Construction Labor Shortages: A Growing Concern Amidst Immigration Policy Changes and Underinvestment in Education

The construction industry is facing a significant challenge as labor market conditions tighten, exacerbated by changes in immigration policy and continued underinvestments in career and technical education. Despite a recent increase in construction employment, the industry's ability to maintain this growth is uncertain, as firms struggle to find workers to fill open positions.

In January 2025, construction employment increased by 4,000 positions, with gains in nonresidential construction offsetting the decline in the residential sector. However, industry experts caution that the already tight labor market is becoming even more competitive, making it difficult for firms to keep pace with demand. The chief executive officer of the Associated General Contractors of America, Jeffrey Shoaf, warns that without new investments in construction training and work authorization programs, the industry may struggle to meet future hiring needs.

The construction industry is not alone in facing labor shortages. A separate government report showed that there were 217,000 job openings in construction at the end of December 2024, a 50% year-over-year decline. This sharp decrease in openings suggests a turning point, potentially driven by hiring difficulties, a cooling labor market, or growing uncertainty about impending policy changes.

One of the key factors contributing to the labor shortage in the construction industry is the tightening immigration policy. The introduction of the points-based immigration system after Brexit has significantly reduced the flow of EU workers to the UK construction industry. This system categorizes many essential construction roles as "low-skilled," making them ineligible for work visas. Since 2020, the number of EU workers in the UK construction industry has declined by nearly 40%, resulting in project delays and increasing costs.



Another factor is the aging domestic workforce and insufficient numbers of young people entering the trade. The construction industry is facing an aging workforce, with many skilled workers approaching retirement. Additionally, there is a lack of interest from younger generations in pursuing careers in construction, leading to a skills gap and insufficient numbers of young people entering the trade. This aging workforce, combined with a lack of new talent entering the industry, will lead to a significant labor shortage in the coming years.

The education system's focus on exams rather than practical skills has also contributed to the lack of interest from young people in pursuing careers in construction. Many youngsters leave school without knowing what they want to do, making it difficult for the industry to attract new talent.

To address these challenges, the construction industry must invest in career and technical education, promote the benefits of construction careers, and lobby for immigration reform. By expanding the Shortage Occupation List to include more construction roles and introducing a sector-specific visa for the construction industry, the government can help alleviate the shortage of workers and allow the sector to meet its growing demands.

In conclusion, the tightening labor market conditions in the construction sector, driven by changes in immigration policy and continued underinvestments in career and technical education, pose a significant threat to employment growth in the industry. To overcome these challenges, the construction industry must work together with the government and educational institutions to invest in education, promote construction careers, and advocate for immigration reform.