Full Breakdown
Construction Slowdown in Washington State: Economic Implications and Challenges
9/26/2025, 10:40:13 PM
Overview of the Construction Slowdown
The construction industry in Washington State is experiencing a significant slowdown, attributed to a combination of higher tariffs and stringent immigration policies. Ken Simonson, the chief economist for the Associated General Contractors of America, highlighted these concerns during a recent presentation to contractors in Spokane. He noted a marked decline in construction employment and spending, with Washington being particularly affected compared to other states.
Key Economic Indicators
Simonson reported that construction employment in Washington has decreased by 5% since the onset of the COVID-19 pandemic, contrasting with a national increase of 9% in construction jobs. A survey indicated that approximately 89% of construction businesses in the state have job openings, yet many are hesitant to fill these positions due to uncertainty surrounding project funding and regulatory changes. The Spokane metro area alone has seen a 7% drop in construction jobs since the pandemic began.
Impact of Federal Policies
The slowdown is largely attributed to shifting federal government priorities under the Trump administration. Simonson emphasized that ongoing trade negotiations and court challenges related to tariffs have created an environment of uncertainty, causing project owners to delay decisions. He stated, “All of these things are making owners say, ‘Wait a minute. We can’t go ahead with the intended project until we know what the law and funding, and so forth, is actually going to be.’”
Labor Market Dynamics
The labor market in Washington's construction sector has also shifted. While previously there was a shortage of skilled workers, current conditions have led to an abundance of available labor. Simonson noted that construction is particularly reliant on foreign-born workers, who comprise 27% of the workforce in the state. Changes in immigration policies have directly impacted labor availability, with 25% of construction firms in Washington reporting that their subcontractors have lost workers due to these policies.
Criticism of Current Trends
Critics argue that the combination of federal immigration policies and tariff increases is detrimental to the construction industry. Simonson pointed out that construction is twice as dependent on foreign-born workers compared to the overall economy. He warned that the loss of workers could lead to increased costs for projects, as firms struggle to replace lost labor.
Future Outlook
Despite the challenges, there are some signs of potential recovery. Simonson mentioned that multifamily housing construction, which had previously seen a 20% decline, is showing signs of improvement with a recent uptick in permits. He suggested that while the construction market is not expected to return to its previous boom levels, there may be gradual improvements beginning in early 2026.
Verbatim Quotes
- “There is little that is going to make things positive for construction in the next year.” — Ken Simonson, Chief Economist, Associated General Contractors of America
- “If you’re losing workers, obviously your costs for overtime or replacing the workers, or getting the project finished – those costs would get much higher.” — Ken Simonson
Conclusion
The construction industry in Washington State is facing a multifaceted slowdown driven by federal policy changes and economic uncertainties. While there are challenges ahead, particularly regarding labor availability and project funding, there are also indications that certain sectors may begin to recover in the near future.
