US & CA Construction Employment Cumulative change, Feb. 2020-Oct. 2024, seasonally adjusted


10%


-20% -15% -10% -5% 0% 5%


2/20 6/20 10/20 2/21 6/21 10/21 2/22 6/22 10/22 2/23 US S CA A


 


US CA


S 9.1% 


 


2.8% A 1.7% -0.2% 6/23 10/23 2/24 6/24 10/24


California Metro Construction Employment Oct. 2023-Oct. 2024, not seasonally adjusted


 California


San Diego-Carlsbad


Los Angeles-Long Beach-Glendale Metro Division Anaheim-Santa Ana-Irvine Div. Oakland-Hayward-Berkeley Div. Riverside-San Bernardino-Ontario Sacramento--Roseville--Arden-Arcade San Jose-Sunnyvale-Santa Clara


San Francisco-Redwood City-South San Francisco Div. Source: BLS


 924,200


75,100 77,400 39,200


154,100 51,900 93,700 0


0 0 0 0 0 0


118,000 106,600


0         


 


 


 





 


Bright Spots for California Despite these clouds, there are bright spots for California contractors. Con- struction data provider ConstructConnect reported on November 22, 2024 that the value of nonresidential starts jumped 14% in the first 10 months of 2024 compared to January-October 2023. “Such growth has been made possible


and forced emigration (deportation) may cause California’s population to decrease more steeply again in 2025. Tat would carry several negative consequences for the state’s construction sector. A decline in population undercuts the


demand for numerous types of structures, reduces state and local revenues that fund public projects, and lowers the number of potential construction employees. Restrictive policies toward foreign-born workers will likely impose an outsized burden in California. An analysis by the National Association of Home Builders of the Census Bureau’s latest Ameri- can Community Survey found 40% of construction trades workers in 2022 in California were immigrants, compared to 31% nationally.


Te prospect of higher tariffs poses an


additional double threat to construction, and especially in California. The first impact, which would be felt nationwide, would occur as increased tariffs would drive up the cost of many materials, whether sourced from outside the United States or from domestic producers. Tose producers may match increases passed on by foreign competitors or may face higher costs from imported components incorporated in their products. Tariffs are likely to trigger retaliatory


measures that will hit U.S. exporters and their employees, shrinking their incomes and demand for construction. Reduced imports and exports would be particularly damaging to the economy in California, which has the leading container ports and


thanks to the region’s heavy engineering construction activity, which is up 35% this year,” the firm stated. “In contrast, the region’s nonresidential building ac- tivity thus far in 2024 has changed little, at a sub-2% growth.” Projects that started in 2024, particularly heavy engineer- ing projects, will support construction throughout 2025. Several other categories will be in the plus column in 2025. Major work on the state’s airports and transit systems will continue, as will preparations for athletic and hospitality venues in anticipation of the 2026 soccer World Cup and 2028 Olympics. If the high-speed rail line between Las Vegas and Rancho Cu- camonga goes forward, as seems likely, there will be related projects besides the railroad itself.


Another positive came on Election


Day, when voters approved $8.5 billion in bonds to fund construction projects for K-12 schools, plus another $1.5 billion for community colleges. In summary, California’s construction


industry held steady overall in 2024, though results varied significantly by location and project type. Prospects for 2025 are clouded by uncertainty over policy changes emanating from Wash- ington, DC.


CALIFORNIA CONSTRUCTOR JANUARY/FEBRUARY 2025


17


a large share of cross-border freight traffic. Te state also benefits from large numbers of foreign tourists and business visitors, numbers that are likely to decline with more hostile trade or immigration policies.


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