Economy Watch: Construction as Share of GDP Increases in Most States
- Aug 19, 2016
The value of the private construction industry as a percentage of gross domestic product increased in 30 states and decreased in only six in 2015, according to a report released this week by Associated Builders and Contractors. Nationally, construction’s direct contribution to GDP increased by 0.1 percentage points from 2014 to 2015 to 3.9 percent.
Despite the energy slump, construction accounted for the highest percentage of state GDP in North Dakota at 7.6 percent in 2015, down from 7.7 percent in 2014. Hawaii’s construction industry made the second largest contribution to state GDP at 5.9 percent, with an increase of 0.5 percentage points from 2014, the largest year-over-year improvement of any state.
Six states—Arizona, North Dakota, Mississippi, Oregon, West Virginia and Wyoming—saw a decrease in construction’s percentage of GDP from 2014, ABC reported. The states with the lowest share of construction in their GDP were New York and Connecticut, both at 3.1 percent for the third year in a row.
The industry continues to experience growth following the Great Recession, led by investment in lodging, office, manufacturing and multifamily construction, noted economist Bernard M. Markstein, president & chief economist of Markstein Advisors, who conducted the analysis for ABC. “The recovery is being led by consumers who have benefited from improved job markets, increased income and low energy prices, and who are spending their increases in disposable income.”