Construction and Economic Development


he construction industry is critically important to economic development markets across the nation.  This investment-led segment of economy develops the infrastructure that includes transportation, education, and health; all high ranking factors in economic development of a local community, region, state, or nation. 

These types of infrastructure developments attract and retain new and existing businesses, hence tying economic development and construction together in a symbiotic relationship.

Construction’s Pre-Existing Conditions

Construction is often a sign of a local economic uptick.  However, several factors must be present in an area prior to attracting new projects.  A work-ready population, existing businesses, restaurants, and suppliers are just a few.  Desired or appropriate infrastructure such as roads, ports, and water would likely be in place. Utilities like data, electricity, or gas may also be relevant to the site decision.  It’s not a coincidence that these are many of the factors that rank high as key criteria for site selection.  Highway accessibility and the availability of a skilled workforce continually rank at or near the top in Area Development’s Annual Corporate Survey.

Construction’s Supporting Workforce

Once a site is chosen for development and the approval process begins, the number of jobs involved throughout the different construction phases could be staggering.  A variety of consultants including lawyers, accountants, site selectors, architects, and engineers may be involved in processes such as real estate transactions, budgeting, incentive procurement, permits, design, and approval stages long before breaking ground.

Developers, material suppliers, and contractors are necessary and depending on the scale of the project, it may take hundreds or thousands of workers in the actual construction of a new development.  This could include plumbers, electricians, drywallers, and other trades affiliated with the construction industry.

Construction’s Impact

During construction, there may be short-term inconveniences to surrounding businesses and residents.  Noise, road closures, delays, and detours are all possible.  Obstructions to local businesses and residential streets are possible, as well.  These can be annoying inconveniences during the process of construction, but proper planning can help alleviate many of the negative impacts during this phase.

However, once construction is down the path to completion, the project will bring in tax dollars to the local community from both property taxes on the new facilities and property and income taxes from the new employees working in these facilities.  Additionally, the community is further supported by improved roads resulting in better commutes for the existing and new workers, as well as vendors, suppliers, customers, and any other visitor to the area.

Construction and economic development go hand in hand.  They are the mechanisms that create jobs, generate income, and provide new opportunities for the economy.  Economic development officials for communities, regions, and states work to retain and attract new businesses and the construction industry is renovating, reconfiguring, and building transportation infrastructure and facilities to support the growth of investment and jobs that communities and regions are seeking.  One, simply, does not exist successfully without the other.