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If you're wondering which state has the most construction work in 2026, Texas leads in total construction employment. California and Florida, previously top markets, both lost jobs over the past year. Meanwhile, states like North Carolina, Ohio, and Missouri are surging.
I work with contractors navigating expansion decisions every day, and right now, the Midwest and Southeast are where the strongest opportunities are.
Here, I'll break down the best states for construction jobs and business expansion, using December 2024 to December 2025 data from the Associated General Contractors of America (AGC) and the U.S. Bureau of Labor Statistics (BLS). We'll look at national trends, the top 10 states adding construction jobs, which states are losing ground, and where the highest construction salaries are.
The U.S. Construction Outlook for 2026
Construction businesses across the U.S. are navigating a year of steady demand with sharp regional differences. Three major trends are shaping the construction industry:
Federal infrastructure funding continues flowing into transportation, broadband, and energy projects.
Labor shortages continue to affect project timelines and wages for construction workers and skilled trades.
Population growth is reshaping local demand, especially in the South and Mountain West.
Construction activity is healthy overall, but location has never mattered more. According to the AGC, total U.S. construction employment reached 8.33 million in March 2026, up 57,000 (0.7%) year-over-year. But some states are attracting significantly more infrastructure projects than others, and the cost of doing business varies widely.
Industry Trends and Labor Market Projections
Federal initiatives, clean energy goals, and private sector investment are driving construction opportunities.
Ken Simonson, chief economist for the AGC, has described the past year as one of "uneven employment," with gains concentrated in nonresidential construction while residential hiring has lagged.
The BLS projects above-average job growth for construction occupations through 2034, especially in infrastructure and transportation projects, renewable energy developments, and tech-driven builds like data centers and advanced manufacturing facilities.
The industry is constrained by labor shortages and rising costs. Contractors who get ahead of these shifts by entering growth markets and securing qualified construction workers will be in the best position to scale.
Why State Selection Matters for Construction Businesses
Picking the right state can mean the difference between strong profit margins and constant setbacks:
Licensing requirements vary by state and can impact how fast you get started.
State-level incentives and tax structures affect long-term profitability.
Access to skilled labor influences how quickly you can grow.
Regulatory environments determine project approval timelines and labor laws.
The best states offer a mix of construction activity, affordable operations, and strong pipelines for job growth.
Top 10 States Adding Construction Jobs (2025 to 2026)
These are the top states for contractors looking to grow, ranked by jobs added between December 2024 and December 2025.
| States With the Most Jobs Added and Highest Job Growth Rate in 2026 | ||||
|---|---|---|---|---|
| Rank | State | Jobs added | % growth | Total employment |
| 1 | Texas | +15,700 | +1.8% | 876,600 |
| 2 | North Carolina | +14,400 | +5.3% | 288,300 |
| 3 | Ohio | +14,300 | +5.7% | 266,300 |
| 4 | Missouri | +8,500 | +5.9% | 153,600 |
| 5 | Illinois | +7,900 | +3.4% | 239,800 |
| 6 | Iowa | +7,100 | +8.6% | 89,900 |
| 7 | Kentucky | +6,300 | +6.7% | 101,000 |
| 8 | Michigan | +6,300 | +3.2% | 204,900 |
| 9 | Idaho | +6,100 | +8.2% | 80,400 |
| 10 | Virginia | +5,900 | +2.7% | 224,900 |
Source: AGC analysis of BLS Current Employment Statistics, December 2025.
1. Texas: Still the Largest Construction Market
Texas remains the top state for construction employment with 876,600 workers, adding 15,700 jobs over the past year. Major infrastructure projects, housing developments, and energy-sector builds continue to drive demand. With low taxes, business-friendly regulations, and a deep labor pool, Texas is still the go-to for construction business expansion, even as its growth rate moderated to 1.8%.
2. North Carolina: The Biggest Mover
North Carolina added 14,400 construction jobs (5.3% growth), making it the second-largest gainer nationally. The state added 94,000 housing units in 2024, the fourth-largest growth in the nation, and the momentum is carrying into 2026. Charlotte and Raleigh-Durham continue to attract major commercial and residential construction projects.
3. Ohio: Affordable Growth Powered by Data Centers
Ohio added 14,300 jobs at a 5.7% growth rate, driven by data center construction, manufacturing investment, and ongoing infrastructure projects. Its affordable cost of living and central location make it one of the best states for construction companies looking for strong growth without coastal-city costs.
4. Missouri: Midwest Surge
Missouri added 8,500 construction jobs (5.9% growth), reflecting strong demand for infrastructure and commercial construction projects across the Kansas City and St. Louis metros. The state's affordable operating costs and central location make it attractive for contractors expanding in the Midwest.
5. Illinois: Infrastructure and Data Center Demand
Illinois added 7,900 construction jobs (3.4% growth), with the Chicago metro driving much of the demand. Data center construction, infrastructure spending, and commercial real estate projects are fueling construction employment growth across the state.
6. Iowa: One of the Fastest-Growing Markets
Iowa added 7,100 jobs at an 8.6% growth rate, one of the highest percentages in the country. Manufacturing facility construction and energy projects are the primary drivers, making Iowa a strong option for contractors targeting high-growth markets with lower competition.
7. Kentucky: Solid Job Creation, Affordable Operations
Kentucky added 6,300 jobs (6.7% growth) and offers a more affordable base for contractors than larger states. Residential and public sector construction projects are on the rise, making it a smart alternative to higher-cost-of-living areas.
8. Michigan: Manufacturing-Driven Rebound
Michigan added 6,300 construction jobs (3.2% growth), benefiting from renewed manufacturing investment and infrastructure spending. The state's established construction workforce and affordable operating conditions give contractors a solid foundation for growth.
9. Idaho: Sustained High Growth
Idaho added 6,100 jobs at an 8.2% growth rate. Population increases and infrastructure development continue to fuel a high-demand environment for construction businesses looking to scale in a growing market.
10. Virginia: Steady and Reliable
Virginia added 5,900 construction jobs (2.7% growth), offering a solid blend of job creation and economic stability. Both public infrastructure and private development projects are contributing to reliable demand for contractors.
States With the Highest Average Construction Worker Salaries
Wages vary widely across the country. According to the BLS Occupational Employment and Wage Statistics (May 2024), here are the top states offering the highest average annual pay for construction workers:
| Rank | State | Average annual pay |
|---|---|---|
| 1 | Hawaii | $84,870 |
| 2 | New Jersey | $82,400 |
| 3 | Illinois | $81,810 |
| 4 | Massachusetts | $81,670 |
| 5 | Washington | $80,380 |
The national median for construction laborers is $46,050 per year, with projected 7% growth through 2034 and 1,649,100 annual openings nationally.
Where Construction Jobs Are Growing Fastest in 2026
Knowing where construction jobs are growing fastest helps contractors prioritize expansion plans. Percentage growth reflects both current demand and long-term opportunity.
| Rank | State | % growth | Jobs added |
|---|---|---|---|
| 1 | Hawaii | +8.7% | +3,400 |
| 2 | Iowa | +8.6% | +7,100 |
| 3 | Idaho | +8.2% | +6,100 |
| 4 | West Virginia | +7.6% | +2,500 |
| 5 | New Mexico | +6.8% | +3,800 |
| 6 | Kentucky | +6.7% | +6,300 |
| 7 | Montana | +6.1% | +2,200 |
| 8 | District of Columbia | +6.0% | +900 |
| 9 | Missouri | +5.9% | +8,500 |
| 10 | Ohio | +5.7% | +14,300 |
Economic and Regulatory Factors To Consider
Running a construction business successfully depends on more than project volume. These factors vary state by state and directly affect profitability for construction companies.
State tax structures and incentives
States like Texas and Florida offer low or no income tax, making them attractive to contractors looking to maximize margins. Other states provide property tax abatements, fast-track permitting, and infrastructure grants. Compare tax rates, business incentives, and ongoing operating costs when evaluating new markets.
Licensing requirements and labor laws
Contractor licensing and labor regulations vary widely between states, affecting how quickly you can begin operating. Some states have straightforward licensing with fast processing times. Others require more documentation, additional exams, or specialty classifications. Strong project management practices are key to staying compliant.
Cost of doing business
Regional differences in labor rates, insurance premiums, materials pricing, and permitting fees all influence profit margins. States like Ohio, Missouri, and Michigan tend to offer more affordable operating conditions compared to coastal markets.
Access to skilled trades
Labor shortages remain the top constraint for construction companies nationally. States with strong workforce training programs, apprenticeship pipelines, and technical schools (like electrician programs) give contractors a better chance of staffing projects on time.
Deciding Where To Open a New Construction Business
Choosing the right location can make a major difference in long-term success. Beyond project demand, factors like tax policies, labor availability, and regulatory requirements all play a role.
Look for sustained job growth
Markets like Iowa, Idaho, and Ohio are expanding quickly and offer strong pipelines for construction employment.
Balance demand with affordability
States like Missouri and Kentucky offer both job opportunities and lower operating costs than coastal markets.
Evaluate local incentives and tax structures
State-level incentives can protect your margins and accelerate your ramp-up when entering a new market.
Review licensing requirements
Staying on top of contractor licensing in your target state helps you avoid project delays and compliance issues.
Business Funding Options To Fuel Your Expansion
Access to fast, flexible capital can make all the difference when you're ready to grow your construction business. Clarify Capital helps contractors secure the funding they need to scale, with access to over 75 lenders and financing designed for real-world business needs.
Term loans
Best for larger investments like expanding your team, opening an office in a new state, or taking on bigger construction projects.
Working capital loans
Best for covering day-to-day expenses, payroll, or bridging gaps between project payments.
Equipment financing
Best for purchasing or leasing heavy machinery, vehicles, or specialized construction tools without draining cash reserves.
Business lines of credit
Best for flexible, revolving access to funds you can draw as needed for materials, subcontractors, or unexpected costs.
Merchant cash advances
Best for fast funding based on future revenue, especially during slow seasons or between project milestones.
Invoice factoring
Best for converting outstanding invoices into immediate cash so you can keep operations moving without waiting on client payments.
SBA loans
Best for established contractors seeking low rates, long terms, and high loan amounts backed by the U.S. Small Business Administration.
Construction business loans
Best for contractors who need tailored financing specifically designed for the construction industry's unique cash flow cycles.
Confidently Grow Your Construction Business
The construction industry is full of job opportunities in 2026, but smart growth depends on more than finding the right project. Knowing where construction activity is rising, how state regulations impact your margins, and where the best states for expansion are can give your construction business an edge.
Factoring in local job trends, tax structures, and access to funding helps contractors position themselves for sustainable growth in high-demand regions. Whether you're chasing new construction jobs or expanding into a more business-friendly state, preparation and support are key.
Apply today to get matched with the right loan for your goals.
FAQs
Here are answers to the questions I hear most from contractors evaluating where to grow.
What State Has the Most Construction Jobs?
California still has the most total construction workers (883,600 as of December 2025), but it lost 19,800 jobs over the past year. Texas is the top state by job gains (+15,700) and has 876,600 total construction employees. For contractors, Texas offers both volume and growth, while California's market is contracting.
What States Pay Construction Workers the Most?
Hawaii ($84,870), New Jersey ($82,400), and Illinois ($81,810) offer the highest average annual pay for construction workers, according to BLS data. Massachusetts and Washington round out the top five. Keep in mind that higher wages often come with higher costs of living.
In What State Is Construction Booming?
Hawaii leads the country in construction job growth rate at 8.7%, followed by Iowa (8.6%) and Idaho (8.2%). By total jobs added, Texas (+15,700), North Carolina (+14,400), and Ohio (+14,300) are the biggest growth markets for construction businesses in 2026.
Michael Baynes
Co-founder, Clarify
Michael has over 15 years of experience in the business finance industry working directly with entrepreneurs. He co-founded Clarify Capital with the mission to cut through the noise in the finance industry by providing fast funding and clear answers. He holds dual degrees in Accounting and Finance from the Kelley School of Business at Indiana University. More about the Clarify team →
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