Construction Hiring Snapshot
Inflation & Housing Pressures
Regional Construction Pressures
Summary Table
Region / TopicKey Trend Summary
Construction HiringJob openings trending down; metro variation in growth; long-term demand remains robust.
InflationWest region CPI above national average; Seattle, San Diego, LA facing sharp inflation pressures.
Housing MarketHome values cooling, housing wealth slipping amid rising supply.
External PressuresWildfire reconstruction driving new labor and cost pressures in California.
Bottom Line

Hiring momentum is uneven: national job openings fell year-over-year while select metros still grew. Inflation is hitting hardest in Seattle, San Diego, and LA, creating added wage pressure. Housing markets are cooling, but rebuilding after California wildfires will significantly redirect labor demand and costs. Firms must remain agile by tracking metro job flows, adjusting compensation to inflation, and preparing for volatile surges in project demand.

References
  1. YCharts – U.S. Job Openings in Construction
  2. Occupational Health & Safety – Construction Employment Trends Across U.S. Metros
  3. AGC of America – Construction Employment Data & Rankings
  4. Bureau of Labor Statistics – Construction & Extraction Occupations Outlook
  5. Bureau of Labor Statistics – Construction Labor Productivity Highlights
  6. JLL – 2025 U.S. Construction Outlook
  7. BLS West Region – Consumer Price Index (July 2025)
  8. USAFacts – Current Inflation Rate (West Region)
  9. Axios – Seattle Inflation Surge and Kiplinger – Cities Hardest Hit by Inflation
  10. Investopedia – American Housing Wealth is Slipping
  11. Vox – Housing Shortage & YIMBY Policies
  12. San Francisco Chronicle – Contractors Brace for Wildfire Rebuild Costs

The construction landscape on the West Coast is navigating turbulent waters as we step into Q2 2025. With sharp spending contractions, input cost pressures, and shifting multifamily dynamics, the region faces a critical inflection point. Here is a breakdown of the current economic data, how it compares to the past two quarters, and what construction leaders need to anticipate.

Spending Trends: A Market Under Pressure

Nonresidential construction in the West is forecasted to decline by 13.9% in 2025, a stark contrast to the national average contraction of 2.2% (ConstructConnect). The sectors hit hardest are industrial and medical, both facing steep pullbacks. Commercial construction remains the only segment with pockets of strength, but even this is limited to specific markets and project types.

For leaders, this contraction signals a need to tighten strategic focus, avoiding exposure to sectors with weak backlogs and limited project initiations.

Cost Escalation & Labor Pressures

The Mortenson Cost Index for Q1 2025 reported a 2.2% national increase, with year-over-year growth at 3.9% (Mortenson). Key West Coast cities like Portland and Seattle are experiencing quarterly increases of 2.2% and 2.6%, respectively, with annual increases surpassing 3.4%-4.6%.

Material prices, which had stabilized in late 2024, have rebounded upwards. Skilled labor shortages continue to plague the region, driving wage inflation and squeezing project margins. These pressures are unlikely to ease significantly in Q2, meaning contractors and developers will need to navigate cost escalations with surgical precision (Chubb).

Multifamily Housing: Peaks and Plateaus

The multifamily segment on the West Coast has entered a new phase. Markets like Portland, Oakland, and San Francisco have already peaked in apartment supply, while Sacramento and Tacoma followed suit in early 2025. Over the next two quarters, Seattle, Riverside, and San Jose will reach their peaks, with Los Angeles, San Diego, and Anaheim trailing into late 2025 and early 2026 (RealPage).

As these markets reach saturation, rent growth will plateau, and developers may face increased vacancies unless demand surges. For recruiters and project planners, these timing dynamics are critical to align resource allocation with market cycles.

Comparing Q1 and Q2 2025: Trends in Motion
MetricQ1 2025 SnapshotQ2 2025 Projection
Construction Spending GrowthSlowed nonresidential momentumAccelerated decline in industrial/medical
Cost Index TrendsPersistent material & labor pressuresModeration or plateau expected mid-Q2
Multifamily Pipeline DynamicsPeaks in select urban marketsBroader saturation across region
Commercial Project HealthSelect positive momentumCautious optimism with sector-specific focus

Q1 showcased a market slowing, but not yet reversing. Q2, however, is marked by sharper declines, particularly in nonresidential sectors, with limited relief in sight.

Strategic Takeaways for Construction Leaders

Given these dynamics, construction companies must recalibrate their strategies:

  1. Focus on Commercial Opportunities: While industrial and medical sectors retract, commercial projects (especially tenant improvements and adaptive reuse) remain active.
  2. Monitor Market-Specific Multifamily Trends: Align recruiting and resource planning with metro areas that are just past peak supply, where hiring demand remains.
  3. Mitigate Labor and Material Cost Risks: Build flexible staffing models and explore value engineering to counteract continued cost escalations.
  4. Prepare for Public Sector Opportunities: As private sector momentum fades, infrastructure and public works projects may offer a counter-cyclical pipeline.
Looking Ahead: What Could Change?

The West Coast construction economy is unlikely to stabilize until late 2025 or early 2026. Potential catalysts for a rebound include:

Until then, leaders must operate with discipline, focusing on markets and sectors that offer resilience against macroeconomic headwinds.

Final Thoughts

The next two quarters will test the agility of West Coast construction firms. Navigating shrinking margins, managing resource allocation amidst shifting demand, and positioning for a late-year rebound are the keys to weathering this period. Leaders who can balance tactical cost control with strategic market positioning will emerge stronger when growth resumes.

Need help aligning your recruiting strategy with these market shifts? Ambassador Group specializes in guiding construction leaders through complex hiring landscapes. Reach out to learn how we can help you stay ahead of the curve.

https://app.reclaim.ai/m/ambassador-group/exploratory-call

Seattle

Summary: Seattle’s construction employment has declined by 8% year-over-year, averaging 20,300 workers in early 2025. Despite this, contractor confidence remains cautiously optimistic, with expectations of increased project volumes in 2025. mortenson.comamericanworkforcegroup.net

Portland

Summary: Portland’s construction sector is experiencing mixed signals. While residential demand is sluggish due to interest rates, green infrastructure projects are adding skilled jobs.

San Francisco Bay Area

Summary: San Francisco is preparing to construct its first post-pandemic office tower at 530 Sansome St., aiming to revitalize the downtown core and stimulate economic growth. sfchronicle.com

Los Angeles

Summary: Los Angeles is facing a projected budget shortfall of nearly $1 billion, which could lead to thousands of layoffs and major cuts to city services, potentially impacting the construction industry. theguardian.com

San Diego

Summary: San Diego’s construction sector is transforming to ensure efficiency despite labor shortages, with initiatives like training programs and technology adoption to meet workforce demands. tceconstructors.com

Regional Economic Context

Note: Data reflects the most recent available as of June 30, 2025.

Seattle

Construction employment in the Seattle–Tacoma–Bellevue metro area was 118,000 in January 2025, down 3.7 percent from a year earlier Bureau of Labor Statistics. The Seattle area CPI-U advanced 2.5 percent over the 12 months ending February 2025 Bureau of Labor Statistics.

Portland

Construction employment in the Portland–Vancouver–Hillsboro metro area stood at 77,900 in January 2025, a 0.8 percent decline year-over-year Bureau of Labor Statistics. Inflation in the West Region, which serves as a proxy for Portland’s consumer prices, rose 2.6 percent over the 12 months ending February 2025 Bureau of Labor Statistics.

San Francisco Bay Area

Construction employment in the San Francisco–Oakland–Fremont metro area was 112,900 in January 2025, down 4.8 percent from January 2024 Bureau of Labor Statistics. The San Francisco area CPI-U advanced 2.7 percent over the 12 months ending February 2025 Bureau of Labor Statistics.

Los Angeles

Construction employment in the Los Angeles-Long Beach-Anaheim metro area reached 244,700 in January 2025, a 4.0 percent decrease year-over-year Bureau of Labor Statistics. The Los Angeles area CPI-U advanced 3.1 percent over the 12 months ending February 2025 Bureau of Labor Statistics.

San Diego

Construction employment in the San Diego–Chula Vista–Carlsbad metro area was 88,200 in January 2025, down 1.9 percent from January 2024 Bureau of Labor Statistics. The San Diego area CPI-U advanced 3.8 percent over the 12 months ending February 2025 Bureau of Labor Statistics.

Macro Context

Nationally, the construction industry added 13,000 jobs in March 2025, a 1.8 percent year-over-year gain ABC. Material input prices, as measured by the Producer Price Index for nonresidential construction, rose 0.6 percent in March 2025 and are up 0.8 percent over the past year ABC. Despite moderation from pandemic-era spikes, the gap between wage growth and inflation continues to strain labor markets across the West Coast.

Sources

  1. U.S. Bureau of Labor Statistics, Seattle–Tacoma–Bellevue, WA, Economy at a Glance. https://www.bls.gov/eag/eag.wa_seattle_msa.htm
  2. U.S. Bureau of Labor Statistics, “Consumer Price Index, Seattle area — February 2025.” https://www.bls.gov/regions/west/news-release/ConsumerPriceIndex_Seattle.htm
  3. U.S. Bureau of Labor Statistics, Portland–Vancouver–Hillsboro, OR-WA, Economy at a Glance. https://www.bls.gov/eag/eag.or_portland_msa.htm
  4. U.S. Bureau of Labor Statistics, “Consumer Price Index, West Region — February 2025.” https://www.bls.gov/regions/west/news-release/2025/consumerpriceindex_west_20250312.htm
  5. U.S. Bureau of Labor Statistics, San Francisco–Oakland–Fremont, CA, Economy at a Glance. https://www.bls.gov/eag/eag.ca_sanfrancisco_msa.htm
  6. U.S. Bureau of Labor Statistics, “Consumer Price Index, San Francisco Area — February 2025.” https://www.bls.gov/regions/west/news-release/consumerpriceindex_sanfrancisco_20250312.htm
  7. U.S. Bureau of Labor Statistics, Los Angeles-Long Beach-Anaheim, CA, Economy at a Glance. https://www.bls.gov/regions/west/ca_losangeles_msa.htm
  8. U.S. Bureau of Labor Statistics, “Consumer Price Index, Los Angeles area — February 2025.” https://www.bls.gov/regions/west/news-release/consumerpriceindex_losangeles_20250312.htm
  9. U.S. Bureau of Labor Statistics, San Diego-Chula Vista-Carlsbad, CA, Economy at a Glance. https://www.bls.gov/regions/west/ca_sandiego_msa.htm
  10. U.S. Bureau of Labor Statistics, “Consumer Price Index, San Diego Area — March 2025.” https://www.bls.gov/regions/west/news-release/2025/consumerpriceindex_sandiego_20250410.htm
  11. Associated Builders and Contractors, “ABC: March Construction Employment Up Just 1.8% Year Over Year,” April 4 2025. https://www.abc.org/News-Media/News-Releases/categoryid/1065/Default

We do not learn from experience… we learn from reflecting on experience.

John Dewey

You or your team hired someone who failed. They may not have had the skills, character, personality, or perspective that the position required.

It’s easy to write the failure off completely to the candidate, setting yourself up to make your mistakes over again.

But great companies don’t make mistakes repetitively. And if we really believe that our people are our greatest asset, a failed hiring process is a big deal. We must not squander those lessons!

Imagine how much more effective your company is if its turnover rate is 1 in 4 hires versus a competitor who may have an average 1 in 2 turnover rate! Over time, that’s a massive difference in energy allocation that is better spent on securing new business and improving product quality.

Companies who build teams better tend to grow at greater sustainable and healthy stress levels. A quick learning pace is key.

H2 heading: LET’S GET THE EXCUSES OUT OF THE WAY

Often the unproductive internal conversation sounds like…
“They didn’t tell us about that in the interview.”
“Their performance was lackluster.”
“They required too much hand-holding.”
“They didn’t fit our culture.”
“They didn’t do the job properly.”
Etc, etc, etc…
Does your team abdicate ownership to the failed employee, and thus fail to learn for the next hire?
When a teammate fails, does the team look retrospectively at the ways it may have failed its teammate? Communication? Training? Encouragement? Accountability?

H3 Heading: STEPS TO ACQUIRING ACTIONABLE INSIGHT

Conduct separate manager and employee exit interviews by a non-biased party. They can be internal or external. Ambassador Search Group can conduct these for you at a nominal charge if you like.
Review both exit interviews sequentially to recognize differences in perceptions and experience. It’s important to ask the same questions for comparable results.
For managers who know how the exit interview will be used, this puts pressure on them to account for the employee’s perspective. Otherwise, they will be seen to be clearly out of touch. Accountability without blame is healthy.

H4 heading: QUESTIONS TO ASK YOURSELVES

Bullet list:

Numbered list:

  1. What did we fail to understand in the interview?
  2. What expectations did we not set clearly enough and achieve mutual understanding on? Setting and saying expectations is not the same thing.
  3. What skills did we not validate well enough? Asking about skills and seeing them borne out in answers to behavioral questions or sample problems is not the same thing.
  4. How could our culture value and expectations been made more clear?

Companies who quickly and cheerfully diagnose and change based on hiring lessons learned have a serious cultural and team-building competitive advantage.

Test button
The Salary Data Reflex: Why We All Check the Numbers 📊

Open any job board and you will find a treasure trove of “market‑rate” pay ranges. Construction leaders scroll those charts, employees share screenshots, and everyone wants a number that justifies a position. Good intentions collide with moving targets: market forces shift monthly, and open‑source data lumps wildly different roles, scopes, and cultures into one misleading range.

The Hidden Variables That Upend “Market Average” 🎯

Your foreman with thirty years of trusted client relationships is not interchangeable with a new superintendent from another state. Yet salary tables treat them as columns in the same spreadsheet. Real pay is molded by:

Ten Reasons Industry Wage Data Misleads Construction Leaders 🚧
  1. Selection bias: Only companies and employees willing to share numbers participate, skewing the pool.
  2. Inflated or deflated self‑reporting: Staff round up, employers round down, and nobody audits the inputs.
  3. Emergency overpayments: Post‑departure panic hires spike the curve beyond normal conditions.
  4. Relational equity: Pay often reflects who you persuade, not just what you produce.
  5. Performance gaps: Tenure and title lag behind real value; high output juniors can out‑earn stale veterans.
  6. Quality‑of‑life trade‑offs: People trade cash for sane hours, culture, or mission; those premiums stay hidden.
  7. Unequal benefits packages: Health plans, per‑diem, and truck allowances carry five‑figure deltas rarely captured in surveys.
  8. Risk‑sharing bonuses: Profit‑sharing schemes lower salaries but raise upside, confusing straight‑salary comparisons.
  9. One‑sided negotiating ammo: Data is brandished when convenient and buried when it contradicts the story.
  10. Value blindness: Spreadsheets ignore the irreplaceable expertise and institutional memory one craft leader supplies.
A Better Path to Fair Pay 💡
  1. Inventory value, not averages. Map each role’s direct impact on safety, schedule, profit, and client trust.
  2. Quantify risk of loss. What would three months of vacancy cost, and who would pick up the slack?
  3. Link rewards to outcomes. Tie bonuses to measurable project KPIs instead of generic tenure bumps.
  4. Communicate your philosophy. Explain how pay is set so high performers see the road to growth.
  5. Revisit annually with fresh context. Market conditions move, but so do people, projects, and margins.
For High‑Aiming Construction Professionals 🏗️
Take the next step

👷 Companies: Schedule an Exploratory Hiring Strategy Call to see how disciplined compensation and recruiting align: Book here

🧰 Employees: Apply for a Free Introductory Career Discussion to chart your next pay move: Apply here

One thing I’m noticing and watching closely is a growing relational disconnect between employers and employees. This is apparent in the prevailing viral LI posts, media, and our personal experiences here at ASG.

We believe there is something here for all of us to learn from. We also believe this is intrinsically related to the overall leadership quotient in America.

Employees often fail to understand what employers value and perceive as high-performance. Their view is often myopic, considering too much their own interests and not those they work for.

Employers often fail to understand the importance quality employees place on their goals and personal growth. They can treat people as relatively expendable and utilitarian, forgoing the value of personal connection as if work is only about professional performance. Instead of being a mentor, they are a boss.

To be successful as either an employer or employee, you have to care about people, and properly at that. This is a never-ending learning process. It’s complicated, messy, and often exhausting. To be clear, there are MANY fair objections to this broad idea of ‘caring about people’.

To understand more about what I mean about ‘caring about people’ consider reading the book “Love & Profit.” The distillation is that caring about people is entirely connected to holding them accountable, even to the point of letting them go.

I’m willing to say that to lead people well, you must care about them.

Success in the workplace, more than ever it seems, is directly connected to people skills no matter where on the org chart one works. Those that can embrace a mindset of winning and losing together can build or participate in great teams. But there is a growing contingent of the workforce and company leaders who fail to understand how important the other is. Corporate layoffs to prop up short-term stock prices on one hand and mercenary job-hopping on the other. Each is out for their own, to the collective long-term detriment.

We have no lack of books on leadership but are we, Americans, losing our grip on what real leadership and teamwork is in the real world? It’s a big deal. Wars are won and lost on leadership quotient.

“The fish rots from the head”

-ancient proverb

It’s not hard to see other failures of leadership. Our politicians obviously and the increasingly polarized positions, many of our hallowed institutions are constantly rocked by scandals, crony capitalism abounds, and a general decrease in the trust we can afford to place in one another. These are connected.

Leadership is the solution. Turn the org chart upside down.

To those struggling to be better leaders at any level, we salute you.

We need to respond aggressively and wisely to the Covid-19 crisis.One critical element is to keep the economy moving in every way reasonable so that the financial impact on businesses, and consequently the people that work in them, are impacted as little as possible. The cost to the world economy will be measured in the tens of trillions of dollars.Italy is seeing significant economy trouble from their shutdown which is impacting people down to the level of their daily food. https://www.nytimes.com/2020/04/07/opinion/italy-coronavirus-naples.html?searchResultPosition=1

BUSINESSES; keep your gears moving as much as possible. Working from home. Building relationships. Do business development. Develop new products. Double the amount of energy you are outputting to serve your market. Develop your marketing. Find new ways to be of value to your customers. Think about coaching your leaders. Consider replacing chronic underperformers with motivated players. This is not break time, it goes time!

PEOPLE; develop new skills, find creative ways to contribute at work by examining how problems can be innovatively solved, build your relationships, and DON’T BINGE NETFLIX. Unemployment is brutally high and those who can deliver solutions and performance under pressure are going to enjoy the most job security. And, frankly, the world is going to rely on you to pull us out of this. Necessity is the mother of invention, so take advantage of that! Find new ways to solve the problem that you COULD NOT have in easier times. It’s a chilly economic environment out there so we have to stay active.

DO NOT LAY DOWN IN THE SNOW AND GO TO THE LIGHT! We are going to be solving this economic problem long after the Coronavirus has been annihilated. Some businesses are going to do really well because they are staying aggressive and leveraging the silver-lining this crisis offers. This too shall pass.

Predictions are a far cry from prophecy. This is what we estimate from what we see in an ultracompetitive and malnourished hiring environment. But I’ll guarantee one of these will prove true.

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