and Contractors
“With many undocumented construction workers self-deporting or simply no longer showing up for work despite remaining in the country, many of these contractors have not replaced that talent,” Anirban Basu, chief economist at Associated Builders and Contractors, told Construction Dive.
At the same time, Simonson said he sees the possibility of jobs enforcement efforts resurging in 2026, saying immigration has been “the dog that didn’t bite, but I hope the other shoe drops.”
Simonson said he increased funding for ICE the One Big Beautiful Billmore time to mobilize and train officers and fewer immigrants entering the US could mean the industry is only beginning to feel the impact of the administration’s policy.
Although concrete data is not yet available, Simonson said early estimates indicate that the number of people immigrating to the US has declined and even reversed, suggesting a flight of foreign-born workers.
“It means that the entry of potential workers into construction has been disabled,” he said.
“So the story of 2025 has been a market where the demand for construction services has been declining in many segments, while the cost of providing those services has been increasing. That’s not good from an industry perspective.”
Anirban Basu
Chief Economist, Associate Builders and Contractors
Although economists indicate that the residential construction sector likely has a larger share of foreign-born workers, a significant decline in the US labor pool could significantly reduce demand for construction projects in several sectors. In fact, having fewer foreign-born workers in the workforce could ripple beyond jobs to affect other areas of the economy.
“We can see a lot of states, a lot of communities within states, that suddenly have a lot of empty homes, a lot of people not showing up to work, not applying for jobs, not shopping at stores, not even going to health care or other things where they feel at risk,” Simonson said.
Pay more for workers
In this new scenario, as some sectors grow and others grow in construction, the skilled labor crisis could look very different in 2026 than it has in recent years.
For example, the result of the shrinking labor pool means that builders who need workers have sought out people with documentation, Basu said, driving up the cost of construction services. As the cost of that labor has risen, demand for new projects in many sectors outside of data centers has softened simultaneously.
“So the story of 2025 has been a market where the demand for construction services has been declining in many segments, while the cost of providing those services has been increasing,” Basu said. “This is not good from an industry perspective.”
High wages pushed down job offers at the end of 2025
Monthly data from the US Bureau of Labor Statistics measuring the number of unfilled jobs on the last day of each month.
Salary impact
On the other hand, while contractors may pay more for the services of documented workers, official payrolls may not show a large increase.
For years, the construction narrative has been a tight labor market where contractors competed for a small pool of competitive workers. In 2025, however, the contractors withdrew aggressive compensation strategiesaccording to a report by accounting and tax advisory firm Baker Tilly.
That indicates most builders are “right sized” for their backlog, said Aaron Faulk, principal and head of hospitality at Baker Tilly, which has its U.S. headquarters in Chicago.
According to contractor reports, the repercussions of immigration policy so far appear to be indirect, or at least occurring against the backdrop of several other economic obstacles facing the sector.
Aaron Faulk
Permission granted by Baker Tilly
“I’m not sure immigration policy is having a big impact on wages right now,” Faulk told Construction Dive. “Some of the uncertainty with tariffs, some with interest rates and some of the middle market segments that are not performing very well have moderated the need to expand the workforce.”
Within the data center boom and the regions where it is taking place, competition for workers will likely remain fierce. More often than not, the biggest bag will win.
“The reason data centers can attract higher quality talent is because hyperscalers can pay more,” Basu said. “These data center electricians, they’re big leaguers. They’re not Double-A or Triple-A, they’re major league and they’re very expensive and in very short supply. Who can afford that kind of talent at scale? Only the hyperscalers.”
According to Faulk, searches for high-performing project managers, an in-demand position with a hard-to-replicate skill set, are also likely to remain competitive.
The other shoe
In August, construction saw job openings fall 38% year-over-year as 2.2% of positions were filled, the lowest in nearly a decade. However, layoffs remained low, implying that contractors were expecting a turnaround in the market. And in November, job offers rebounded for 90,000 unfilled positions, according to the Bureau of Labor Statistics.
“Presumably, they’re still optimistic,” Simonson said. “That’s what I hear when I go around the country. Most contractors say, ‘Our order books for next year are strong.’ We’re just not getting the go-ahead for projects right now.”
Having a big drop in the pool of available workers, Simonson said, will highlight the boom and bust categories even more. As data centers likely continue to see growing demand from megaprojects, other areas such as multifamily and residential may continue to struggle.
“Those who have skills do this kind of thing [in-demand] project, they will be in high demand, while the more generic types of projects will languish,” Simonson said.
