U.S. and California Construction Employment Cumulative change, Feb. 2020-Oct. 2025, seasonally adjusted


10%


-10% -5% 0% 5%


-15% 15% 2/20 2/20 8/20 8/20 2/21 2/21 8/21 8/21 2/22 2/22 8/22 8/22 2/23 2/23 8/23 8/23 2/24 2/24 8/24 8/24 2/25 2/25 8/2 2 25 US


CA % change


Feb. 2020- Aug. 2025:


US


Aug. 2024- Aug. 2025:


9.0% 0.7% CA -1.8% -1.9%


Source: Bureau of Laborf


Statistics, www.bls.gov/sa


©2025 The Associated General Contractors of America,f


Inc.


Construction Workforce Still a Challenge


Te decline in employment highlights one of the biggest structural challenges California faces: rebuilding and sustaining its construction workforce. To address this issue, the state has taken steps to strength- en its training pipeline, including a new apprenticeship grant signed by Governor Newsom on October 20, 2025, to expand support for 88 apprenticeship programs through the Employment Training Panel. These programs are critical, espe- cially given retirements. Both an aging workforce and high living costs continue to make labor availability a persistent concern, which is likely to impact the industry in 2026. Te federal government’s stance on immigration enforcement poses an addi-


tional challenge. Te construction trades rely heavily on immigrant labor. In fact, 34% of U.S. construction trade workers are foreign born. Tis figure is even high- er for California (52%), which has the largest share of foreign-born workers in construction of any state. Market indicators paint a similar mixed picture as the one seen by em- ployment data. Tere is momentum in certain construction segments, but not universal strength.


Residential Market Still Sluggish According to a September 2025 JM


Construction report, California’s building permit activity hit a low point for the year. While California has spearheaded several initiatives aimed at housing reform, the residential market remains sluggish.


Te risk of entering the multifamily


market and coming up against large capital costs, labor and prevailing wage requirements, and other challenges is outweighing the opportunity presented by California’s unmet housing demand. The lack of willingness to take on


investments in a risky environment is impacting the nonresidential construc- tion industry, as well. Capital to build exists, but a lack of confidence regarding project timelines and occupancy rates makes some investors hesitant to take the leap and build. Nevertheless, according to data firm


ConstructConnect, nonresidential starts in California were up 15.9% year to date through October 2025 compared with the same period a year earlier. Tis out- paced the national rate of 11.7%. Large


CALIFORNIA CONSTRUCTOR JANUARY/FEBRUARY 2026


21


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