Construction Employment: Texas and New Mexico Lead Gains, California and Washington Face Losses

The construction industry in the United States has seen a mixed bag of employment trends over the past year, with some states experiencing significant job gains while others face substantial losses. According to a recent analysis by the Associated General Contractors of America, construction employment increased in 33 states and the District of Columbia from May 2024 to May 2025, while 27 states added construction jobs between April and May. However, the industry remains in a holding pattern due to uncertainty over federal labor, tax, and trade policies.

12-Month Employment Trends

Over the past 12 months, Texas and New Mexico have emerged as the leaders in construction job gains. Texas added the most construction employees, with 28,600 new jobs, representing a 3.4% increase. New Mexico followed closely with 9,100 new jobs, a staggering 17.2% increase, the highest percentage gain in the country. Other states with significant job gains include Ohio, Michigan, Florida, and Idaho, each experiencing double-digit percentage increases in construction employment.

On the other end of the spectrum, California and Washington faced the most significant job losses. California lost 13,800 construction jobs, a 1.5% decrease, while Washington saw a 5.0% decline with 11,200 jobs lost. New York, New Jersey, and Massachusetts also experienced notable job losses, with New Jersey and Massachusetts seeing percentage declines of 2.8% and 2.3%, respectively.

Monthly Employment Trends

For the month of May, Michigan and Montana led the way in construction job gains. Michigan added 4,300 jobs, a 2.1% increase, while Montana saw a 3.9% increase with 1,400 new jobs. Texas and New Mexico also continued their upward trends, adding 2,200 and 1,600 jobs, respectively. Alaska and Idaho rounded out the top gainers, each experiencing percentage increases of 3.8% and 1.7%, respectively.

Conversely, Virginia and California experienced the largest declines in construction jobs from April to May. Virginia lost 1,900 jobs, a 0.8% decrease, while California saw a 0.2% decline with 1,900 jobs lost. Oregon, Georgia, and Minnesota also faced significant job losses, with Oregon experiencing the highest percentage decline at 1.5%.

Underlying Factors

The varying employment trends across states can be attributed to several underlying factors. In Texas and New Mexico, large-scale investments in infrastructure and manufacturing have fueled steady job growth. The expedited approval of major infrastructure projects, such as the Texas-Louisiana Hydrogen Pipeline, has created a surge in construction activity. Additionally, deregulation efforts in the Sun Belt region have accelerated project timelines, leading to a significant increase in housing starts.

In contrast, California and Washington have faced challenges due to stricter environmental regulations and higher labor costs. The requirement for supplemental environmental reviews in these states has slowed down project timelines and increased costs, contributing to job losses. Furthermore, the Biden administration's proposal to mandate Project Labor Agreements (PLAs) on federal construction projects exceeding $35 million has raised concerns about increased costs and reduced competition, potentially impacting job growth in these states.



Industry Outlook

Association officials have urged Congress and the administration to provide more certainty regarding taxes, tariffs, and labor policy. Ken Simonson, the association’s chief economist, noted that the industry has been in a holding pattern due to uncertainty over federal policies. Jeffrey Shoaf, the association’s chief executive officer, emphasized the need for swift resolution of trade disputes and clarification of immigration enforcement actions to encourage developers to start delayed projects.

In conclusion, while some states like Texas and New Mexico have seen significant construction job gains, others like California and Washington face substantial losses. The industry's future will depend on the resolution of policy uncertainties and the ability of states to adapt to changing economic and regulatory conditions.