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Construction input prices increased 0.5% in March, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices increased 0.6% for the month.

Both overall and nonresidential construction input prices are 0.8% higher than one year ago. While crude petroleum prices fell considerably in March, that decline was more than offset by rapidly rising natural gas, steel, copper and lumber prices.

“Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7% annualized rate through the first quarter of 2025,” said ABC Chief Economist Anirban Basu. “The emerging effects of tariffs are glaring in the March data release, with iron and steel, steel mill products and copper wire and cable prices all rising more than 5% for the month. While contractors remain busy for the time being, according to ABC’s Construction Backlog Indicator, this pace of input price escalation, coupled with rising uncertainty, will cause projects to be delayed and canceled if it persists for any meaningful length of time.”

The construction industry added 13,000 jobs on net in March, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has risen by a mere 143,000 jobs, an increase of 1.8%. 

Nonresidential construction employment increased by 22,300 positions on net in March, with growth in 2 of the 3 subsegments. Nonresidential specialty trade added the most jobs, with a monthly increase of 19,300 positions, while heavy and civil engineering added 3,400 jobs. The nonresidential building subsegment lost 400 positions.

The construction unemployment rate decreased to 5.4% in March and is unchanged from one year ago. Unemployment across all industries rose from 4.1% in February to 4.2% last month.

“At first glance, this is a perfectly fine jobs report for the construction industry,” said ABC Chief Economist Anirban Basu. “The details, however, give cause for concern. With downward revisions to the January and February numbers, the industry added just 8,000 jobs per month during the first quarter of 2025. Construction employment is up just 1.8% since March 2024, the slowest year-over-year growth in four years.

“March’s labor market data is a lesser concern in light of the sweeping tariffs announced on April 2,” said Basu. “What amounts to the largest tax hike since 1968 will reduce construction activity due to rising input costs, shaken business confidence and potentially higher-for-longer interest rates. While contractors were sanguine about the outlook as of last month, according to ABC’s Construction Confidence Index, industry expectations are likely to worsen in the coming months.”

By Luiza Mills, Interstate Electrical Services Corporation

Associated Builders and Contractors of Massachusetts has enjoyed a good relationship with Governor Maura Healey. So we were taken aback last month when, at the Massachusetts Building Trades Convention, the Governor announced an executive order calling on state agencies to conduct an analysis “to determine whether using a PLA [project labor agreement] is in the best interest of the Commonwealth or agency” for all projects valued at $35 million and above.

Since that time, state trade unions have been claiming PLAs don’t require union labor.  However, the language included in Massachusetts PLAs is clear: “The Contractor recognizes the union as the sole and exclusive bargaining representative of all craft employees working within the scope of this agreement.”

That means they exclude the 83.4 percent of Massachusetts construction workers who choose not to join a union, according to U.S. Bureau of Labor Statistics data analyzed by unionstats.com.

The work of ABC member employees is reviewed through the same Division of Capital Asset Management and Maintenance certification and local prequalification processes as that of union workers.  ABC member craftspeople in licensed trades pass the same state licensing exams.  The record also shows that member contractors and other open-shop firms routinely work alongside their union counterparts in harmony and without incident on projects valued at $35 million and over. 

The impact of excluding over 80 percent of the workforce is simple – less competition.  That translates to fewer bidders and higher costs.  This was reflected at the West Parish Water Treatment Plant.  The Springfield Water and Sewer Commission first bid the project under a PLA.  But when it was re-bid after a Springfield Superior Court Judge enjoined the PLA, the electrical bid alone saved $15.5 million.

Perhaps Judge Michael Callan’s ruling in that case summarized it best: “The decision concludes: “Finally, the public interest is manifest.  The public benefits from an open, fair, competitive and robust bidding process.  The PLA requirement unnecessarily curtails this without legal justification.” 

ABC has met with Governor Healey to express concerns over what PLAs mean for our members and the Commonwealth.  ABC will increase our advocacy for fair and open bidding and pursue continued options to combat PLAs.  We do this knowing that, beyond supporting our members, it reinforces fair competitive opportunities.

The construction industry had 264,000 job openings on the last day of February, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting.

Industry job openings increased by 22,000 last month but are down by 165,000 from the same time last year.

“Construction industry hiring continued to pick up in February, accelerating to the fastest rate since the first half of 2024,” said ABC Chief Economist Anirban Basu. “However, industrywide job openings remain subdued compared to this time last year. Still, there are signs that construction workers retain outsized leverage compared to their employers. Contractors remain reluctant to lay off workers, while construction workers quit their jobs at the fastest pace since last May.

“With contractors optimistic about expanding their staffing levels over the next six months, according to ABC’s Construction Confidence Index, the pace of hiring should continue to accelerate through the middle of 2025.”

National nonresidential construction spending increased 0.3% in February, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.255 trillion.

Spending was up on a monthly basis in 9 of the 16 nonresidential subcategories. Private nonresidential spending increased 0.4%, while public nonresidential construction spending was up 0.2% in February.

“Nonresidential spending rebounded in February, rising to the highest level on record,” said ABC Chief Economist Anirban Basu. “A surge in highway and street spending accounted for more than 40% of the monthly increase, and public sector nonresidential spending is now up more than 6% on a year-over-year basis. Unfortunately, private sector spending has not kept pace and is up just 2.5% since last February, a rate of increase slower than economywide inflation.

“The mix of high interest rates, tight lending standards and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months,” said Basu. “Despite these ongoing headwinds and the expectation that materials prices will rise as tariffs are implemented, contractors remain optimistic about their prospects over the next six months, according to ABC’s Construction Confidence Index.”

ABC MA representatives met last week with Governor Maura Healey about her recent Executive Order on PLAs. 

At the meeting, which took place on Thursday, March 20 in the Governor’s Office at the State House, ABC leaders emphasized the negative impact of PLAs on the 83.4 percent of the MA construction workforce that is not unionized and their cost increases for the Commonwealth. 

Governor Healey said the Executive Order does not mean there will be fundamental change to public construction in Massachusetts.  She added she wants and needs ABC members to continue to participate in state projects. 

Governor Healey emphasized that her order, unlike the PLA order issued by President Biden, does not mandate PLAs.  She the types of projects where PLAs may be used would be those that are unique, such as the Big Dig. 

The representatives asked the Governor to include ABC MA in her administration’s discussions on PLAs.  Gov. Healey said she considered the meeting to be the first of ongoing conversations. 

ABC leaders attending the meeting included chair Luiza Mills, First Vice Chair D’Von Myles and Past Chairs John Anderson and John Cruz.  Also attending were ABC members who perform significant public construction work. 

The meeting with Governor Healey was followed by a special meeting of the ABC MA Board of Directors on 3/31/24.  The Board discussed ABC plans and allocated dedicated funding that can be used in our communications/PR, legal and legislative efforts on PLAs. 

“We are on the right side of this issue and our Board is united in supporting ABC’s efforts to combat costly and discriminatory PLA,” said ABC MA President Greg Beeman. 

Associated Builders and Contractors reported that its Construction Backlog Indicator fell to 8.3 months in February, according to an ABC member survey conducted Feb. 20 to March 5. The reading is up 0.2 months since February 2024.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog fell on a monthly basis for contractors with less than $100 million in annual revenues while increasing sharply for contractors with greater than $100 million in annual revenue. Those largest contractors have also accounted for the majority of the increase in backlog observed over the past year.

ABC’s Construction Confidence Index reading for staffing improved, while the reading for profit margins declined. The reading for sales was unchanged after rounding. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“While many other economic sentiment readings have deteriorated in recent months, contractors remain optimistic that business conditions will improve through the first half of 2025,” said ABC Chief Economist Anirban Basu. “Nearly 60% of contractors intend to increase their staffing levels over the next six months, the highest share in over two years. These hiring expectations suggest that the recent slowdown in industrywide employment is largely confined to the residential segment. Yes, there are some broader signs of emerging economic weakness, but the results of this ABC member survey suggests that contractors will remain busy over the next few quarters.”

The construction industry added 19,000 jobs on net in February, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has increased by 174,000 jobs, an increase of 2.1%. 

Nonresidential construction employment increased by 6,200 positions on net, with growth in all three subcategories. Heavy and civil engineering added the most jobs, increasing by 2,500 positions, followed by nonresidential specialty trade, which added 2,000 jobs. Nonresidential building added 1,700 jobs last month.

The construction unemployment rate rose to 7.2% in February. Unemployment across all industries increased from 4.0% in January to 4.1% last month.

“The February jobs report suggests that contractors’ ongoing optimism, as seen in ABC’s Construction Confidence Index, is justified,” said ABC Chief Economist Anirban Basu. “The industry added 19,000 jobs in February, making it the strongest month of growth since the third quarter of 2024, and the sizable jump in the industry unemployment rate indicates that the labor supply can accommodate ongoing hiring. 

“Economywide job growth was also perfectly decent, with U.S. employers adding 151,000 jobs last month. Following several weeks of concerning economic data and rising economic uncertainty, a good-but-boring jobs report is a welcome development,” said Basu. "Federal government employment declined by 10,000 and will likely fall further in the coming months, but that segment is just 2% of overall employment. Federal job and spending cuts, as well as elevated uncertainty, could eventually diminish construction activity at the margins, but those effects have yet to appear in these employment data.”

The construction industry had 236,000 job openings on the last day of January, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey data. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 31,000 in January but are down by 171,000 from the same time last year.

“While construction job openings remained subdued in January, industrywide labor force churn increased meaningfully,” said ABC Chief Economist Anirban Basu. “Both hires and separations—including layoffs, discharges and quits—accelerated to the fastest rate since the first half of 2024. Yes, recent construction spending data and investor caution in the face of volatile trade policy represent a cause for concern, but nearly 6 in 10 contractors expect their staffing levels to grow over the next several months, according to ABC’s Construction Confidence Index. That, along with healthy industrywide job growth in February, suggests job openings should continue to trend higher in the coming months.”

Associated Builders and Contractors has released an analysis of 2024 state union membership data published by unionstats.com, which found that in 41 states at least 80% of workers in the private construction industry did not belong to a union.

Massachusetts was among those states, with 80.4% percent of the construction workforce choosing not to join a union in 2024.

At least 90% of workers in the private construction industry did not belong to a union in 29 states in 2024 and 2023, up from 26 states in 2022 and 24 states in 2021. Nationwide, the U.S. Bureau of Labor Statistics reports that 7,978,000 construction industry workers were not members of a union in 2024, a 12,000-person increase from 7,966,000 workers in 2023. Overall, union membership decreased by 38,000 to 916,000. 

“More and more construction workers work for nonunion employers, defying four years of new union-friendly policy schemes advanced by the self-declared most pro-union president in history,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “In contrast, commonsense policies providing opportunities for all of America’s construction workforce are rooted in the ideals of merit and worker choice, which help taxpayers get the best possible infrastructure products at the best possible price.”

A record-high 89.7% of construction workers nationwide are not part of a union, according to the U.S. Bureau of Labor Statistics, up from 89.3% in 2023.

“Workers’ choice to affiliate with unions independent of government interference creates immense value in the marketplace, which is why ABC will continue to oppose government-mandated project labor agreement policies and advocate for all construction workers to choose how to achieve their career dreams and prosper in a safe and healthy environment,” said Brubeck. “ABC urges the Trump administration and the 119th Congress to advance policies that prioritize fair and open competition, preserve worker choice and address the issues that the construction industry faces, including a skilled labor shortage of 439,000 in 2025 alone, widespread regulatory burdens, inflation, high interest rates, expiring tax provisions and other economic challenges.”