Construction unemployment rate increases slightly

The national September 2025 not seasonally adjusted (NSA) construction unemployment rate was 3.8 percent, a slight increase from September 2024, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC).

The Washington-based association’s analysis found that 26 states had lower estimated construction unemployment rates over the same period, 21 had higher rates and three states (Alaska, California and Texas) had the same rates. All states had construction unemployment rates below 10 percent.

Following the end of the longest government shutdown on record (43 days), ABC says government data agencies are once more collecting and releasing important economic data. As a result of the shutdown, no October labor data will be made available as the BLS could not collect the necessary data.

National NSA payroll construction employment was 33,000 higher than September 2024, and seasonally adjusted payroll construction employment was 8.3 million, or 9.1 percent above its pre-pandemic peak of 7.6 million. However, ABC says construction employment increases are slowing; this was the third month in a row that the year-over-year gain was under 100,000 after over four years of six-digit year-over-year gains.

“Higher building materials costs due to tariffs, higher insurance costs and rising labor costs along with a shortage of skilled construction workers are weighing upon the construction industry,” says Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “On the positive side, a somewhat easier policy stance by the Federal Reserve has resulted in lower interest rates. Further declines in interest rates are likely in 2026.”

Estimated state construction unemployment rates were lower than their pre-pandemic level in about 40 percent of states. As of September, 21 states had lower construction unemployment rates compared to September 2019, while 27 states had higher rates and two states (Arkansas and Washington) had the same rate.

In September, the national NSA construction unemployment rate jumped 0.6 percent from August. Among the states, only two (Iowa and Utah) had lower rates, 46 posted higher rates and two states (Hawaii and Ohio) had the same estimated construction unemployment rates as in August.

At 9.4 percent, New Jersey posted the highest September estimated NSA construction unemployment rates, followed by Rhode Island (7.5 percent) and Connecticut (6.7 percent). Minnesota and Montana tied at 5.9 percent.

Oklahoma (1.4 percent), Hawaii (1.7 percent), New Hampshire (2 percent), and Georgia, Indiana and Tennessee (2.2 percent) had the lowest estimated NSA construction unemployment rates for September.

Oklahoma, Hawaii and Indiana each notched their lowest September NSA estimated construction unemployment rate on record. Hawaii also had the largest drop in its year-over-year rate (down 1.2 percent) along with Illinois, Kentucky and Louisiana. Tennessee had its second-lowest September rate on record behind the 2.1 percent the state achieved in September of 2021 and 2022.