Which states will lead the construction recovery?

Twenty states account for more than 75% of the U.S. construction market. Find out which state is projected to lead the recovery.



Led by California and Texas, 20 states account for more than 75% of the U.S. construction market, states a report by Reed Construction Data . The projected recovery in the construction market early next year must be driven by a significant improvement in a large share of these key states. A pickup in construction activity in the 30 smaller states would not be sufficient to set off a national market recovery. The strongest regional economies and the construction markets that have held up best are in the smallest states, such as Wyoming and the Dakotas.
The 20 key states include several that have weathered the recession very well, such as Texas, Maryland, and Virginia. The list also includes the fives states that have experienced the most severe recession: Nevada, Arizona, Michigan, Florida, and California. These 20 states have the largest amount of construction GDP in the state GDP estimates for 2005-08.
State construction activity is set by local economic conditions, the status of local public finances and vacancy rates, a trailing indicator of previous economic conditions, and random development decisions. But this model has some exceptions. The large gains in construction starts over the last year in Virginia and Maryland reflect the long commitment to start cycle for federal projects. The pickup in starts in Nevada has to be interpreted as developer's folly. The large gains in Illinois and Indiana appear to be a rebound from the very nearly start of the recession in the industrial Midwest.
Read the full report.

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