Federal dollars dedicated semiconductor chip manufacturing and battery production is helping lift construction worker wages. In March, construction spending grew 3.8% from a year earlier, according to new data from the U.S. Census Bureau . Fueled by an increase in commercial building , the sector remains booming . That’s good news for construction workers, who are still in short supply and commanding higher wages. But the resilience of this usually interest rate-sensitive sector makes the Federal Reserve’s goal of taming inflation that much harder. Commercial builders like O’Neill Construction Group in Portland, Oregon, have been booked up lately. “Everything from doing work at the airport to light rail to multifamily housing units, ” said the company’s president, Maurice Rahming. “Business has been extremely busy.” So busy, in fact, that “we are definitely having to say no at times,” he added. It’s companies like Rahming’s that are seeing this boom in construction spending — namely commercial and industrial building firms, according to Chad Moutray, chief economist with the National Association of Manufacturers. “This data is largely picking up as a proxy for reshoring and nearshoring in the U.S.,” Moutray said. He’s talking about all those dollars the Joe Biden administration recently dedicated to semiconductor chip manufacturing and battery production. Those warehouses and production factories need to be built, and that’s one reason construction firms are busy these days. But those firms are still paying a premium for labor, said Anirban Basu, chief economist at Associated Builders and Contractors. “The construction worker is becoming more expensive faster than in other segments, and that’s because they’re in such short supply and such high demand,” he said. And higher labor costs drive up the overall cost of construction. “It makes the fight on inflation that much more challenging,” Basu said. Typically, the construction workforce is one of the first to suffer amid higher borrowing costs, he added. But for now, that sector isn’t showing any signs of slowing.