The invention discloses a method for automatically monitoring welding contraction deformation of a steel structure. An inventor conducts theoretical deviation through a displacement sensor to obtain contraction deformation computational formulas seen from formula (1) to formula (6) and sets up the automatic monitoring method according to the formulas. The method is simple in device, easy to operate, high in automation degree, free of manual interference and capable of lowering the labor intensity of people. Contraction deformation values in two perpendicular directions and a total contraction deformation value can be displayed in real time, and real-time grasping of stability and quality of the welding technology can be facilitated. The monitoring result is higher in accuracy compared with the monitoring result obtained through a conventional method, and the accuracy can reach 0.01mm. When the method is applied to the steel structure welding field, the contraction deformation can be accurately, automatically and dynamically monitored in real time, reliability and stability of the welding technology can be conveniently distinguished, and the requirements of the steel structure for the forming size, the appearance and the bearing capacity are beneficially met.