Impact of ICE Raids on the Construction Industry

How can an entire sector already short of 439,000 workers withstand sudden workforce removal through immigration enforcement? In recent times, the U.S. construction industry has been facing unique challenges. This is mainly because Immigration and Customs Enforcement raids continue to disrupt projects across the nation.

In 2023, foreign-born on-site workers accounted for 25.5% of the total workforce in the U.S. construction sector. Targeted enforcement at various sites has contributed to mass detection, project delays, and intensified fear among field workers. This ultimately puts infrastructure delivery timelines and budget projections at risk.

Being aware of the evident impacts of these raids is critical for AEC businesses looking for resilient workforce strategies. 

The Scale of the Labor Crisis in the U.S. Construction Landscape

The U.S. construction sector entered 2025 needing more than 430,000 new workers to satisfy the expected project demand. This shortage relates to a persistent challenge that predates existing immigration enforcement initiatives.

It is a known fact that the industry lost around a million workers at the time of the Great Recession. What followed was that many never returned to the construction trades. This was the time since when a sharp decline among American nationals participating in the construction sector was noticed. As a result, workforce gaps kept exacerbating as senior workers approached retirement.

Another critical aspect to mention here is that native-born construction workers are over 500,000 below pre-Great Recession peak levels. This is despite continuous public and private initiatives to attract young Americans into skilled trades. Undoubtedly, immigrant workers have bridged this gap. Their numbers in construction reached a significant high of 25.5% in 2023.

During the same year, the construction workforce accounted for approximately three million foreign-born workers. According to the most recent American Community Survey, this was the highest number ever recorded.

The Migration Policy Institute has revealed that in 2025, out of about 11 million people living illegally in the U.S., roughly 1.4 million work in construction. 

Geographic Concentration and Vulnerability

Immigrant workers are primarily found in the necessary construction trades across the U.S. In California alone, over 40% of construction workers are foreign-born. In both Florida and Texas, this rate is 38%, and in New Jersey, there are around 40% immigrant construction workers. Such figures demonstrate how dependence on migrant labor extends beyond conventional gateway states.

These demographic concentrations lead to regional vulnerability when ICE raids take place. California and Texas combined represent 35% of all foreign-born construction workers across the U.S. New York and Florida collaboratively house another 18% of on-site immigrant construction workers.

So, when ICE raids target these areas, the effect echoes throughout the entire regional construction market.

Trade-Specific Labor Dependencies

ICE raids for immigrant workers on building sites have been increasing sharply as a result of the existing U.S. government’s expanding crackdown. However, it is critical to comprehend that these raids excessively affect particular construction trades where foreign-born workers predominate.

• Plasterers and stucco masons consist of 61% immigrant workers in the U.S.
• Drywall installers and tapers also include 61% foreign-born participation.
• Roofers and painters account for approximately 52% and 51% of migrant workers, respectively.
• When it comes to carpet, floor, and tile installers, the figure is about 45%.

These specialties encounter immediate disruption when ICE raids remove workers. This is because replacement labor needs extensive training, which naturally delays project completion.

Economic Influences and Project Disruptions

It is vital to acknowledge that ICE raids present immediate economic consequences for contractors and construction projects. For instance, essential university projects in San Antonio and Tallahassee struggled with sudden labor shortages following raids that detained hundreds of field workers. After this enforcement action, other construction work across many sites in the city halted as word spread through worker networks.

The number of unfilled job openings increased from 7.2 million to 7.8 million between January and March 2025. The construction sector made up a significant share of this rise. This was mainly because of the increasing ICE raids that removed a large section of undocumented migrant on-site construction workers. Economists have attributed much of this increase to companies looking to substitute undocumented workers with documented ones. This has further contributed to intensifying competition for restricted labor pools.

Besides, contractors have now become more prone to liquidated damages when deadlines slip. Replacing the detained laborers with union crews has the potential to augment labor wages significantly. On top of that, downtime and onboarding further enhance overhead costs.

Financial Consequences for Contractors

For contractors and construction companies, ICE raids result in several financial pressures.

• Immediately replacing labor is expensive for maintaining project schedules.
• Being exposed to contract penalties when projects fall behind because of workforce disruptions.
• Augmented insurance and bonding expenses as risk profiles alter with workforce instability.
• Costs related to legal compliance for improved I-9 auditing and employment verification systems.
• Overtime premium payments to prevailing workers covering for absent workers.

These increases in expenses happen while contractors face prevailing margin pressures from inflated material costs and supply chain disruptions.

Response of the Industry and Adaptation Strategies

As suggested by many experts, construction businesses have started incorporating defensive tactics to deal with immigration enforcement risks. Most of them are currently conducting holistic I-9 audits and training their respective management teams on appropriate employment verification procedures. There is another trend spotted among most of the contractors. They are now relying more significantly on subcontracting arrangements to disperse labor risk across several entities.

Cross-training initiatives have also gained appeal as firms look to establish more resilient internal workforces. Such programs allow existing workers to gather complementary skills. This diminishes dependence on dedicated labor that may become unavailable because of enforcement actions. In recent months, there has been an increase in demand for training programs that enable multi-skilled workers to become capable of transitioning between trades.

Long-Run Implications for the Industry

A clear understanding is necessary regarding ICE enforcement, creating enduring structural changes in construction labor markets.

• Speed up the adoption of automation as construction businesses look to curtail their dependence on manual labor.
• Amplified wages for remaining workers as competition strengthens for a shrinking workforce.
• Geographic project movement toward markets with a steadier labor supply.
• Greater emphasis on workforce development and apprenticeship programs.
• Improved reliance on prefabrication and modular construction to decrease field labor requirements.

These initiatives should be adapted to encourage reshaping how construction companies approach planning a project and its execution across all market segments.

Future Prospects and Industry Adoption

Construction industry analysts now expect this workforce challenge to continue as immigration enforcement policies are still in effect. The blend of prevailing labor shortages and enforcement-related workforce shrinkage establishes more pressure on project delivery proficiencies. Some experts anticipate that policy changes may take place ahead of the 2026 midterm elections. However, this could only happen if economic influences are severe enough along the way. 

Major players in the U.S. homebuilding landscape, including PulteGroup, Lennar Corporation, and Toll Brothers, have already implemented immigration enforcement risks into their annual reports. This is due to their acknowledgment of the feasible impacts on skilled tradespeople’s availability and project expenses. These firms depend considerably on subcontractors for labor and identify that more stringent enforcement could minimize workforce availability while boosting labor expenses.

Conclusion

Indeed, ICE raids are a critical challenge for the construction industry that has long been subject to chronic on-site labor shortages. Removing immigrant workers creates instant project disruptions and lasting structural alterations across regional markets.

So, construction firms need to adapt through optimized compliance processes, cross-training initiatives, and substitute project delivery methods. All of these have to be done while advocating for holistic immigration reform to resolve both security concerns and economic realities.

For AEC businesses dealing with these extraordinary workforce challenges, Uppteam’s remote design support services can offer a strategic way out. Our solution operates independently of immigration enforcement. With a team of 250+ architectural, BIM, and MEP specialists working 24/7 remotely, we can deliver high-quality design services without being exposed to labor market volatility. 

Collaborating with Uppteam for architectural drafting, BIM coordination, and MEP design assistance, construction businesses can sustain project momentum even when field workforce disruptions occur.