America's construction industry is beset by fragmentation, overregulation and underinvestment. Since 2000, output per worker has fallen by 8%, even as it has risen by 54% for the private sector as a whole. American housebuilders construct the same number of dwellings per employee as they did nine decades ago.
Around 750,000 companies operate in the industry, roughly three times as many as in manufacturing, which accounts for twice construction's share of GDP. Giants such as Turner Construction Company, America's largest commercial builder, or Bechtel take on responsibility for big commercial projects but contract out much of the building work to smaller local firms, some of which also sub-contract. According to Leonardo D'Amico of Harvard University, construction firms with more than 500 employees are around twice as productive as those with between 100 and 499, and four times as productive as those with fewer than 20 workers.
A thicket of building regulations, which has grown denser since the 1970s, has gummed up projects and made it essential for firms to develop detailed knowledge of building codes, which vary from state to state and even across towns. This favours local contractors and discourages consolidation.
Capital expenditure by the average American construction firm comes to about 3% of revenue, compared with 13% across other industries (McKinsey). There are only six robots for every 100,000 workers in construction, compared with nearly 3,000 in manufacturing (ING). The patchy uptake of software tools to plan and manage jobs does not bode well for the industry's embrace of artificial intelligence.
There are signs the industry is starting to consolidate. In January 2025 Flatiron and Dragados, two big builders, finalised a tie-up. Private-equity firms have been buying up and merging smaller specialty contractors. In the supply chain, QXO, a distributor run by Brad Jacobs, acquired Beacon Roofing Supply for $11bn in April 2025, giving it a fifth of the American market for roofing materials. Home Depot outbid QXO for GMS, another stockist, with a $5.5bn offer.
One-third of workers in the construction industry are in America illegally, according to the National Association of Realtors. An estimated 25% of the lumber used in American construction is imported from Canada. The share of construction workers classified as office staff dealing with regulatory compliance has risen from roughly 30% fifteen years ago to 40%, according to the National Association of Home Builders.
The Empire State Building, finished in 1931, was erected in just 410 days. That same year construction began on the Hoover Dam, which was meant to take seven years but was built in five. California's high-speed-rail line, approved by voters in 2008 with a target completion date of 2020, will be at least a decade late.
There are two kinds of pedestrians... the quick and the dead.