The Associated Builders and Contractors trade group is estimated at a last month’s report the industry should bring in 456,000 new workers by 2027, 30.7% from the 349,000 needed this year.

“Failure to do so will exacerbate labor shortages, particularly in certain occupations and regions, putting further upward pressure on labor costs,” ABC Chief Economist Anirban Basu warned in a statement.

But despite the development of AI infrastructure, most of the demand for new workers this year is due to retirements rather than increased demand for construction services, he added. This year’s forecast also marks a decline from previous years.

However, the ABC said overall construction spending is poised to break a slump and return to growth for the first time in years. And according to its model, every additional $1 billion spent on construction translates into the need for 3,450 new jobs.

If the spending forecasts prove too conservative, then the industry will need more workers, Basu said. In fact, just days after the ABC report, quarterly reports from AI hyperscalers shocked Wall Street with capital spending estimates for 2026.

Meta, Microsoft, Amazon, Google and Oracle alone is expected to spend a combined $700 billion this year, up from $400 billion last year. Much of that will go into AI, including chips and data centers.

While tech giants are fueling construction demand, President Donald Trump’s immigration curbs are further cutting off the flow of a traditional pool of workers for the sector.

That has exacerbated labor shortages and forced project delays, according to the Associated General Contractors of America, which said last year that 92% of construction companies who are hiring are reportedly having trouble finding qualified workers.

Meanwhile, AI data center projects are often more profitable for construction companies, exacerbating the shortage of other projects such as apartments, factories, and healthcare facilities, Basu said. spoke to Washington Post.

ABC calculates that costs for new data center construction in the first 10 months of 2025 jumped 32% from the same period last year. And since August 2024, nonresidential specialty trade contractors have added 95,000 jobs.

Skilled trades lead to an increase in employment

A blind report from BlackRock last month cited Labor Department forecasts showing that employment in skilled trades will grow 5.3% on average from 2024 to 2034 compared to an overall rate of 3.1%. Among specific trades, growth will be faster, with electricians growing at 9.5% and HVAC technicians at 8.1%.

The demographics of the industry pose an additional challenge as nearly one-fifth of the construction workforce is over 55. Apprenticeships and licensing require years of training for some trades, which slows the replacement of retiring workers.

“This means the crunch time for recruiting and training the skilled workforce of the future is now – before that knowledge retires,” BlackRock said. “The increased complexity of AI-related infrastructures makes highly skilled and experienced teachers more valuable; the older skew of the workforce makes the time challenge even more pressing.”

Such predictions contrast with the recent boom in the broader labor market. The share of consumers who think jobs are hard to find is at a five-year high. The number of announced layoffs in January hit the highest since 2009, while job openings in December were the lowest in five years.

But Ford CEO Jim Farley is sounding the alarm over the massive workforce shortage for what he calls “Essential economics.” Last year, he estimated a deficit of 600,000 workers in factories and nearly half a million in construction.

Farley also warned the US ignored the labor needed to build and maintain data centers and manufacturing facilities.

“I think the purpose is there, but there is nothing to fill the ambition,” he said Axios said in September. “How are we going to reshore all these things if we don’t have people to work there?”