“It looks like it’s going to be a continuation of some of the highest increases we’ve seen over the last 15 years,” he says. “Even with inflation having subsided, we’re still seeing these larger increases. At the end of the year, we’re likely going to be between 4.6% and 4.8% again.”

Between 2009 and 2021, first-year increases averaged at or below 3%. Faced with inflationary pressures and increased cost of living, averages jumped to 4.7% in 2022. Peters says that multi-year settlements—which are typically three years—can create a compensation “lag effect.” This year, negotiated increases may be larger to make up for pay adjustments that were below cost of living metrics during the terms of a contract, according to CLRC. In some cases, that could mean significant bumps in compensation. Peters notes that in 2022, a significant number of settlements came in below 1%, with some below 0.5%. So far this year, the lowest first-year settlement is 2.4%.

Still, some trades are scoring larger settlements than others. In the first half of the year, CLRC data shows that seven trades were at or above 5%, including electricians (5%), carpenters (5.1%), plasterers (5.2%), teamsters (5.4%), glaziers (5.4%), pipefitters/plumbers (5.6%) and insulators (5.8%). At the low end are roofers (3.9%), painters (3.9%), millwrights (3.9%) and iron workers (3.4%).

Regionally, the Northwest, which includes Alaska, Idaho, Oregon and Washington, continues to negotiate some of the highest increases in the county at 5.7% in the second quarter compared to 5.2% at the end of 2024. Although the Northeast continues to see some of the lowest increases in the nation, average settlements have jumped this year from 3.8% in 2024 to 4.6% in the first half of this year.

Anthony Lancia, vice president of labor relations at the Associated General Contractors of Missouri, says he’s seen similar trends. Over the last two years, settlements have ranged from 3.7% to 4%, depending on the trade.

“Over the past two years, our contractors have worked together with our labor partners during negotiations to overcome inflationary pressures for craft workers within our settlements, while keeping our industry competitive for the owners they serve,” he says. “Going forward we believe that market demands should drive settlement packages.”

Even if cost-of-living increases becomes less of a factor in compensation discussions, high demand for labor remains. In August, the unemployment rate for construction was 3.2%, a full point below the average for all workers in the United States, according to the U.S. Bureau of Labor Statistics. That matches the 3.2% construction unemployment rate from August of last year.

Merit shop workers are seeing similar trends. Firms that gave wage increases last year offered an average bump in pay of 4.3%, according to the 2025 Merit Shop Wage and Benefit Survey, conducted by PAS. Jeff Robinson, president of PAS, says he anticipates that wages for craftspeople could soften a bit this year, likely dropping to around 4.1%. He notes that a slight decrease would stand in contrast to other industries, where higher unemployment is more of a factor.

“I’m not as negative as a lot of people in other industries,” he adds. “Yes, we are coming down a bit, but it’s not doom and gloom.”

Robinson notes that some trades are still seeing big bumps in pay, including electricians, which averaged 5.2% in 2024. “That’s easy to understand when you see all that’s been happening in the industrial sector and with power systems and data centers,” he adds.

Although merit compensation may be holding steady or even a bit soft, Robinson says employers are helping offset cost-of-living challenges by increasing per diems. Last year, per diems rose by an average of 12%, according to PAS data. Robinson notes that per diems are an effective way to raise total compensation without committing to a base pay increase. “If you look at some projects in the Gulf Coast, they are talking about $150 per diems,” he adds. “That is a big deal.”