If the mass deportation plan promoted by President Donald Trump is carried out, it will cause a loss of 55 billion dollars in the construction industry in the coming years, Nico Palesch, senior economist of the Oxford Economics industry, warned.
“Deporting half of undocumented construction workers will reduce construction growth by half until 2028. This implies a loss of production of more than 55 billion dollars if mass deportations are carried out,” he said.
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He said that one in seven employees in the construction industry in the United States is undocumented, which is in line with other estimates, said the analyst.
He recalled that in the agricultural sector one in 10 workers is undocumented, which is a risk to the US economy.
Labor costs are one of many of the construction sector and the National Housing Constructor Association estimates that paid salaries represent almost a quarter of the final price of a new home.
He added that the reduction of labor will generate greater competition, which will increase the direct wages of workers, as well as the contracting and retention costs for companies.
“Salaries per hour increased 4.4 percent year-on-year in the fourth quarter of 2024, a percentage point rather than the average quarterly increase observed before the COVID-19,” he said.
The salary increase of construction industry workers “is already substantially greater than (what registered in the economy in general),” he added.
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Despite the efforts to stop undocumented immigrants, deportations with Trump have advanced at a slower pace than during the Joe Biden government.
“While a successful campaign of mass deportations from the United States is not part of our base forecasts, it represents a substantial downward risk, since it would probably increase costs and deplete demand,” said Sebastien Tillett, an industry economist in Oxford Economics.
He said that the decrease in labor offer will press wages and costs, which will result in higher prices for consumers.
The sectors that cannot find substitute workers or transfer costs to consumers will probably also suffer production losses.
“A deportation campaign that eliminates even 50 percent of this workforce could lead to a significant scarcity of labor and reduce the growth rates composed of half during the Trump government,” said Oxford Economics.
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