Nonresidential Construction Adds Healthy 15,700 Jobs in May |
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| The construction industry added 17,000 jobs on net in May, according to an Associated Builders and Contractors analysis of data released by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 68,000 jobs, up 0.8%.
Nonresidential construction employment increased by 15,700 positions, with gains in all three subcategories. Nonresidential specialty trades added the most jobs, increasing by 11,400 positions. Heavy and civil engineering and nonresidential building added 2,600 and 1,700 jobs, respectively, in May. The construction unemployment rate was 4.1% in May. Unemployment across all industries remained unchanged at 4.3% and is also unchanged from a year ago. “The construction industry posted healthy job gains in May, especially within the nonresidential segment,” said ABC Chief Economist Anirban Basu. “The industry’s recent job growth, driven by insatiable demand for data centers and ongoing growth in publicly funded construction activity, appears set to continue over the coming months. Contractors also remain broadly optimistic about growing their staffing levels over the next six months, according to ABC’s Construction Confidence Index. “The bigger story in the May jobs report, however, is the surprising strength of the broader labor market,” said Basu. “Economywide job growth has accelerated, rising to a pace not seen since the early months of 2024, and the unemployment rate held steady at a perfectly acceptable 4.3% in May. This is an indication of broader economic resilience, albeit one that is not necessarily encouraging for the construction industry.
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“The combination of a stable labor market and resurgent inflation suggests that rate hikes are now more likely than rate cuts over the next several quarters, and high borrowing costs and tight lending standards will continue to weigh on construction activity during the months ahead,” said Basu.
Construction Materials Prices Surge 2.6% in May, Up Nearly 10% Year Over Year |
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| Construction input prices increased 2.6% in May compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released on June 11. Nonresidential construction input prices increased 2.4% for the month.
Overall construction materials prices are 9.6% higher than one year ago, while nonresidential construction input prices are 9.7% higher. Prices increased in 2 of the 3 energy subcategories last month. Crude petroleum prices increased 11.8% and unprocessed energy materials increased 6.9%. Natural gas prices were down 18.2% in May.
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“Construction input prices surged again in May and are now up nearly 10% year over year,” said ABC Chief Economist Anirban Basu. “Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper. Contractors remain optimistic that their profit margins will expand over the next six months, according toABC’s Construction Backlog Surges in May, Contractor Confidence Slips
Associated Builders and Contractors reported today that its Construction Backlog Indicator rose to 9.1 months in May, according to an ABC member survey conducted May 20 to June 3. The reading is up 0.3 months from April and 0.7 months from May 2025.
View ABC’s Construction Backlog Indicator and Construction Confidence Index for May. View the full Construction Backlog Indicator and Construction Confidence Index data series.
Backlog for the month increased in every region except for the South. Despite the monthly movement, the South remains the region with the longest backlog and the largest year-over-year increase in backlog.
ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels fell in May. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.
“Backlog rose to a nearly three-year high in May,” said ABC Chief Economist Anirban Basu. “This increase largely reflects the massive data center investments taking place across the nation, as the 14% of ABC members under contract to work on data centers continue to have much higher backlog (11.6 months) than those that are not (8.6 months). The way this boom is disproportionately benefiting larger contractors helps to explain why contractor confidence slipped in May even as backlog continued to climb.”
DODGE CONSTRUCTION
Construction Starts Swell 34% in May
Total construction starts improved 34.1% in May to a seasonally adjusted annual rate of $1.78 trillion, according to Dodge Construction Network. Nonresidential building starts grew by 17.8%, nonbuilding starts increased 91.9%, and residential starts fell 2.1% over the month. On a year-to-date basis, total construction starts were up 12.7% through May. Nonresidential starts were up 12.3%, nonbuilding starts improved by 32.9%, and residential starts were down 4.9% over the same period. For the 12 months ending May 2026, total construction starts were up 12.5% from the 12 months ending May 2025. Residential starts were down 4.6%, nonresidential starts were up 11.7% and nonbuilding was up 33.2%.
“Megaproject starts within healthcare, manufacturing, utilities and data centers drove sizeable gains across the month,” stated Sarah Martin, Director of Economic Research at Dodge Construction Network. “Outside of this activity, however, pockets of weakness across institutional construction, warehouses and residential construction remain.”
Nonresidential
Nonresidential building starts improved 17.8% in May to a seasonally adjusted annual rate of $647 billion. Commercial starts were up 0.8% over the month, driven by the 20.2% m/m increase in offices and data centers, while all sectors experienced declines; parking garages (-53.6% m/m), hotels (-36.8% m/m), warehouses (-17.0% m/m), and stores (-6.2% m/m). Institutional starts gained 17.4% over the month, supported by the 138.8% m/m surge in healthcare construction and offset by the -15.1% m/m decline in education starts. Manufacturing construction rebounded 116.1% m/m in May, alongside the start of the $5 billion Rivian Electric Vehicle Plant. On a year-to-date basis through May, nonresidential starts are up 12.3%. Commercial and industrial construction gained 32.9%, while institutional starts are down 8.8% over the same period.
For the 12 months ending May 2026, total nonresidential starts were up 11.7% compared to the 12 months ending May 2025. Commercial starts were up 26.6%, institutional starts decreased 4.1%, and manufacturing starts were up 32.4% over the same period.
The largest nonresidential building projects to break ground in May were the $5 billion Rivian Electric Vehicle Plant in Social Circle, Georgia, the $3.0 billion Nebius Data Center (Buildings 1 & 2) in Birmingham, Alabama and the $2.8 billion World Trade Center Commercial Tower in New York, New York.
Nonbuilding
Nonbuilding construction starts surged 91.9% in May to a seasonally adjusted annual rate of $758 billion. Triple digit gains in highways and bridge starts (+111.3% m/m) and utilities construction (+195.6% m/m) drove gains, while environmental public works (-18.3% m/m) and miscellaneous nonbuilding (-13.1% m/m) slowed down. On a year-to-date basis through May, nonbuilding construction was up 32.9% alongside the 125.9% year-to-date growth in electric power/utilities and 12.1% growth in highways and bridges. The remaining sectors, however, are seeing declines. Environmental public works are down 5.5% year-to-date, and miscellaneous nonbuilding starts are down 12.1% over the same period.
For the 12 months ending May 2026, total nonbuilding starts were up 33.2%. Environmental public works fell by 2.5% compared to the 12 months ending May 2025. Highway and bridge starts were up 9.5%, miscellaneous nonbuilding starts were up 23.8% and utility/gas starts increased 121.6% over the same period.
The largest nonbuilding projects to break ground in May included the $13.5 billion LNG Export Facility in Hackberry, Louisiana, the $4.2 billion SR 400 Express Toll Lanes (Phase 3) project in Sandy Springs, Georgia and the $4.1 billion Brent Spence Bridge (Corridor #116649) project in Convington, Ohio.
Residential
Residential building starts fell by 2.1% in May to a seasonally adjusted annual rate of $373 billion. Single family starts fell 1.0% m/m, and multifamily starts fell 3.7% m/m. On a year-to-date basis, residential starts are down 4.9%, with single family starts down 9.4% and multifamily starts up 3.6%.
For the 12 months ending May 2026, total residential starts fell 4.6%. Single family starts fell 13.5% compared to the 12 months ending May 2025, and multifamily starts increased 12.7% over the same period.
The largest multifamily structures to break ground in May were the $867 million 111 Wall Street Residential Conversion in New York, New York, the $633 million River’s Edge Continuing Care Retirement Community (Phase 1) in Bronx, New York and the $271 million Cherry Lane Residential Tower (Phase 1) in Denver, Colorado.
Regionally, total construction starts in May rose in every region except the Midwest; the Northeast (+33.5% m/m), the South Atlantic (+36.5% m/m), the South Central (+87.6% m/m), and the West (+24.4% m/m). The Midwest declined by 8.4% between April and May.
