Private construction can have a tremendous impact on a state’s economy. A new report by the Associated Builders and Contractors (ABC) ranks all 50 states based on their contribution to state gross domestic product.
In 1997 and 1998, construction accounted for 6.14% of national GDP. That number declined dramatically the following year and has risen slowly ever since. In 2013, the most recent year for this data, construction was 3.73% of national GDP. That number does not include related costs such as transportation, the demand for building materials, financial services or subsequent purchases from buyers. These additional costs add as much as 2 to 3% making construction even more significant.
On the state level, contributions to GDP vary greatly. The top 5 states, from highest to lowest, to benefit from construction are:
1. Mississippi – 5.9%
2. Hawaii – 5.6%
3. Louisiana – 5.5%
4. North Dakota – 5.5%
5. Montana – 5.4%
All of the top 5, except Hawaii, saw localized construction booms due to energy production. Not surprisingly, the Aloha State enjoyed a big jump in hotel construction thanks to a recovering economy and the return of tourism.
The 5 states at the bottom of the list were:
46. Ohio – 3.1%
47. Oregon – 3.1%
48. Connecticut – 3.0%
49. Michigan – 3.0
50. Delaware – 2.9%