After several years of relative stability following the COVID-induced supply chain headaches of 2020-2021, the construction industry is likely facing another phase of chaos due to fluctuating material costs and shifting immigration policies. Indeed, stricter immigration enforcement and potential tariffs on building materials are likely to create a perfect storm — delaying projects, driving up expenses, and worsening an already critical housing shortage.
Why does this matter? A key factor in the cost of a newly constructed home is labor and immigrants make up about 26% of the U.S. construction workforce. As immigration enforcement efforts tighten, contractors may have difficulties finding and retaining workers. With labor shortages already a pressing issue – the construction industry reported 217,000 job openings in December 2024 – further reductions in the workforce will likely increase project costs and delays, both of which are ultimately passed down to homebuyers and renters.
To address labor shortages, organizations have taken two different approaches:
Training the next generation of construction workers: Organizations like the Building Talent Foundation (‘21 Ivory Prize finalist), Home Builders Institute (‘22 Ivory Prize finalist), and Build UP (‘22 Ivory Prize winner) are bringing a new generation of workers, often from nontraditional backgrounds, into the industry. While varied in their programming, each provides educational opportunities and apprenticeships to bring more young people into the trades.
Increasing labor efficiency with automation: At the same time, there is growing interest in efficiency-boosting technologies. Companies like Apis Cor (‘24 Ivory Prize finalist) and ICON (‘21 Ivory Prize finalist) are pioneering robotics for constructing homes, while BotBuilt (‘23 Ivory Prize finalist) is using automation to streamline the construction process. As a new generation enters the workforce and technology evolves, these innovations have the potential to reduce reliance on manual labor and increase productivity across the industry.
Innovators such as these highlight just a few of the opportunities to think and build differently. As immigration and trade policies continue to evolve, the construction sector must find ways to adapt — balancing workforce development, innovation, and economic realities to continue to build much-needed homes.
As the sector addresses the many coming changes, the importance of innovation and the adoption of new solutions will grow. We look forward to seeing many more homes built with a new generation of workers wielding a new set of skills and tools that deliver more housing, more quickly, more affordably, than ever before.
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