There has been a significant increase in wages in the construction industry in the last few years. Recent data shows that the construction industry saw a huge pay bump in 2021 and into the new year. Here’s what that means for construction employers.

A Closer Look at the Numbers

Simply saying that there was a huge pay bump in the construction industry in recent years does not do the increases justice. Construction worker pay grew at the fastest rate in 40 years as builders are desperate to keep up with the construction boom.

Research from ADP found an increase in construction wages of 6.1 percent in December 2021. This was specifically for workers who maintained their current jobs. There was also an increase in wages for new hires of 4.7 percent.

For reference, the same report indicates an employment growth rate of 4.5 percent in the construction industry. There was also a 5.1 percent turnover rate. As such, a fair percentage of construction workers qualified as new hires with this lower pay bump.

Labor Shortage and High Demand Are the Culprits 

The rise in wages in the construction industry is no surprise, given the state the industry is in. For years, experts have warned about a labor shortage, and it has recently become a serious issue.

The U.S. Bipartisan Infrastructure Law has significantly increased the demand. That law brings in new investments in infrastructure of $550 billion in the next decade. This could potentially create 3.2 million new construction jobs in the nonresidential sector alone. To put that into perspective, that would increase the nonresidential construction workforce by 30 percent. This also translates into yearly growth of 300,000 to 600,000 new workers.

The Labor Shortage Means These Jobs May Go Unfilled

Unfortunately, there is already a labor shortage in construction at the moment. If left unaddressed, it goes without saying that construction companies may not be able to meet the higher demands to fill these roles in the future.

Causes of the Labor Shortage in Construction 

To better understand the wage bump and high demand for construction workers, it helps to look into what caused this labor shortage in the first place. There are numerous factors at play, such as the following:

  • Construction slowed after the housing crash and recession
  • Many people left construction during the Great Recession and haven’t returned
  • Career and technical education is undervalued and underfunded
  • Remaining workers are getting closer to retirement
  • Changes in the H-2B program mean fewer foreign construction workers


If you want to hire and retain skilled workers, you need to offer competitive wages. In addition to competitive salaries, companies should also look into other hiring strategies, such as recruiters and manpower services, to give them an edge over competitors and attract more construction talent.

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This is an exciting time in the world of construction. With this rapid turnaround over the past few years, many construction general contractors are being forced to reevaluate their construction salaries to stay competitive. We have compiled data from 4600+ individual construction management interviews performed by our staff.

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