Construction Unemployment Rates Rise in Most U.S. States Amid Industry Challenges
Key Takeaways
- Only two states, Louisiana and Ohio, reported lower construction unemployment rates in March 2026 compared to previous periods.
- The national NSA payroll construction employment increased by 58,000, reaching 8.3 million, surpassing pre-pandemic levels by 9.3%.
- Most states (44 out of 50) had construction unemployment rates above 10%, indicating widespread industry challenges.
- External factors such as energy prices, insurance costs, and labor shortages are contributing to project delays and scaling back.
- Oklahoma, South Dakota, and Tennessee had the lowest unemployment rates, while New Mexico, New Jersey, and Rhode Island faced the highest rates.
The national March not seasonally adjusted construction unemployment rate was 6.7%, a 1.3% increase from March 2025, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released by Associated Builders and Contractors. The analysis found that only two states — Louisiana and Ohio — had lower estimated construction unemployment rates over the same period, four had the same rate, and 44 had higher rates. All but six states had construction unemployment rates below 10%.
National NSA payroll construction employment was 58,000 higher than March 2025, its 12th straight month of year-over-year increases below 100,000. Seasonally adjusted payroll construction employment was 8.3 million, or 9.3% above its pre-pandemic peak of 7.6 million.
Estimated state construction unemployment rates were lower than their pre-pandemic (February 2020) level in 20 states. As of March 2026, 19 states had lower construction unemployment rates compared to March 2019, and 31 states had higher rates.
“The Iran war and resulting hike in energy prices are negatively affecting the construction industry, which was already struggling with insurance premium increases, escalating labor costs, shortages of skilled labor and elevated interest rates,” said Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Consequently, some projects have been scaled back, put on hold or abandoned altogether. With slower construction activity, demand for construction workers is growing more slowly.”
Recent Month-to-Month Fluctuations
In March, the national NSA construction unemployment rate declined 0.2% from February. Among the states, 28 had lower rates, 20 states came in with higher rates and two states (Kansas and Maine) had the same estimated construction unemployment rates as in February.
The Top States
The seven states with the lowest-estimated NSA construction unemployment rates for March were:
- Oklahoma, 2.8%
- South Dakota, 2.9%
- Tennessee, 3.4%
- New Hampshire, 3.5%
- Colorado, Hawaii and North Carolina (tie), 4.1%
South Dakota had its second-lowest March NSA estimated construction unemployment rate on record at 2.9%, behind last year’s 2.7% rate. Note that Hawaii’s unemployment rate is for construction plus mining and logging.
The Bottom States
The five states with the highest NSA construction unemployment rates in March were:
- New Mexico, 11.7%
- New Jersey, 12.9%
- Minnesota, 13.2%
- Connecticut, 14.8%
- Rhode Island, 16.2%
Rhode Island had the largest decline in its rate from February among the states, down 3.4%. Connecticut had the third-largest monthly decline, down 2.7%.
For more information, view the original press release from ABC.