Houston leads US metros in construction job gains
Key points:
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- • Workforce culture and talent retention remain central to hospitality growth.
October 2026 — Houston builders are contributing to job growth in a big way. The region added 13,100 construction jobs from July 2025 to July 2026, more than any other U.S. metro, according to an Associated General Contractors of America analysis of federal employment data. In the greater Houston area, construction employment rose 5% as more than half of the 360 metro areas AGC analyzed the sector’s employment stagnate or shrink.
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However, Houston’s broader labor market tells a different story, with total employment growing just 0.5% year over year through July, adding 17,500 jobs, according to the Federal Reserve Bank of Dallas.
The gains come amid a tight market for skilled trades across Texas. “Demand for workers is currently very unbalanced,” AGC chief economist Ken Simonson said. “Contractors that are building data centers, power projects and advanced manufacturing plants can’t find enough skilled workers, while firms in a majority of metro areas are stagnating or shedding employees.”
Builders compete for labor
Houston’s construction gains come as contractors across Texas report intensifying competition for skilled workers. A heavy industrial construction contractor told the Dallas Fed’s Texas economic update it pays $28 to $32 an hour for skilled concrete workers. Data center projects are offering concrete workers $45 an hour plus a $150 per diem, the contractor said.
Dallas Fed contacts also reported shortages of concrete workers and electricians tied to data center construction. Competition has increased turnover, prompting some employers to repost positions just three to six months after filling them. The pressure comes as Texas’ labor supply shows signs of tightening: the state’s labor force contracted at a 0.7% annualized rate during the first half of 2026, compared with 1.2% growth over the same period last year.
Immigration policy changes are also affecting hiring at some firms. In a July Dallas Fed survey, 14% of firms said policy changes over the previous year affected their ability to hire or retain foreign-born workers. Many of those businesses reported greater reliance on contract labor, subcontracting or outsourcing.
Temporary hiring accelerates
Employment services are growing rapidly in Houston. Payrolls in the sector expanded at a 28.5% annualized rate from April through July, adding 5,300 jobs, according to the Dallas Fed. The trend extends statewide: Texas staffing services added 32,000 jobs during the first half of 2026, a 22% annualized increase, more than five times the national pace of 3.8%.
“The past two to three months have been very busy,” one recruiting firm told the Dallas Fed. “Many companies … can’t find the right talent on their own.”
Dallas Fed contacts said Texas firms are increasingly using temporary workers to meet demand amid labor shortages rather than to hedge against uncertainty. Staffing employment is often viewed as a leading indicator because employers can add temporary workers more quickly as demand shifts.
Workforce training providers are also looking to align programs with employer demand. “The biggest thing is aligning our programs to industry needs so that the graduates we provide are also aligned with those needs,” Darrin Brust, campus president of Universal Technical Institute-Houston, said in an interview with Invest:. “These are AI-resistant careers with strong earning potential.”
Projects keep contractors busy
Developers say major projects are continuing to move forward. “We have been waiting for construction pricing to come down, but major investments in manufacturing, data centers, and industrial projects have kept contractors busy. For us, that means being patient, focusing on location, and waiting for the right opportunities,” Roberto Contreras, CEO of DC Partners, said in a recent interview with Invest:.
New industrial projects are also underway across the region. Dallas-based Holt Lunsford broke ground last month on a 192,000-square-foot project along Highway 249. In Brookshire, construction started on the second phase of a 48-acre industrial park after a wind turbine manufacturer pushed occupancy in its first two buildings above 80%.
Chris Scott, CEO of Scott + Reid General Contractors, said projects that had previously stalled are moving again. “Deals that once took three months to mobilize were taking nine, largely because owners and developers were laser-focused on price and cost certainty before committing. … 2026, by contrast, has been a banner year for Scott + Reid. Once capital sources became clearer, projects that had been paused started moving again,” Scott told Invest:.
Costs remain elevated
Businesses are reporting broader input-cost pressures alongside rising wages. Houston’s three-month moving average diffusion index for input prices accelerated to 24.7 in July from 20.1 in April, while the Texas Manufacturing Outlook Survey’s prices-paid index climbed to 42.1 from 33.8 over the same period.
Ford Noe, senior managing director and market leader at Marcus & Millichap, said developers continue to face pressure from construction costs. “Costs escalated rapidly during the inflationary period, and we are starting to see early signs that certain raw goods and construction inputs may begin trending upward again,” Noe told Invest:. Average hourly wages in Houston rose 3.0% year over year to $36.51. Statewide wage growth accelerated from 3.5% to 4.0% between March and June as pay pressure spread from manufacturing into services.
Houston’s construction market is expanding faster than the region’s broader labor market, increasing competition for workers as Texas employers report shortages in key skilled trades.
The Dallas Fed identified several indicators to watch in the months ahead, including whether rapid staffing-services growth translates into permanent hiring and whether skilled-worker shortages continue to put upward pressure on wages. Similar to other growing metros, workforce training in Houston will also be part of the equation as contractors compete for workers to support the region’s construction pipeline.
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