The construction industry has always been an exciting and challenging one, and one of the biggest factors in your success as a company is knowing where to bid. Understanding where the job offerings are hot and where you have the greatest chance to put in a bid is your best shot at growing your company and staying ahead of the competition. Knowing the best states for construction jobs, however, is just one facet of success. You also need to be aware of the rules and regulations regarding taking a job in a given state, including that state’s Little Miller Laws.
The hottest states for construction projects can change from year to year. That’s why it’s so important for a construction company to constantly keep abreast of changes in the market and keep sight of the most current trends. With that in mind, let’s check out the 10 best states for construction jobs this year and find out how you can get a leg up on the competition.
2019 Construction Industry Numbers
The first step in preparing your company to move ahead of the game in 2019 is to understand where the construction industry stands by looking at statistics and trends over the past few years. The construction industry is among the most profitable industries and the highest generators of revenue in the world, and the U.S. market is among the largest. In the United States alone in 2017, the industry topped $1.23 trillion in spending, and global costs are expected to continue to rise by about 4.3% on average.
Currently, the construction industry accounts for about 4.1% of the nation’s gross domestic product and employs 5.3% of the total workforce of the nation. By 2021, construction equipment rental scales are expected to top nearly $60 billion. Fifteen percent of these rentals are currently for individual construction projects, and equipment rental makes up more than 47% of all revenue in the industry. On average, construction equipment is rented for about 6 days.
Construction accounts for somewhere around 7% of the U.S. GDP. It is expected that construction in the west will continue to grow by measurable numbers, with over half the construction in the U.S. occurring in only 20 cities. The average backlog for general contractors is hovering right around 9 months or slightly over. This is indicative of a stable and healthy market, as well as one with room for growth.
Top 5 Construction Projects This Year
So far in 2019, there have been a number of high profile construction projects, and the top 5 have been focused in four states. These projects include the LaGuardia Airport Construction Project, the O’Hare Airport Construction Project, the Second Avenue Subway Construction Project, the Sound Transit 3 Construction Project and the California High Speed Rail Construction Project.
The four states focused upon in these construction projects are New York, California, Illinois and Washington. Interestingly, two are airport construction jobs and three are subway, metro or railway construction projects. This shines something of a light on the nature of the projects being attempted at the highest levels, though residential, private and commercial construction are all still quite popular across the country and, taken together, form a significant chunk of construction work.
Top 10 Best States for Construction Work
Almost 60% of the total construction project work in 2019 is concentrated in just 10 states, based on over 11,000 countrywide construction projects tracked by analytics firm GlobalData. The key highlights of GlobalData’s study indicate that California is the highest in both the number and value of projects, with 1,302 projects that collectively total $524.6 billion in value.
The top 10 largest projects in California alone are valued at $139.5 billion. Six such projects involve transportation infrastructure, and two are related to utilities and energy. The single largest project in the United States construction pipeline right now is the California High-Speed Rail Line, which is valued at $79 billion. Infrastructure and mixed-use developments together represent 56% of California’s total construction pipeline in value.
Behind this, energy and utilities projects dominate the nation, with Texas leading the pack in the number and value of utilities and energy projects in the pipeline at $152.7 billion. Next up come mixed-use and infrastructure projects, which total $135 billion together.
Illinois is also seeing a number of major contractors taking on large projects. These include a modernization project for Chicago’s Red and Purple Lines that’s valued at $4.7 billion, and the construction of a new Tuscola Fertilizer Plant.
Following Texas, New York has 894 projects that value $409 billion, a full 63% of which are still in pre-execution and current execution stages as of May 2019. The other best states for construction that fall into the top 10 include Florida, Louisiana, Virginia, Washington, Pennsylvania, and Georgia.
Mixed-Use Development Boom
The report also indicates that mixed-use developments are experiencing a boom across the nation. Suburbs and city centers are becoming less distinct because the demands of home-buyers and consumers alike are changing. This is especially true in states like New York, California, and Florida. The latter, in fact, has seen a major boom in such properties, faster than any other states. Five of the largest construction jobs in Florida right now are mixed-use properties.
This comes down to an increasing desire to work, play, live, shop, dine and have all of the amenities you like available within walking distance of the home. Such neighborhoods are attractive to everyone from boomers to millennials and beyond, all of whom are looking for well-connected, networked communities.
The technology industry is central to the U.S. economy these days, and that sector is also creating a strong demand to build connected communities that combine residential and commercial opportunities, plus transportation infrastructure that can handle daily commuters. The industry is seeing big companies, including Amazon, Apple, Facebook, Google, Microsoft, and others, encouraging investment into infrastructure support.
California has seen two such projects in Facebook’s Willow Campus development, valued at $850 million, and the Google Mountain View Residential Development, valued at $800 million. Washington has seen Microsoft tackle similar development with a $1 billion redevelopment of their Redmond Headquarters. Microsoft’s project, in particular, is bringing together a number of major contractors.
Metropolitan Statistical Area Growth
A lot of the growth in the construction industry this year is focused on metropolitan statistical areas. For the reasons discussed above, metro areas are becoming extensions of the downtown areas, with the lines blurred between traditional suburbs and urban living areas. Some of the metro regions with the highest number of residential and commercial developments fall outside of the top 10 states, but they may present unique secondary areas for contractors to look for work.
These include the Phoenix-Mesa-Scottsdale, Arizona, area, the Las Vegas-Henderson-Paradise, Nevada, area and the Bend-Redmond, Oregon, area. With the exception of Oregon, these states do fall into the top 20 best states for construction in the nation this year, so they also make a good bet for those trying to stay competitive in the industry.
A total of 6,645 construction projects are currently in the ongoing and planning phases in the megacities of the world, and these projects amount to $4.2 trillion the world over. It’s predicted by the United Nations that the percentage of people around the world living in cities with a million inhabitants or more will reach 27% by 2030. The number of cities in the world that are considered megacities is expected by that time to grow to 41 from 31. In the United States, such megacities currently include a number in the top 10 best states for construction, including New York City, Los Angeles, Chicago, San Francisco, Miami, Houston, and Seattle.
Winning Bids: Staying Competitive
Regardless of a stable market that looks to continue fairly healthy growth, there are always challenges to overcome. These issues include technology integration and development, a shortage of skilled labor, increasing costs of materials, growing competition, growing demand for green construction and meeting the improving compliance and safety requirements.
In terms of technology integration, software packages that aid in contractor management efforts, project management, building modeling, and even drones stand to be used on an increasing basis in the future, and companies need to adopt this technology to stay competitive. It will allow you to better pinpoint where to focus your efforts in an ever-competitive market. With the costs of materials increasing and labor shortages to deal with, you’ll also need to know where to bid in order to get the most out of your projects and corporate growth. Environmental sustainability, too, will be directly affected by where you bid and build.
Major Construction Technology Trends in 2019
One of the most important aspects of landing your bid is tracking the trends in construction so that you are always up to date on what your clients are looking for in a company. Staying on top of industry trends allows you to stay ahead of the game, keeping your technology, methods and best practices current. Among the most important industry trends in 2019 is technology to improve your efficiency.
Technology trends this year include blockchain technology, drones, augmented reality, mobile apps, building information modeling, construction management software and prefabricated construction. Each of these provides its own unique benefits to take your bid to the next level, and as you look to bid in competitive regions where the most high-value projects are taking place, the more technology you have to leverage, the more likely you’ll be to land that bid.
Technological trends this year include the use of blockchain technology to provide a faster workflow that is at the same time more secure. This will not only increase your productivity, but it will also increase customer confidence in a world where data breaches are a legitimate concern. Such technology — also called smart contract technology — allows you to buy, track and pay for services in a single, shared system that integrates with your product management to give you all-in-one tracking. You can set and enforce rules and deadlines, close out your projects faster, automate your supply chain and, most importantly, increase your security.
The use of drones is another important technology that is growing at an accelerated rate in 2019. In fact, drone use is increasing by 239% per year. This technology, properly used, allows you to map large areas, provide thermal imaging maps and acquire real-time data that is actionable, which allows you to make decisions quickly and streamline the process.
Augmented reality is still an up-and-coming technology, but it continues to grow and provide unexpected uses in a variety of sectors, including the construction industry. Wearable AR technology allows for 3-D visualization of products in a virtual setting, automatic measurements, realistic simulation of proposed changes to structures and architecture and even improved safety training with simulated hazards.
We live in a mobile world, and mobile apps are the future. There’s no way around the fact that mobile applications, for a full 80% of construction professionals, are at the top of their priority list. These apps allow you to improve efficiency and accountability, using your phone camera to generate accurate measurements of spaces, conduct real-time inspections and more. If you haven’t adopted mobile connectivity, you will find yourself at a disadvantage in the future.
BIM, or Building Information Modeling, is helping leaders in the industry to become standouts of efficiency. You can use this technology to generate computerized representations of utilities and buildings, enable prefabrication of parts, increase your budget management and more. These technologies take traditional CAD to the next level, vastly increasing the capabilities at your fingertips.
Construction management software is essential to remaining competitive in this day and age. It allows you to become a master of operational efficiency. Each construction management package has different functions and features, and you’ll need to settle on one that meets your needs. The best ones will tackle your whole project from start to finish, including data compiling, file sharing, budgeting, cloud storage, human resources, payroll and step-by-step project management.
Prefabricated and Modular Construction
Prefabbed construction has evolved quickly and is wildly popular these days, with some predictions being that it is going to grow by nearly 7% per year and reach $157 billion by 2023. This is because prefab buildings are, in some ways, an answer to the challenges of the skilled labor shortage and higher costs of materials. The quality of these buildings, and what is possible to achieve with them, has grown as well, even enabling green designs.
Knowing Your Market
It’s vital that you get to know your market before you bid on jobs in a given state. This is particularly true if you’re looking to branch into new areas. Knowing your market starts with understanding the laws regarding certifications and especially surety bonding in the region in which you will be bidding a job. Little Miller Acts, based on the Federal Miller Act, require that for any job on which you bid in a given state, you carry payment and performance bonds to secure the bid.
The amount of these bonds can vary widely from state to state, but it’s important to know that, in general, you are bound by the stricter of the Federal or State Little Miller acts. Be sure you understand the laws for bidding on contracts in the state where you’re looking to work, as well as any other unique municipal, regional or state requirements for working in the state.
If you need assistance in this area, National Surety Services can help. For over 25 years, we’ve worked to contract surety, providing second-to-none service in all aspects of surety bonding. We offer lightning-fast turnarounds, are completely results-oriented and service-driven and develop relationships with our clients that last for many jobs and many years. Give us a call to find out how we can help you.