Demand for workers on data centers is contributing to construction workforce shortages even as market conditions soften, according to the results of a recent workforce survey conducted by the Associated General Contractors of America (AGC) and the National Center for Construction Education and Research (NCCER).
As a result of the tight labor conditions, workforce shortages remain the top reason for construction project delays, AGC officials said.
“The need for people to work on new data centers is keeping labor conditions tight even as demand for many other types of projects remains relatively soft,” said Ken Simonson, AGC’s Chief Economist. “Meanwhile, the nation is not producing enough qualified workers, even as federal immigration policies are impacting nearly one-third of firms.”
Thirty-seven percent of respondents reported reducing their firm’s headcount by at least 5 percent during the past 12 months, while 34 percent increased headcount by at least 5 percent.
Nevertheless, nearly three-quarters of all respondents expect to add employees during the next 12 months. Nearly all firms need to replace departing workers: 87 percent of respondents reported openings for hourly craft positions and 82 percent have openings for salaried positions.
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Among firms with craft openings, 88 percent reported that those positions are as hard or harder to fill than a year ago, including 50 percent that said they are harder to fill. For salaried positions, 87 percent of firms with openings reported they are as hard or harder to fill than a year ago, including 41 percent that said they are harder to fill.
Simonson noted that one of the biggest challenges is finding candidates with the qualifications firms need. Half of respondents reported that available candidates are not qualified to work in the industry because they lack needed skills, certificates, or licenses.
Softer market conditions are not being felt evenly across the industry, according to the survey results. While 30 percent of the smallest firms (those performing $50 million or less of work annually) increased their headcount by at least 5 percent during the past year, that share rose to 54 percent among firms performing between $50.1 million and $500 million of work annually and 79 percent among firms performing more than $500 million.
Competition for workers is particularly acute in the rapidly expanding data center market. Twenty-eight percent of respondents reported performing construction work on a data center project during the past 12 months. Among those firms, 58 percent said that data center projects have increased competition for skilled workers, while 49 percent reported increased wage pressure and 37 percent identified the availability of workers or subcontractors as their biggest challenge in pursuing or delivering those projects.
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The survey found that immigration enforcement is another source of workforce pressure for some contractors.
Roughly 29 percent of respondents reported at least one direct or indirect impact from immigration enforcement activities during the past six months. Six percent said a job site or offsite location was visited by immigration agents, 12 percent said workers left or failed to appear because of actual or rumored immigration actions, and 16 percent reported that subcontractors lost workers.
The impact varies considerably across the country. Forty-two percent of respondents in the South reported at least one direct or indirect impact from immigration enforcement, compared with 37 percent in the Northeast, 22 percent in the West, and 17 percent in the Midwest.
Worker shortages continue to have consequences for project delivery. Forty-two percent of respondents reported that shortages of their own workers or subcontractors’ workers have delayed projects, making workforce shortages the most commonly cited cause of project delays. Overall, 74 percent of respondents experienced at least one significant project delay during the past year.
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Contractors are taking a range of steps to address workforce challenges:
- More than eight in 10 firms reported increasing base pay for hourly craft and salaried workers as much as or more than they did a year earlier.
- 36 percent initiated or increased spending on training and professional development.
- 49 percent added or increased online recruiting strategies such as social media and targeted digital advertising during the past year.
- 48 percent increased engagement with career-building programs at high schools, colleges, or career and technical education institutions.
NCCER officials noted that addressing workforce shortages will require the industry to focus not only on attracting new workers, but also on developing and retaining them.
“As contractors explore ways to secure the future of their workforce, it is critical that the industry takes a holistic approach to workforce development,” said Boyd Worsham, President and CEO of NCCER. “From recruiting and training to retention and advancement, we must commit to investing in our people and making construction a first-choice career.”
AGC officials said they are urging Congress and the Trump administration to increase investments in construction workforce development, including significantly boosting funding for high school career and technical education programs. AGC is also urging Congress to pass a new Workforce Innovation and Opportunity Act that directs a greater share of funding toward workforce training programs.
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However, AGC said that rebuilding domestic workforce development programs will take years. In the meantime, they urged federal officials to provide more lawful, workable pathways for people to enter or remain in the country and work in industries with persistent workforce needs, including construction. That should include establishing a new construction-specific temporary work visa program, AGC said.
AGC officials also urged policymakers to support responsible growth in data center construction while addressing the infrastructure, permitting, and workforce constraints that can limit development.
“Our goal is to make sure the construction industry remains a driver of economic growth in this country,” said Jeffrey D. Shoaf, AGC’s Chief Executive Officer. “That means investing in the domestic construction workforce, creating lawful ways to supplement that workforce where needed, and maintaining the market conditions that allow contractors to keep building and hiring.”
AGC and NCCER conducted the Workforce Survey in July and August 2026. A total of 1,830 individuals from a range of firm types and sizes responded to at least one portion of the survey.
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For survey materials including national, regional, and state fact sheets, visit news.agc.org.
Graphics courtesy of the AGC and NCCER 2026 Workforce Survey
