The U.S. will need to attract 439,000 net new workers to the construction industry this year in order to keep up with demand, according to new estimates from Associated Builders and Contractors.

The estimate comes amid high demand for construction workers and a federal crackdown on undocumented immigrants, potentially creating a shortage of workers and pushing construction costs even higher.

Housing shortages and ongoing multifamily projects across the country are just part of the demand. The need could become more acute as several factors add demand for workers, including recovery efforts for the hurricanes that swept through the Southeast last fall, rebuilding from the ongoing LA wildfires, and a federally funded push to build more data centers to facilitate artificial intelligence growth.

The ABC’s number is a conservative estimate, the trade group warned.

“Worker shortages could be more severe than predicted in 2025,” ABC Chief Economist Anirban Basu said in a statement.

The model that ABC used to predict how many new workers may be needed included a forecasted construction spending increase of less than 3% this year. However, that same forecast has significantly underestimated growth for the past three years running, the group’s experts warned.

Labor availability in the construction industry has increased in recent years, ABC said, primarily because higher interest rates have slowed construction spending. But changes to interest rates may not necessarily change developers’ abilities to unleash a torrent of new buildings.

“If inflation dissipates in coming months, borrowing costs will subside and construction volumes will increase,” Basu said. If construction spending picks up, the industry could need as many as 499,000 new workers in 2026.

That could result in some construction projects becoming impossible due to cost, ABC warned. The industry’s average hourly earnings have already increased by 4.4% over the past 12 months, outpacing earnings growth in other industries.

If more competition for labor enters the market, “industrywide labor cost escalation will accelerate, exacerbating already high construction costs,” Basu said.

The construction workforce is now younger than it has been for over a decade, with a median age of below 42, potentially slowing the pace of retirement. But contractors will still struggle to fill jobs, Basu said, especially in areas where large manufacturing projects and data centers are under construction.

Immigration has also added to labor supply, but federal policies could soon change that, ABC said.

“Faster-than-expected immigration over the past few years has also bolstered labor supply, and potential changes to immigration policy will likely constrain worker availability,” said Basu.

ABC President and CEO Michael Bellaman said he believes that President Donald Trump could make some allowances that would facilitate the construction industry’s goals. The trade group will seek to create a visa system that allows foreign laborers to work in the construction industry, he said.