A new report from Twisted Nail, a Waco, Texas-based construction aggregate supplier, reveals that while states like California, Florida, and New York continue to report high levels of commercial construction spending, they are being outpaced on a per-capita basis by rapidly growing states in the South and Southwest.

According to the report, Texas leads the nation in commercial construction spending at nearly $90 billion annually, more than double any other state. Meanwhile, Arizona ranks No. 1 in per-capita spending, signaling a significant shift in where commercial construction dollars are flowing.

“The findings underscore the contrast between populous states such as New York, California and Florida to fast-growing states in the South and Southwest, particularly in sectors benefiting from recent economic and policy shifts,” the report states.

Growth Driven by Federal Incentives, Manufacturing and Population Boom

The surge in spending is largely driven by investments in clean energy, semiconductor production, and advanced manufacturing — industries that have seen a dramatic increase in funding and activity due to federal legislation and private sector interest.

“The report identifies a commercial construction spending surge across the Sun Belt, fueled by federal incentives, manufacturing investments and population growth,” it notes. This aligns with recent trends showing how the Inflation Reduction Act, CHIPS Act, and other federal programs have boosted domestic industrial projects.

States like North Dakota and Idaho also rank high in per-capita construction spending, driven by large-scale developments including semiconductor facilities and data centers. This trend indicates that even smaller states are capitalizing on federal dollars and corporate investment to build out advanced infrastructure.

Total Commercial Construction Spending Hits Record High

Commercial construction spending across the U.S. has bounced back significantly since the pandemic, reaching unprecedented levels.

“Nationally, commercial construction has strongly rebounded since the depths of the pandemic in 2020 and 2021, reaching over $740 billion by early 2025. That’s about the highest level in more than two decades,” the report says.

Leading the charge is manufacturing construction, which saw a 135% jump in inflation-adjusted spending since 2019, thanks to policy support for reshoring production. Warehouse construction followed with a 42.7% increase, and automotive facilities expanded by 47.6%.

Meanwhile, health care and food-related construction have seen more modest, steady growth. Office and lodging projects, however, have not yet returned to pre-pandemic levels, reflecting ongoing shifts in work and travel habits.

Top States by Investment

According to the report, the top 15 states in total commercial construction investment include:

• Texas ($89.7 billion annually)
• California
• Florida
• New York
• Arizona
• North Carolina
• Georgia
• Ohio
• Tennessee
• Indiana

In per-capita rankings, Arizona takes the top spot, followed by North Dakota and Texas. Other high-ranking states on a per-person basis include Idaho, South Carolina, and Utah — all of which are benefiting from industrial diversification and a growing labor force.

“Arizona leads the nation in per-capita spending, followed by North Dakota and Texas,” the report says.

Not All States Are Growing

While many states are seeing significant increases in construction activity, a few are bucking the trend. The report highlights that Hawaii and Louisiana experienced sharp declines in commercial construction spending, falling 52.1% and 33.8%, respectively, over the past five years. This drop may reflect economic challenges, shifting investment priorities, or limitations in labor and logistics.

Outlook for the Industry

As commercial construction spending continues to concentrate in states with strong industrial and manufacturing growth, stakeholders in slower-growing regions may be prompted to revisit economic development strategies. The rise of clean energy, semiconductor fabrication, and logistics infrastructure in the South and Southwest suggests that the next generation of American industry may be taking root far from traditional powerhouses.

Originally reported by Sebastian Obando in Construction Dive.