In this article, we will take a look at the 20 best states for construction jobs in the US. If you want to skip our discussion on the construction industry, you can go directly to the 5 Best States for Construction Jobs in the US.
The construction sector serves as a significant indicator of economic activity, providing valuable insights into the overall health of an economy. Despite encountering challenges such as rising material costs and supply chain disruptions, the residential construction sector is experiencing a positive turn in 2023. According to Global Data, the size of the US construction market was $2.1 trillion in 2022. The report predicts a steady average annual growth rate of at least 4% for the next four years. The primary sectors within the US construction market include residential, commercial, industrial, institutional, infrastructure, energy, and utilities construction.
Homebuilder companies’ stocks are rising as investors anticipate Fed rate cuts. Earlier this month, the Federal Reserve indicated plans for three rate cuts in 2024. Furthermore, last week, mortgage rates dropped below 7% for the first time since August, which renewed momentum in the housing market. Popular builder stocks like Lennar Corp. (NYSE:LEN) and DR Horton (NYSE:DHI) have shown over 60% growth in 2023, while PulteGroup (NYSE:PHM) has risen by over 120%. You can check out the 13 Most Profitable Real Estate Stocks here. The positive shift in market sentiment is credited to the increasing demand for new homes, driven by buyer preferences and mortgage rate reductions that make new homes more appealing compared to used homes. This growth in demand is further supported by employment data. Unemployment in the construction sector, which reached its peak at 16.6% in March 2020, decreased to 4.8% in November 2023 after reaching 6.9% in January 2023.
Here's what Baron Funds said about Lennar Corp. (NYSE:LEN) in its Q2 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation (NYSE:LEN), and D.R. Horton, Inc. – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
According to the US Bureau of Labor Statistics, Wyoming, North Dakota, and Montana are identified as the best states for construction jobs on the basis of location quotient. The location quotient is a metric employed by the Bureau of Labor Statistics (BLS) to assess the level of concentration of a specific industry within a particular state in comparison to the entire nation. The industry's overall outlook is optimistic, and the construction sector is predicted to experience significant growth throughout 2024. With this context in mind, let’s see which state has the most construction work 2023.
20 Best States for Construction Jobs in the US
Aerial view of a construction site for a single family detached home.
Our Methodology
To identify the 20 best states for construction jobs in the US, we referred to the US Bureau of Labor Statistics for the latest state-specific data on location quotient and average annual salary. Location quotients are ratios that provide insights into an area's employment distribution by industry. A location quotient higher than 1 signifies that an industry holds a larger share of local area employment compared to the national average. The 20 best states for construction jobs in the US have been ranked in ascending order of their location quotients.
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20. Texas
Location Quotient: 1.14
Average Salary: $49,760
Texas ranks 3rd in the US in terms of population growth rate as of 2023. The average annual salary for construction workers in the state stands at $49,790. Texas emerged as one of the leading states in the construction industry, adding over 21,000 jobs in 2023.
19. Nebraska
Location Quotient: 1.16
Average Salary: $51,250
In 2023, the total construction value in Nebraska's economy amounted to $3.91 billion, with a corresponding Gross State Product (GSP) of $126 billion. The average annual salary for a construction worker in Nebraska stands at $51,250.
18. Arizona
Location Quotient: 1.16
Average Salary: $52,470
In 2023, the total construction value in Arizona reached $13.94 billion, while GSP stood at $136.2 billion. Despite the challenges in construction growth, Arizona maintained a 5-year average annual employment growth rate of 2%. Real estate and rental and leasing are amongst the top employment segments for the state.
17. Vermont
Location Quotient: 1.17
Average Salary: $52,062
The total construction value in Vermont amounted to $893.91 million in 2023, experiencing an annual growth of 1.3%. The GSP for the same year reached $30.2 billion. However, Vermont faced a challenge in employment growth, with a 5-year average annual rate of -1%.
16. Oklahoma
Location Quotient: 1.19
Average Salary: $49,820
The GSP of Oklahoma for 2023 was $195.2 billion, while the value of total construction was $4.4 billion. This was a decrease of 6.4% on an annual basis, while the five-year annualized decline was 4.5%.
15. Hawaii
Location Quotient: 1.19
Average Salary: $77,850
The contribution of total construction to Hawaii amounted to $2.64 billion. The five-year annualized growth for construction experienced a decline, contracting by 7.5%. Despite these challenges, Hawaii's GSP remained at $76.5 billion.
14. Washington
Location Quotient: 1.22
Average Salary: $73,140
With a GSP of $577.2 billion, the value of the construction sector in the state was $21.28 billion in 2023. The five-year annual growth rate for the construction sector in the state was 3.7%. Meanwhile, the average annual employment growth rate for the state was 1%.
13. Colorado
Location Quotient: 1.24
Average Salary: $57,430
The contribution of the construction sector to Colorado’s economy was $17.41 billion, while the total GSP was $371.3 billion in 2023. This was an increase of 0.9% year on year. Over the past five years, the average annual employment growth rate in the state was 1.4%.
12. Maine
Location Quotient: 1.26
Average Salary: $52,350
Maine is at the twelfth position on our list of the 20 best states for construction jobs in the US. The average annual salary for a construction worker in the state is $52,350. Maine's GSP in 2023 was recorded at $65.5 billion.
11. South Dakota
Location Quotient: 1.33
Average Salary: $47,170
In 2023, South Dakota's GSP amounted to $50.5 billion. The construction sector contributed $1.43 billion to the GSP, experiencing a negative growth rate of -3.1% for the year. Over the past five years, South Dakota had an average annual employment growth of 1.0%.
10. Nevada
Location Quotient: 1.34
Average Salary: $61,570
Nevada is among the top 10 best states for construction jobs in the US. The value of total construction in Nevada was $9.08 billion during 2023, with an annualized 5-year growth rate of 0.4%. The GSP for the same period was $170.1 billion.
9. Louisiana
Location Quotient: 1.43
Average Salary: $50,350
Louisiana’s GSP was recorded at $219.1 billion for 2023. The construction sector contributed $7.08 billion to the GSP. The state experienced a five-year average annual employment growth of -0.4%.
8. West Virginia
Location Quotient: 1.47
Average Salary: $52,740
The GSP of West Virginia for 2023 was recorded at $71.7 billion, with an annualized 5-year growth rate of 0.1%. The contribution of the construction sector to the GSP was $2.28 billion. The state experienced a five-year average annual employment growth of -0.4%. The major employment sectors in West Virginia include mining, healthcare and social assistance, and manufacturing.
7. Idaho
Location Quotient: 1.48
Average Salary: $49,620
Idaho is amongst the fastest-growing US states in terms of population. Idaho’s gross state product for 2023 was $85.7 billion, with an annualized 5-year growth rate of 15.3%. The contribution of the construction sector to the GSP was $3.71 billion in 2023. The five-year growth rate for the construction sector in the state is 4.1%.
6. Utah
Location Quotient: 1.52
Average Salary: $52,380
Utah is the fastest-growing US state in terms of GSP and the second in terms of population growth. Its GSP for 2023 was $185.2 billion, with an annualized 5-year growth rate of 3.7%. The contribution of the construction sector to the GSP was $11.83 billion during 2023. Over the five-year period, the construction sector achieved a growth rate of 5.9%.
Lennar Corp. (NYSE:LEN), DR Horton (NYSE:DHI), and PulteGroup (NYSE:PHM) are some of the popular builder stocks contributing to the growth of the construction industry.
