2026 Engineering and Construction Industry Outlook

Structural factors continue to limit labor supply. By 2031, 41% of construction workers are expected to retire, while only 10% of current workers are under 25, signaling a critical shortage of younger talent entering the field.²⁴ Interest in construction careers remains tepid, with only 7% of potential job seekers considering this field. Additionally, the migration of engineering talent to technology firms—driven by demand for tech-enabled skills—is intensifying competition for skilled workers.²⁵

The surge in large-scale projects in sectors such as data centers, energy storage, and semiconductors will likely draw a disproportionate share of skilled workers, including electricians, welders, and heating, ventilation, and air conditioning technicians, further straining the labor pool.²⁶ Projections indicate a potential shortage of over two million skilled craft professionals by 2028 if current trends persist.²⁷ Monitoring the demand for electricians, welders, and design engineers across industrial, energy, and infrastructure projects can help identify scheduling bottlenecks and mitigate labor gaps.²⁸

Immigration policies will likely remain a critical factor, as nearly 10% of construction and extraction workers are foreign-born, according to the US Bureau of Labor Statistics.²⁹ Changes in visa regulations and immigration policies could further restrict labor availability in the industry.

In response to mounting challenges, firms are expected to accelerate investments in digital tools and automation, including autonomous equipment, robotics, AI-powered scheduling, and prefabrication where feasible.³⁰ These technologies are rapidly permeating engineering functions, where AI-driven design tools and augmented reality field instructions facilitate “learn-as-you-install” workflows.³¹ While such tools can help reduce reliance on manual labor, they are also increasing demand for skilled talent such as data scientists, digital engineers, and specialists capable of managing AI-driven insights.³² This rising need for highly skilled digital talent is forcing firms to compete with each other as well as with technology companies.

The current administration has announced plans for workforce reform³³ and is directing all federal workforce programs to modernize, integrate, and realign to address critical workforce needs in emerging industries.³⁴

Moreover, as the E&C workforce requirements shift from traditional craft roles toward factory-based technicians and digitally skilled operators, firms may need fresh human resources strategies, ranging from rethinking onboarding and retention models to redesigning career pathways.³⁵ Without sustained action, labor constraints may limit the industry’s capacity to deliver on critical infrastructure, data center, and housing projects in the coming years.