The 2025-Q1 Per Diem & Pay Insights Report
4/02/2025
For some people, hearing that the Construction Labor Market is the healthiest it has been in years may come as a shock, or, may just sound completely untrue. In the midst of ever-changing economic factors, and an ever-changing world, optimism can seem like a losing strategy. However, when it comes to our current Construction Labor Market, optimism may not be misplaced. While there are many misconceptions that construction is a shrinking industry, we show that the data points the opposite direction. We will also unpack tools to help understand the data, such as understanding regional data and using Seasonally vs. Not-Seasonally Adjusted data. Ultimately, knowledge is power, so we want to share some of the knowledge we have gathered with you!
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What Does the Data Say?
Following 2023's stellar performance, the construction industry set new employment records. Despite many narratives floating around, we now have more people working in construction than ever before. As the unemployment rate has adjusted to healthy levels, job openings have decreased dramatically. This all points to an extremely busy 2025, and the data showing the market is positioned to support this growth. While data does not tell the whole story, it lays a good groundwork to understand current market dynamics, plan for future projects, and make informed decisions regarding hiring and compensation.
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Total Available Construction Labor (TACL)
To talk about this data, we are using the acronym TACL, which is the Total Available Construction Labor. TACL combines all the most important construction labor metrics into one. This report shows that overall in Q4, was dramatically improved over 2023-Q4. The lower the TACL, the tighter the labor market, and the larger the TACL means the more availability.
What About Employment?
Employment is at an all-time record with 2024-Q4 having the highest employment for Q4. This beat the previous record of 2023-Q4 by 2.5% indicating a steady rise in available labor. For employers and workers alike, there is reason for hope as the industry heads into its strongest labor situation since 2017. Q4 of 2024 had a slightly higher unemployment rate than Q4-2023. This tells us there is more available labor to fill job openings and gives employers more leverage with a wider pool of candidates.
This growth story remains consistent 2024-Q4 set yet another all-time record for construction employment in any quarter ever. Because construction is a seasonal business that tends to boom in the warmer months and slow down with the cold, this is very rare to see records set in Q4. This quarter also remained consistent in construction labor supply growth outpacing construction labor demand growth. For employers, this is excellent news, as the surplus in labor keeps wages from skyrocketing, and empowers them to select the best candidates for any given job. As of the end of 2024, there are 8.7 million people in the construction labor market. While the data does not tell us the skill level of the available labor pool, it does show an increasing growth in the labor market that can continue to open doors for opportunities.
While the labor supply does outpace demand, that by no means indicates a dropping demand. The exact opposite is true as this report also shows 2024-Q4 set an all-time record for construction labor demand. This suggests that the market is still vibrant, and there is plenty of work to be done and jobs to be filled by the flourishing labor market. On a cumulative basis, open jobs in 2024-Q4 were down compared to 2023-Q4. This drop is massively significant and is wonderful news for employers as it can it easier to find people, with the right tools. The last time quarterly job openings were this low was in 2020-Q2 as the industry was in the depths of the COVID pandemic.
Where to Find These Workers?
While the data about the market points in one direction, this may not be reflected in the experience of finding skilled workers. As the labor availability is growing, the means and methods of recruiting workers have to continue to shift with the growing workforce. While many workers are aging out of the industry, there is a younger demographic of workers joining the fray, a generation more accustomed to online tools. As recruiting and scouting continue to move increasingly online, the construction industry does not have to be behind. For construction companies and recruiters, knowledge of the tools at their disposal can help them weed through candidates, and ensure excellence in running projects. The importance of marketing your company in this new era also cannot be underestimated, and there are various tools that can make your business more competitive and attractive to the growing labor pool.
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Wage Growth
Some good news for construction workers going into 2025 is that wages continued to grow 2024-Q4. The average pay rate was $32.44, a 0.9% increase over 2024-Q3. If you look at this annually, this represents a notable $1.20/hr average increase or 3.65%. Regionally, jobs that were listed as working Nationwide had the highest average pay rate in Q4 at $37.15. For a full breakdown of average pay rates for various trades, make sure to check out the Road Dog Jobs 2024- Q4 Per Diem & Pay Insights Report. This breaks down the data on wages in the quarter by craft and encompasses a wide variety of trades. This information is important not only for workers, but also for employers to remain competitive in hiring practices.
Seasonally Adjusted vs. Not Seasonally Adjusted
To properly understand the data, it must be represented in a way accurate to the nature of the construction industry. There are two kinds of employment data; Seasonally Adjusted and Not Seasonally Adjusted. In our reporting, all data used is Not Seasonally Adjusted. We use this data because it reflects the reality of the construction industry which at its core is a seasonal business. Using Seasonally Adjusted data can have a flattening effect, on data that is accurately
represented in ebbs and flows. Every year, construction employment follows a natural curve and hits its low point in January and February. Then, like clockwork, rises every month until it peaks in August or September. Then falls again. For a business to understand how employment data
is impacting them, they need to understand where they are on the curve. While smooth lines may work well for economists, in the construction industry it’s like trying to flatten out a roller coaster.
Regional Data
Understanding data as it impacts your particular region is also important in making informed decisions in 2025 around hiring. Factors such as cost of living, types of projects available, and local supply and demand all impact median wages for workers. The West is typically the region with the highest wages due to the cost of living, and the traditionally high construction activity. The Southeast, however, is where you will see lower wages driven by a lower cost of living, the types of construction projects, and the local supply and demand. For companies understanding how these factors impact your region is vital for decision-making concerning project bids, labor costs, attracting and retaining top talent, and staying ahead of the curve. More information on regional differences can be found in the Road Dog Jobs 2024-Q4 Per Diem & Pay Insights Report.
In Summary…
The Q4 2024 RoadDogJobs report paints a picture of a dramatically improved construction labor market compared to recent years. The industry is employing more people than ever before and worker supply is meeting demand, leading to a decline in job openings. While demand remains strong, there was wage growth to be seen, but not as much as could be expected. The RoadDogJobs report suggests this is partially due to the increase in workers in the labor force, and to a mixed level of work for employers during 2024. This information is valuable for construction companies to understand current market dynamics, plan for future projects, and make data-driven decisions regarding hiring and compensation.
Download the report here