Construction payrolls grew in July even as the broader U.S. labor market shrank, according to a state-by-state breakdown published Friday by the National Association of Home Builders. The industry added 22,000 jobs during a month when total nonfarm employment fell by 23,000 — a divergence that underscores how nonresidential building continues to absorb workers while home building cools.
The analysis, written by NAHB economist Danushka Nanayakkara-Skillington and published on the association’s Eye on Housing blog, breaks down Bureau of Labor Statistics state employment data for July 2026. It shows construction job growth that is real but narrow, concentrated in a handful of states and reversing in some of the country’s largest building markets.
Construction employment gains were spread unevenly across states
Twenty-eight states added construction jobs in July, while 18 states and the District of Columbia lost them. Four states reported no change.
Illinois posted the largest monthly gain at 3,200 construction jobs. Mississippi recorded the strongest percentage increase at 1.9%, a reminder that in smaller states a few hundred positions can move the rate sharply.
The largest monthly decline came in Texas, which shed 3,400 construction jobs. West Virginia registered the steepest percentage drop at 2.8%.
The Texas figure is striking because the state remains the country’s construction employment engine over a longer horizon. Measured year over year, Texas added 17,500 construction jobs between July 2025 and July 2026 — more than any other state. A single soft month does not undo that, but it does suggest the pace of hiring in the largest building market has stopped accelerating.
Year-over-year growth slowed to 1%
Nationwide, construction employment rose by 82,000 jobs over the 12 months through July, a gain of 1%. That is modest growth for an industry that spent much of the past several years expanding faster than the economy as a whole.
Louisiana led all states in percentage terms, growing construction employment 11.4% year over year. California moved the opposite direction, losing 6,700 construction jobs — the largest absolute decline in the country. Alaska posted the steepest percentage drop at 3.7%.
The California and Texas numbers together account for a meaningful share of national construction activity, and their divergence — California shrinking over the year, Texas expanding but stalling in July — illustrates why national averages can obscure what builders actually experience in their own markets.
The wider labor market weakened
Construction’s July gain came against a soft national backdrop. Total nonfarm payroll employment fell by 23,000 jobs, a decline RealtyWire covered when the national figures were released and one that raised market expectations for a Federal Reserve rate cut.
At the state level, 26 states and the District of Columbia added jobs across all industries, while 24 states lost them. Maryland and Illinois tied for the largest gains at 11,700 jobs each, followed by Washington at 11,600 and Missouri at 8,100. New Jersey recorded by far the largest decline, shedding 25,600 jobs.
Unemployment rates ranged from 2.0% in South Dakota, the lowest in the nation, to 5.9% in the District of Columbia, the highest.
What it means
The verified facts are narrow: construction added jobs in July, most states participated, and annual growth has slowed to 1%.
The interpretation RealtyWire would offer is that these numbers are consistent with a two-track construction economy that other data this year has repeatedly described. Residential building has been contracting — single-family starts fell sharply in July, and NAHB’s own research has documented cooling wage growth for residential building workers, with real pay now falling. Nonresidential work, particularly data center construction, has been expanding and pulling on the same labor pool. Construction job openings jumped 36% year over year in June, a level of unfilled demand that sits oddly alongside a housing downturn.
This monthly state breakdown does not separate residential from nonresidential employment, so it cannot confirm that split on its own. It is compatible with it, and nothing more than that should be read into a single month of state-level data, which is frequently revised.
What to watch
The next test is whether Texas’s July decline holds or reverses in the August figures. A second consecutive drop in the largest construction employment market would be a stronger signal than one month of noise.
Also worth watching: whether California’s year-over-year losses deepen, and whether states seeing heavy data center investment continue to post outsized gains. BLS will publish August state employment data next month. For builders and developers, the practical question embedded in these numbers is not whether construction workers exist, but which projects are winning them.
