US construction activity remains heavily concentrated in just a few states, and indicators through the first three quarters of 2025 show that concentration continuing to grow rather than spreading more evenly across the country, according to an analysis of federal data by ENR.
Permit activity and construction employment through 3Q 2025 continue to favor the same dominant markets that already account for the majority of completed construction activity. These trends reinforce a pattern visible in the most recent fully reconciled data, which show that more than half of all US construction value added in 2024 was generated in just 10 states.
These states (California, Texas, Florida, New York, Georgia, North Carolina, Pennsylvania, Illinois, Ohio and Virginia) form the core of US construction activity and continue to lead the national pace.
Directional indicators available through August 2025, the last month government data is current, including construction permit valuation data from the US Census Bureau and state-level construction employment data from the US Bureau of Labor Statistics, show that the same markets continue to dominate, reflecting structural advantages such as labor depth, infrastructure readiness and availability of energy
Unlike many construction market assessments that rely primarily on project announcements, backlog surveys, or permit submissions, the analysis here focuses on construction value added, a measure reported annually by the U.S. Bureau of Economic Analysis (BEA) that reflects construction’s contribution to gross domestic product through completed residential, nonresidential, and infrastructure activity.
Construction value added captures where labor, capital and materials are ultimately deployed, providing a reconciled view of construction activity that highlights competitive pressure and delivery capacity. By 2024, construction value added totaled about $1.31 trillion nationwide, measured in today’s dollars, and was far from evenly distributed.
Directional indicators through the third quarter of 2025 show whether major construction states are strengthening, stabilizing or moderating relative to their 2024 construction output levels. “Strengthening” indicates that permits, employment and pipeline signals continue to support existing activity rather than pointing to a near-term pullback.
For purposes of this analysis, states are classified as “strengthening” when both permit valuation and construction employment increased year over year, “moderating” when both declined, and “stable” when the indicators move in opposite directions. Directional indicators are used to assess momentum rather than measure actual production.
The dominance of certain states reflects more than population growth or short-term project cycles. Capital-intensive construction sectors have amplified existing advantages, particularly in data center construction, which requires continuous and huge power loads, extensive site preparation and complex permitting.
Instead of redistributing construction activity by creating entirely new centers, hyperscale and colocation projects have flowed to states that are already capable of supporting these scale requirements.
Energy availability, however, is only part of the equation. Labor capacity further limits the extent to which large-scale construction activity can be extended. States with deeper construction labor are better positioned to absorb increases in industrial, infrastructure, and energy-intensive construction without immediately putting pressure on schedules or prices.
This combination of labor depth and delivery experience narrows the field of states capable of sustaining waves of capital-intensive construction activity.
This dynamic helps explain why Sun Belt states now account for a substantial portion of the nation’s largest construction markets. Only Texas, Florida, Georgia, North Carolina and Virginia account for half of the top tier for construction value added.
At the same time, several legacy industrial states continue to play an outsized role. New York, Pennsylvania, Illinois and Ohio remain among the nation’s largest construction markets despite slower population growth, supported by dense transportation networks, institutional construction, public works programs and long-established labor groups.
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Their continued presence complicates a simple Sun Belt versus Rust Belt narrative and underscores the enduring importance of infrastructure maturity and construction deliverability.
Looking ahead, the challenge for contractors and designers heading into 2026 is less about identifying where demand is than competing in markets where construction capacity is already concentrated.
In states dominated by completed activity, margins, labor availability, and execution risk are increasingly shaped by congestion rather than shortages, raising the stakes for workforce strategy, partner selection, and project sequencing.
