Every state has different operating conditions for construction contractors. Some have higher taxes, more regulations, or higher coverage requirements for contractor bonds (learn more from www.suretybondsdirect.com). Others have high wages for construction workers due to strong union protections and state labor laws.
And still others have geography and climate that are naturally friendly or problematic for construction contractors. Demand also varies widely by state. Many states, especially in the south and west, have a higher demand for construction contractors, thanks to population booms that require new homes and businesses.
And, naturally, the still-nascent COVID-19 recovery has complicated the situation for contractors around the U.S. who are facing uncertain conditions. But here, too, some states are doing better than others when it comes to getting the economy back on track.
If you’re a contractor considering which state will offer the best combination of factors for your business, here are eight states you should give serious thought to. Each one has something significant to offer a contractor who decides to locate their business there.
1. New York
At the intersection of high wages and high demand sits New York. The Empire State is packed with valuable construction projects in the residential, commercial, and industrial sectors alike. Workers can expect to command higher salaries in this state.
Even with the impact of the pandemic, construction spending is still expected to be higher than average. Don’t forget that New York is much more than the Big Apple—the upstate region is filled with active smaller markets, which can be great for contractors who want to work at a smaller scale.
Like many of its Sun Belt neighbors, the Lone Star State is growing quickly, and it needs construction contractors to create the homes and businesses that will power its future. Dallas and Houston are particularly active construction markets, and the Dallas construction industry maintained strong growth even during 2020 when many other construction markets were drying up.
Austin is also doing exceptionally well, ranking as one of 2020’s busiest residential construction markets and likely to continue experiencing strong growth for residential contractors in particular.
While the Land of Lincoln is technically losing residents, you wouldn’t know it from the volume of construction projects happening in the state and the opportunities for construction jobs. Highly educated and affluent workers continue to move to the Chicago area, which has been the number-one site for corporate relocations and expansions for most of the past decade and is beginning to recover in earnest from the pandemic. Contractors in Illinois should be prepared to operate in the state’s strongly union-focused infrastructure, which keeps wages high but can be a challenge to navigate.
Arizona is another strong competitor from the Sun Belt with high demand for construction. The state has consistently gained residents for most of the 21st century and, in some ways, its construction market barely took a hit from COVID-19. Phoenix, in particular, continues to pull in large developments that will help create a bright future for the state’s construction industry. Contractors in Arizona will always face challenges from the state’s brutal heat, but, with an equally hot market, many will see the trade-off as worth it.
Florida’s construction sector is bouncing back from a tough 2020, with the seemingly eternal appeal of the Sunshine State driving a wave of relocations from northern states like New York and New Jersey.
The slow COVID recovery of the tourism industry will likely continue to make conditions tough for contractors who work on hospitality projects, but other sectors like solar energy and residential construction are recovering more quickly. That makes Florida a strong candidate for contractors who are willing to shift their resources into new areas.
Ohio is an increasingly strong contender in the 21st-century economy, with large numbers of major projects slated to get underway in 2021. Columbus and Cleveland are two markets with big projects in the pipeline, and several major highway projects are also coming in the next few years.
In fact, despite sluggish or declining population growth in the state, the Columbus area has a critical housing shortage that’s creating high levels of demand for residential contractors. The Buckeye State’s long-term economic future is still a question mark, but it’s as good a time as any to start a construction contracting business in this American heartland.
Like Florida and other tourism-dependent states, Nevada’s economy took a significant hit from COVID-19, but things are beginning to look up for the Silver State’s construction contractors. First, the state’s population growth continued to expand in 2020 at the third-highest rate of any U.S. state.
Recent reports also show that Nevada’s skilled construction labor market is hot again, with contractors in Las Vegas seeking job applicants to build 11,000 or so residential homes this year. To maintain the recovery, experts say that Nevada needs to build out its infrastructure to ensure that it continues to attract new projects and businesses.
Despite a COVID-fueled slowdown in its population growth, the Golden State is still abuzz with major projects, and its demand for construction labor and contractors remains high. Tech companies continue to invest in California, with Google promising $1 billion in California projects in 2021 alone.
California residential contractors can also do well in a market that still has record-low housing stock, as long as they can make sure to acquire the appropriate construction contractor surety bonds and other credentials to navigate California’s heavily regulated industries.
All across America, construction contractors are well into their 2021 projects, hoping that this year will mark the beginning of a stronger new economy. Only time will tell what their future holds—but if you’re looking to make your mark as a contractor in 2021, the states we’ve discussed here are prime places to do it.