4 Major Challenges Facing the Construction Industry in 2026

In accordance with the 2025 AGC of America and NCCER Workforce Survey, 92% of development companies reported having a tough time filling open positions. Labor shortages result in undertaking delays, cited by 45% of companies as the rationale a minimum of one undertaking was held up previously 12 months greater than every other issue, together with materials lead occasions or allowing points.

This is why it is occurring:

• An ageing workforce: Skilled staff are approaching retirement age sooner than youthful staff are getting into the trades.
• A expertise hole: 57% of contractors say out there candidates lack the abilities, licenses, or credentials wanted for open positions.
• Immigration enforcement: 28% of companies reported being straight or not directly impacted by immigration enforcement actions in 2025.

Many companies try to handle these points by elevating wages. 95% of the companies in AGC’s Workforce Survey elevated base pay charges over the previous 12 months, and the typical development wage now sits at $39.69 per hour. That is 8.9% above the typical personal sector wage, however increased pay alone will not shut a spot that is structural in nature.

For extra data on the development trade labor scarcity, and to discover ways to hold your small business rising by way of it, try our free Labor eBook.

The development trade’s productiveness document hasn’t improved considerably within the final couple a long time. In accordance with McKinsey’s analysis, development productiveness grew simply 0.4% yearly between 2000 and 2022 in comparison with 2% for the broader economic system and three% for manufacturing over the identical interval.

The results are important. McKinsey estimates that if present productiveness tendencies proceed, international development output may fall in need of demand by $40 trillion cumulatively by 2040.

The basis causes are nicely understood:

Building strategies like design-build and built-in undertaking supply (IPD), which require tighter collaboration between house owners, designers, and contractors from the beginning, have been proven to enhance outcomes. So has know-how, when adopted deliberately. AI tools specifically are starting to indicate actual promise for decreasing the guide work and data gaps that drive a lot of the trade’s productiveness loss.

Employee security stays one of the vital severe issues within the trade. In accordance with the Bureau of Labor Statistics, development and extraction staff skilled 1,032 fatalities in 2024, which is among the many highest fatality charges of any U.S. trade sector.

The prices of a severe incident lengthen past the human tragedy: misplaced productiveness, OSHA investigations, and lasting injury to a agency’s status and skill to draw staff.

Ongoing coaching, hazard identification, and constant enforcement of secure work practices stay non-negotiable. Corporations with sturdy security applications additionally are typically extra productive as a result of security and efficiency aren’t at odds.

In accordance with RICS’s 2025 AI in Construction report, roughly 45% of development organizations haven’t any AI implementation, and just one.5% are utilizing AI throughout a number of enterprise processes. Value, integration complexity, and information high quality all gradual adoption down, however the window to get forward continues to be open.

For estimators and preconstruction groups, Takeoff Boost, out there in ConstructConnect®’s On-Screen Takeoff® and PlanSwift®, makes use of AI to automate amount takeoff straight from development drawings. Work that when took hours may be accomplished in a fraction of the time, with fewer errors and extra consistency throughout bids.

On the undertaking discovery facet, ConstructConnect® Project Intelligence surfaces related initiatives earlier within the preconstruction cycle, with AI doc search that permits you to pull the data you want in seconds.

These are the sorts of positive factors the trade wants. Particular, measurable, and out there now. Schedule a demo today and see how ConstructConnect’s AI-powered instruments work in follow.

Labor shortages are the trade’s most urgent problem. In accordance with the 2025 AGC and NCCER Workforce Survey, 92% of development companies report issue filling open positions, and 45% say shortages triggered delays on a minimum of one undertaking previously 12 months. The causes are structural: an ageing workforce, a expertise hole, and ongoing workforce pipeline challenges.

Building productiveness has grown simply 0.4% yearly over the previous twenty years, in comparison with 2% for the broader economic system, based on McKinsey. The causes embrace poor planning, fragmentation throughout trades, low know-how adoption, and a project-by-project tradition that makes it onerous to hold enhancements from one job to the following.

Building is among the most hazardous industries in the US. In 2024, development and extraction staff skilled 1,032 fatalities, based on the Bureau of Labor Statistics, which is among the many highest fatality charges of any personal sector trade.

Companies are elevating wages, with the average construction wage now $39.69 per hour, and partnering with colleges and commerce applications to construct a longer-term pipeline. Many are additionally investing in know-how to enhance productiveness, so present workforces can accomplish extra on every undertaking.

Most companies are nonetheless within the early levels. In accordance with RICS’s 2025 report, 45% of development organizations haven’t any AI implementation in any respect. Funding intentions are rising, and analysts describe the sector as approaching a tipping level, however most companies have but to maneuver previous consciousness into precise implementation.