Construction Compensation Growth Cooling in 2026, Survey Data Shows
According to Engineering News-Record, compensation increases for construction staff have continued to decline from a 2023 peak, with new survey data suggesting average salary hikes could fall below 4% this year for the first time since 2020.
Market Impact
Data from compensation consultant Personnel Administration Services, cited in ENR’s Q2 2026 Cost Report, shows base salaries for construction staff rose an average of 4.36% in 2025, down from 4.6% in 2024 and a recent high of 5% in 2023. PAS’s 2026 Construction/Construction Management Staff Salary Survey found that respondents expect to offer an average of 3.9% in raises this year.
PAS President Jeff Robinson told ENR he believes the forecast is realistic. “I think we’d be lucky to hit 4.1% or 4.2%,” Robinson said. “I think it’s going to be really close to that 4%.” Robinson also noted that increases in the 4% range are within the bounds of historic norms, suggesting the market may be stabilizing rather than continuing to contract.
Regional variation is notable. The northeastern states, including Connecticut, Massachusetts, and New Hampshire, saw the steepest drop, falling to 4.2% in 2025 from 4.6% in 2024, with respondents there forecasting a further decline to 3.6% in 2026. The southeastern region, covering states including Florida, Georgia, and Tennessee, also anticipates a 0.6 percentage point drop, to 4% this year.
What It Means for Subcontractors
- Budget planning for the second half of 2026 should account for compensation increases in the 3.9% to 4.2% range, rather than the 4.5% to 5% ranges seen in recent years.
- Regional differences matter. If you operate in the Northeast or Southeast, your field and office staff may expect increases closer to historical norms, giving you more room to plan, but also less justification for above-average offers to retain key talent.
- Retention strategy should not rely on salary alone as compensation growth cools. Field service companies should evaluate non-wage benefits, training opportunities, and project continuity as differentiators.
- If your competitors are also pulling back on raises, a slightly above-average offer in the 4.2% to 4.5% range could still give you a meaningful hiring edge in tight skilled-labor markets.
