Construction Labor Wages Surge 4.6% in 2025, Outpacing Inflation
Event summary
- Gordian's 2026 RSMeans Data shows construction labor wages rose 4.6% in 2025, following similar increases of 4.1% and 4.6% in the prior two years.
- 98% of labor categories saw wage increases exceeding 3%, up from 89% and 93% in the previous two years.
- Construction equipment costs stabilized with a 1.4% average increase, down from 4.5% and 7.0% in the prior two years.
- Materials costs rose 3.9% on average, slightly up from 3.1% in 2025 but down from 8.7% in 2024.
The big picture
The data highlights a persistent upward trend in labor costs, which have outpaced inflation and shown increasing breadth across categories. While equipment and materials costs have stabilized, the construction industry remains sensitive to supply chain disruptions and market volatility. Gordian's emphasis on AI-driven solutions reflects a broader shift toward leveraging technology to navigate these challenges and enhance project efficiency.
What we're watching
- Labor Cost Pressures
- How sustained wage growth will impact project budgets and profitability in the construction sector.
- Market Volatility
- Whether the recent stabilization in equipment and materials costs will persist amid ongoing supply chain uncertainties.
- Technological Adaptation
- The pace at which construction firms adopt AI and data-driven tools to manage cost fluctuations and improve project planning.
Related topics