Construction employment grows despite spending slowdown: What it means for the building industry

By Heidi J. Ellsworth.

Economic indicators reveal resilience in construction while highlighting the trends contractors should watch closely. 

It is important across all our Coffee Shop audiences to understand what is happening in the larger construction markets to help make strong business decisions. Having listened to Ken Simonson, chief economist for the Associated General Contractors of America (AGC), speak several times, I wanted to share some of his recent insights. His latest economic analysis presents a nuanced picture of today's construction economy. Drawing on newly released data from the U.S. Bureau of Labor Statistics (BLS), U.S. Census Bureau, Dodge Construction Network, Institute for Supply Management (ISM) and freight industry analysts, Simonson's report shows that while construction spending faces headwinds, employment growth and future planning activity continue to signal strength for much of the industry. 

According to Simonson's analysis of BLS data, construction employment reached 8.331 million workers in June, increasing by 11,000 jobs from May and adding 64,000 positions year-over-year. The growth was driven primarily by nonresidential construction hiring, a positive indicator for contractors and companies serving commercial roofing, building envelope, restoration, metal and related construction markets. His findings suggest that many contractors continue to see enough future work to justify expanding their workforce. 

For The Coffee Shop industries, construction employment is one of the clearest indicators of confidence. Contractors do not hire ahead of uncertainty. When employment rises, it generally reflects active backlogs, growing project pipelines and owner investment in maintaining and improving facilities. That confidence reaches across the trades and reinforces the importance of watching workforce trends as a signal for what may be coming next. 

At the same time, Simonson highlighted a softer spending environment using data from the U.S. Census Bureau. Total construction spending reached $2.21 trillion in May, rising slightly from April but falling 1.5% compared with May 2025. While the decline does not signal a downturn, it does indicate that higher financing costs and ongoing economic caution continue to influence project timing and investment decisions. 

This trend is particularly relevant to roofing and building envelope professionals because it reinforces the importance of diversification and value-driven solutions. Contractors are increasingly responding through maintenance programs, restoration, protective coating systems, energy-efficient retrofits and phased project strategies that help owners maximize existing assets rather than postpone critical work altogether. It also points to the growing role of practical, long-term solutions that support smarter capital planning. 

Looking ahead, one of the most encouraging indicators in Simonson's report comes from the Dodge Momentum Index (DMI), published by Dodge Construction Network. The DMI, which tracks nonresidential projects entering the planning phase and often serves as a leading indicator of future construction spending, declined 1.9% in May but remained strong overall. That planning activity matters because today's planned projects will become tomorrow's opportunities for all construction professionals and companies. Continued planning strength can be an important signal for future demand, especially for companies tied to commercial and institutional construction. 

Simonson's report also referenced economic data from the Institute for Supply Management, which found that the service sector continued to expand for the 24th consecutive month despite ongoing cost pressures. Simultaneously, freight data reported through the Wall Street Journal's Logistics Report showed average flatbed trucking rates reached a record $3.69 per mile in June, based on information from DAT Freight & Analytics.  

These freight costs affect construction broadly because materials and equipment depend on reliable transportation networks. Rising costs can influence estimating, inventory planning, project scheduling and customer expectations, making logistics another important indicator for contractors and suppliers to watch closely. 

Perhaps the most important takeaway from Simonson's report is that construction professionals need to monitor multiple leading indicators rather than focusing on a single economic statistic. Employment growth, spending trends, future project planning, service sector expansion and transportation costs all influence business decisions throughout the industry. Collectively, they provide a more complete understanding of where the market is headed. 

As construction continues to evolve, staying informed on the broader economic picture will remain essential. While the latest numbers reveal both opportunities and challenges, the overall message is one of resilience. Hiring continues, planning remains active and professionals who understand the market indicators driving the industry will be best positioned for success. 

Source transparency: Ken Simonson, chief economist for AGC, is analyzing data from primary sources including the U.S. Bureau of Labor Statistics, U.S. Census Bureau, Dodge Construction Network, Institute for Supply Management and DAT Freight & Analytics as reported by AGC.