According to Associated Builders and Contractors’ (ABC) analysis of Bureau of Labor Statistics data, the construction industry added 33,000 net jobs in January 2026—and nonresidential construction drove nearly all of that expansion. With 27,900 positions added across commercial, industrial, and infrastructure projects, nonresidential markets are proving to be the anchor of hiring activity as the industry enters a new year.

Key Takeaways

• According to Associated Builders and Contractors’ analysis of Bureau of Labor Statistics data, the construction industry added 33,000 net jobs in January 2026.
• Nonresidential construction accounted for 27,900 of those jobs, driving the vast majority of the month’s industry hiring.
• Nonresidential specialty trade contractors added 25,100 jobs, nonresidential building employment rose by 3,600, while heavy and civil engineering lost 800 positions.
• The U.S. economy added 130,000 jobs in January 2026, exceeding economists’ expectations of 70,000 jobs.
• The labor force participation rate was 62.5% in January 2026, with the employment-population ratio at 59.8%.
• Private payrolls grew by 172,000 jobs in January 2026, while government payrolls declined by 42,000 jobs.
• The construction unemployment rate was 6.9%, compared with an overall U.S. unemployment rate of 4.3%, underscoring continued tight but improving labor conditions.
• Chief economist Anirban Basu noted that January’s growth represents a rebound after 2025 remained essentially flat in net job creation.

January 2026 Nonresidential Construction Jobs: Headline Numbers

ABC’s analysis of BLS data serves as the primary source for understanding what happened in the construction sector during the first month of 2026. The numbers tell a clear story of renewed momentum.

Total U.S. construction employment increased by 33,000 jobs in January 2026 on a seasonally adjusted basis. This payroll growth helps reboot industry job growth after what ABC described as a relatively flat 2025 in net additions. For contractors and workforce planners who spent last year watching the labor market stagnate, January’s report is encouraging.

Nonresidential construction generated 27,900 of those new jobs—meaning this segment accounted for approximately 85% of all construction hiring during the month. The data, released in the national jobs report in February 2026, positions nonresidential work as the main engine of construction employment at the start of the year. It is important to note that the Bureau of Labor Statistics regularly updates its employment data through estimates and benchmark revisions, which can result in adjustments to previously reported job numbers.

By contrast, residential construction job trends remained more modest. While housing markets continue to face headwinds from interest rates and affordability challenges, commercial, industrial, and institutional projects are absorbing skilled labor at a faster clip.

Breakdown by Nonresidential Segment: Where the Jobs Were Added

Nonresidential job gains in January 2026 were highly concentrated in two of three major subsectors, with specialty trades leading the charge and building construction following close behind.

Nonresidential specialty trade contractors posted the strongest performance, adding 25,100 net new jobs. This surge reflects robust demand for:

• Electricians (particularly for power-intensive facilities)
• Plumbers and pipefitters
• HVAC technicians
• Concrete and masonry workers
• Steel erectors and welders

These numbers align with Labor Department forecasts projecting electrician employment to grow 9.5% from 2024 to 2034 and HVAC technician roles to expand by 8.1%—both well above the economy’s overall 3.1% growth rate.

Nonresidential building employment expanded by 3,600 positions. This category includes commercial, office, institutional, and industrial structures. The steady gains here reflect ongoing project activity in vertical construction, particularly in sectors like manufacturing facilities, health care buildings, and data centers.

Heavy and civil engineering construction slipped by 800 jobs in January. This decline may seem surprising given elevated multi-year funding levels from federal infrastructure programs, but month-to-month volatility is common in this segment. Project completions, seasonal weather impacts, or gaps between bid awards and construction starts can all influence these numbers.

Labor Market Context: Unemployment, Labor Supply and Wage Pressures

Placing nonresidential construction hiring within the broader labor market helps explain why contractors continue to face workforce challenges even as employment grows.

The construction unemployment rate stood at 6.9% in January 2026, according to BLS household survey data. While this is higher than the overall U.S. unemployment rate of 4.3%, it represents an improvement from a year earlier. The unemployment rate fell compared to previous periods, signaling a gradual improvement in labor conditions in the industry. Additionally, the number of people employed part-time for economic reasons decreased by 453,000 to 4.9 million in January 2026, indicating some easing of economic pressures on the workforce.

Yet that 6.9% rate still points to persistent labor supply challenges in skilled trades. Many construction firms report difficulty filling job openings even as more workers re-enter the sector. The reasons are structural:

• An aging workforce with accelerating retirements. Nearly 4 in 10 skilled construction workers are over 45, contributing to a projected labor shortage as they retire. Aging workers are also creating a significant knowledge gap in the construction industry, as nearly 40% of skilled workers are over age 45. Nearly one-fifth of the construction workforce is over 55, posing a challenge for the industry.
• Immigration policy restrictions limiting new entrants
• Competition from other industries for entry-level workers
• Geographic mismatches between available labor and project locations

These supply constraints translate directly into wage and compensation pressures. Employers often pay premiums or offer signing bonuses to secure electricians, mechanical trades professionals, and experienced superintendents. ABC’s data suggests that the industry will need 349,000 net new workers in 2026—down from 439,000 in 2025, but still substantial.

The combination of solid job growth and still-elevated industry unemployment implies both opportunity for workers and continued competition for talent among general contractors and specialty firms alike.

What January’s Nonresidential Job Gains Signal for Contractors in 2026

ABC Chief Economist Anirban Basu characterized January 2026 as a rebound in construction hiring after a nearly flat 2025 in net job creation. The data support his assessment.

The 27,900 nonresidential jobs added suggest that commercial, industrial, and institutional markets entered 2026 with enough momentum to expand payrolls despite economic uncertainty. This is notable given that many economists polled by Wall Street expected slower economic growth to dampen hiring across sectors.

Strong growth in nonresidential specialty trades indicates active backlogs and ongoing demand for field labor on complex projects. Associated General Contractors’ 2026 Outlook showed contractor optimism peaking at:

The modest gain in nonresidential building employment reinforces that owners are still moving forward with vertical construction, even as financing conditions remain tighter than in prior cycles. The central bank’s approach to rate cuts will influence whether this pace accelerates or moderates.

Meanwhile, the small employment decline in heavy and civil engineering could reflect project timing, winter weather, or bidding gaps rather than a fundamental reversal of the infrastructure spending cycle. Multi-year federal government programs remain in place, and previously reported funding allocations continue to flow into the pipeline.

Overall, January’s nonresidential hiring pattern supports cautious optimism among contractors about workload and staffing needs through the first half of 2026.

Drivers of Nonresidential Construction Job Growth in January 2026

January 2026 job gains connect directly to macroeconomic forces, public policy, and project pipelines that ABC and industry observers have tracked throughout the past year.

Infrastructure and manufacturing investment continue to sustain demand for nonresidential construction labor. Multi-year federal and state programs—including funding for transportation, water systems, and energy infrastructure—are moving from planning into execution phases. While heavy and civil engineering saw a slight decline in January, the underlying investment remains strong.

Data center construction stands out as a particularly powerful driver. Construction spending on data centers rose 32% in the first 10 months of 2025 compared to the prior year. With AI investment accelerating among hyperscalers (Meta, Microsoft, Amazon, Google, and Oracle collectively planning $700 billion in capex, up from $400 billion in 2025), demand for workers in this sector shows no signs of slowing.

Strong backlogs reported by many ABC member contractors heading into 2026 translate directly into hiring needs. Specialty trade firms that self-perform large portions of the work are particularly active in adding staff to meet project demands.

Regional concentration matters as well. Metros and states with high levels of:

• Industrial reshoring
• Semiconductor fabrication plants
• Large-scale cloud and AI data center construction
• Healthcare facility expansion

…are experiencing especially pronounced demand for skilled trades.

Relatively stable interest rates and cautious optimism about economic growth have encouraged owners to proceed with planned nonresidential projects rather than delay or cancel them. The concentration of employment gains in specialty trades and nonresidential building underscores how project execution phases—not just planning and design—are currently driving the need for skilled craft labor.

Implications for Workforce Planning, Training and Contractor Confidence

January’s job numbers carry important signals for how contractors should plan staffing, training, and bidding strategies for the rest of 2026.

Competition for skilled trades will remain intense. The 25,100-job surge in nonresidential specialty trades confirms that electricians, mechanical trades workers, and other skilled craft professionals are in high demand. Firms waiting to address workforce gaps may find themselves outbid for talent.

Training investments matter more than ever. Contractors should consider:

• Expanding apprenticeship programs
• Launching upskilling initiatives for current employees
• Partnering with trade schools and community colleges
• Developing internal career pathways for residential care facilities and ambulatory healthcare services projects

These investments build a sustainable pipeline of workers for commercial, industrial, and infrastructure projects over the next five years.

Contractor confidence should remain supported. The broad strength in nonresidential employment, despite a minor setback in heavy and civil engineering, is likely to support confidence indexes and willingness to take on additional work. Four out of five firms report filling difficulties, according to AGC data, but healthy backlogs and productivity gains still enable staff additions.

Target underemployed workers from other sectors. The 6.9% construction unemployment rate creates opportunities to attract workers who may have been displaced by manufacturing-sector slowdowns or other industries. Targeted outreach and training programs can help bring these individuals into high-demand nonresidential roles.

Build flexibility into staffing models. Project timing, permitting, and funding cycles can produce month-to-month volatility even within a generally growing market. Project delays, benchmark revisions to prior data, and shifts in federal employment policy are variables contractors must navigate.

Outlook: How January 2026 Nonresidential Job Growth Could Shape the Rest of the Year

January 2026 serves as an important early benchmark for nonresidential construction labor trends. The data from ABC’s analysis of BLS figures provides a foundation for projecting what comes next.

If nonresidential employment continues to expand at a similar pace, the industry could see meaningful net job growth in 2026, reversing the stagnation of 2025 highlighted by ABC’s annual benchmarking. Every additional $1 billion in construction spending equates to approximately 3,450 new jobs, according to ABC’s model. However, the construction industry is expected to decline by 3.7% in real construction volume in 2026, which may lead to tighter hiring practices.

Heavy and civil engineering employment is likely to firm up later in the year as infrastructure projects awarded in 2024 and 2025 move into full construction phases. The January decline of 800 jobs represents short-term volatility rather than a trend reversal.

Continued project activity in commercial, manufacturing, and data-intensive facilities would keep specialty trade hiring elevated. For workers, this means upward pressure on wages and benefits—the Labor Department projects strong growth for electricians and HVAC technicians, well above the economy-wide average, through 2034. The demand for skilled trades in the construction industry is expected to grow by an average of 5.3% from 2024 to 2034. Education and training in these fields offers a clear pathway to stable employment.

Risks to the outlook include:

• Shifts in interest rates that could slow new project starts
• Changes in public funding or deferred resignation offer programs affecting the federal workforce
• Broader economic slowdown is dampening owner confidence
• Inflation pressures are increasing material and labor costs
• Immigration policy changes further constraining labor supply

ABC’s model suggests worker needs could reach 456,000 in 2027 (up 30.7% from 349,000 in 2026) if investment conditions remain favorable. The construction industry will need to bring in 456,000 new workers in 2027, up 30.7% from the 349,000 needed in 2026.

A notable upcoming date for the industry outlook is February 11, 2026, when a scheduled economic data release is expected to provide further insight into nonresidential construction job growth.

January’s key data points—33,000 total construction jobs added, 27,900 in nonresidential—provide evidence that nonresidential markets are currently the anchor of construction employment heading into the remainder of 2026. Contractors who align workforce strategies with these trends will be best positioned to capture opportunities as the year unfolds.

FAQ

How does January 2026 compare to construction job growth in 2025 overall?

ABC’s benchmarking of BLS data shows 2025 as a relatively weak year for total construction job growth, with industry employment essentially flat compared with 2024. January 2026’s gain of 33,000 construction jobs, including 27,900 in nonresidential, stands in clear contrast to that flat pattern and suggests renewed momentum. This comparison explains why ABC economists view January 2026 as a potential turning point in the hiring cycle, with nonresidential specialty trade contractors adding 95,000 positions since August 2024, contributing to the rebound.

Why did heavy and civil engineering employment decline despite strong infrastructure funding?

Heavy and civil engineering employment can be volatile month to month because infrastructure projects often move in large phases rather than steady increments. The 800-job decline in January 2026 may reflect project completions, seasonal weather impacts, or delays in new bid awards rather than a loss of underlying funding. Many infrastructure programs are multi-year commitments, so hiring in this segment fluctuates around an upward trend rather than moving in a straight line. Expect this category to recover as projects awarded in 2024 and 2025 reach peak construction activity.

What does the 6.9% construction unemployment rate mean for job seekers?

A 6.9% construction unemployment rate is higher than the overall 4.3% U.S. rate but lower than the construction levels seen in prior slowdowns. This creates opportunities for experienced tradespeople and new entrants, as many contractors still report open positions even with more workers available. Job seekers with or pursuing skills in nonresidential specialty trades—such as electrical, mechanical, concrete, and steel work—are especially well positioned given January’s hiring patterns and the industry’s projected need for 349,000 net new workers in 2026.

Are nonresidential construction job gains being driven by AI and data center projects?

While ABC’s January 2026 release does not isolate AI-related projects specifically, broader market coverage indicates that data centers and digital infrastructure are a significant source of nonresidential demand. Construction spending on data centers rose 32% in the first 10 months of 2025, and hyperscaler capex from major technology companies is expected to reach $700 billion. These projects require large numbers of specialty trade workers, which aligns with the strong 25,100-job gain in nonresidential specialty contractors. Artificial intelligence infrastructure is emerging as a multi-year driver of skilled trades employment.

What should contractors watch for in upcoming jobs reports?

Contractors should track monthly changes in nonresidential specialty trade, nonresidential building, and heavy and civil engineering employment to gauge segment-specific momentum. Monitoring both the construction unemployment rate and total job gains reported by ABC helps understand how tight the labor market is becoming in specific regions. Firms should pair national data with their own backlog trends and bid opportunities to refine staffing plans, wage strategies, and training investments for the rest of 2026. The highest level of attention should go to specialty trade categories, given their outsized role in January’s employment rise.