The construction industry added 11,000 jobs in June, signaling continued momentum in a sector that has struggled with workforce challenges for years. However, the Associated General Contractors of America (AGC) quickly tempered optimism with a stark warning: these employment gains could evaporate without congressional action to renew highway funding and infrastructure investment.
For contractors who rely on excavation work, sitework, and the steady flow of fill dirt and aggregate materials that highway projects demand, the message is clear—enjoy the current hiring environment while it lasts, but prepare contingency plans if federal funding stalls.
Breaking Down the June Employment Numbers
According to Bureau of Labor Statistics data released in early July, construction employment reached a new milestone with the addition of 11,000 positions in June. This growth continues a trend that has seen the industry slowly recover from pandemic-era setbacks and navigate persistent labor shortages that have plagued contractors across all specialties.
The June gains were concentrated in several key subsectors:
- Heavy and civil engineering construction: Added 4,200 jobs, driven primarily by ongoing highway and bridge projects
- Specialty trade contractors: Gained 3,800 positions, particularly in excavation and sitework operations
- Residential construction: Added 2,100 jobs despite cooling housing markets in some regions
- Nonresidential building: Contributed 900 positions, reflecting steady commercial development
For excavation contractors and those specializing in earthwork, the heavy and civil engineering gains are particularly noteworthy. These projects typically generate the highest demand for dump sites, fill dirt sourcing, and material hauling—the bread and butter of many sitework specialists.
AGC's Highway Funding Warning: What's at Stake
Despite the positive June numbers, AGC officials issued a cautionary statement emphasizing that construction employment growth remains vulnerable to policy decisions in Washington. The organization pointed specifically to the uncertain future of highway funding as Congress debates infrastructure priorities and budget allocations.
"While we're encouraged by continued job growth in construction, particularly in infrastructure-related segments, the runway is getting shorter," said Ken Simonson, AGC's chief economist, in the organization's statement following the employment report. "Without a clear commitment to highway funding, we could see these gains reverse quickly as current projects wind down and new ones fail to materialize."
The Highway Trust Fund, which finances the majority of federal highway and transit spending, faces ongoing solvency challenges. Gas tax revenues have failed to keep pace with infrastructure needs, and congressional stopgap measures have become the norm rather than long-term planning. For contractors, this creates a boom-and-bust cycle that makes workforce planning extremely difficult.
Current federal highway funding authorization extends only through September of this year, meaning contractors face a potential cliff in project pipelines if Congress doesn't act. This uncertainty directly impacts contractor demand for equipment, materials, and most critically, skilled labor that takes months or years to train.
Labor Market Implications for Excavation and Sitework Contractors
The June hiring bump presents both opportunities and challenges for contractors specializing in excavation, grading, and earthwork. On one hand, companies currently have slightly more success finding workers to fill open positions. On the other, this may represent a brief window before project pipelines dry up if highway funding falters.
Contractors report that bid activity remains robust in the near term, with many firms booking work through late 2024 and into early 2025. However, visibility beyond that timeframe grows murky, particularly for firms that derive significant revenue from state DOT contracts and federally funded highway projects.
"We're hiring now because we have the work, but I'm not making long-term commitments," explained one mid-Atlantic excavation contractor who requested anonymity. "If the highway bill doesn't get renewed, I could be looking at laying people off by spring next year. That's not a position anyone wants to be in."
This uncertainty affects multiple aspects of excavation operations:
- Equipment investment: Contractors delay purchasing new machinery when project pipelines look uncertain
- Dump site contracts: Long-term disposal agreements become harder to negotiate without project certainty
- Fill dirt sourcing: Suppliers face unpredictable demand, potentially affecting availability and pricing
- Workforce development: Companies hesitate to invest in apprenticeships and training programs
The labor availability question cuts both ways. While construction employment gains suggest a slightly looser labor market, skilled equipment operators, grade checkers, and experienced foremen remain in high demand. Contractors who find qualified workers now may struggle to keep them if project work slows due to funding gaps.
Infrastructure Investment and Excavation Material Demand
Highway projects are among the most material-intensive in construction, generating massive demand for fill dirt, aggregate base, and requiring extensive excavation and disposal operations. A single mile of four-lane highway can require tens of thousands of cubic yards of earthwork, creating sustained demand for dump sites and fill material sourcing.
When highway funding flows consistently, it creates predictable cycles for excavation contractors. Projects are planned years in advance, allowing contractors to secure material sources, negotiate dump site access, and build the workforce needed to execute large-scale earthwork operations.
Conversely, funding disruptions create cascading effects throughout the excavation supply chain. Material suppliers can't commit to long-term pricing. Dump site operators face uncertain utilization rates. And contractors struggle to maintain crew sizes when project starts become unpredictable.
Industry data shows that heavy and civil engineering construction—the category including highway work—accounts for approximately 23% of total construction employment. This translates to more than 1.8 million jobs that depend either directly or indirectly on sustained infrastructure investment. For communities where highway construction represents a significant economic driver, funding interruptions mean more than just project delays—they mean lost paychecks and idled equipment.
What Contractors Should Do Now
\p>Given the uncertainty surrounding highway funding and the potential for employment gains to reverse, excavation and sitework contractors should consider several strategic actions:Diversify project portfolios: Contractors heavily concentrated in highway work should actively pursue commercial, industrial, and residential sitework opportunities to reduce dependence on federal funding cycles. While highway projects often provide the most volume, a balanced mix of work types creates more stable revenue streams.
Monitor legislative developments: Stay informed about congressional negotiations on highway funding. Organizations like AGC provide regular updates, and knowing when decisions are likely helps contractors time hiring and equipment decisions more effectively.
Strengthen material relationships: Use the current period of active employment and project work to build stronger relationships with fill dirt suppliers and dump site operators. These partnerships become crucial during uncertain times when flexibility and reliability matter most.
Invest in workforce retention: Rather than expanding payrolls aggressively, focus on retaining current skilled workers through competitive compensation, training opportunities, and clear communication about company outlook. It's easier to retain good workers through a slow period than to recruit them when work picks up again.
Maintain financial flexibility: Resist the temptation to overextend on equipment purchases or facility expansion until highway funding clarity emerges. Cash reserves and credit availability provide options if project pipelines tighten unexpectedly.
The June construction employment increase of 11,000 jobs represents genuine progress in an industry that desperately needs workers. However, AGC's warning about highway funding shouldn't be dismissed as mere lobbying. For contractors whose businesses depend on the steady rhythm of infrastructure investment, the coming months will reveal whether recent employment gains represent sustainable growth or merely a pause before an uncertain future.
Excavation contractors, sitework specialists, and anyone dependent on the movement of earth and materials would be wise to plan for multiple scenarios—continued growth if funding materializes, or rapid adjustment if congressional action falls short. In construction, the only certainty is that those who prepare for uncertainty tend to weather storms better than those caught by surprise.