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A newly released report sheds light on the substantial economic contributions of the commercial construction industry in Alabama. The report, titled “Economic Impact of Commercial Construction in Alabama: 2021 Update,” provides comprehensive insights into the industry’s growth and its far-reaching effects on the state’s economy.
“Commercial construction provides the economic support and distinct physical landscape that define our state today. The interconnectedness of Alabama’s economy is evident as commercial construction drives growth across multiple sectors, with contractors building everything from local schools to embassies worldwide,” said Governor Kay Ivey. “The impact of the business has been successful in emphasizing our workforce, and ultimately, the employment impact is equivalent to 200,000 jobs. We are fortunate and grateful to have this $17.2 billion industry in Alabama, fueling economic growth, driving employment, and fostering prosperity statewide.”
From 2015 to 2021, the industry’s total impact grew from $15 billion to $17.2 billion. In 2021, the total output produced by commercial construction in Alabama reached an impressive $9.4 billion, marking a significant 97 percent increase compared to 2015 figures. This expansion underscores the industry’s robust performance and pivotal role in driving economic development across the state.
Dr. Kevian Deravi, who conducted the study on behalf of the Associated Builders and Contractors of Alabama, emphasized the industry’s relevance, stating, “Commercial construction in AL comprises 6.7 percent of Alabama’s GDP and creates 7.2 percent of Alabama jobs. Such a significant contribution—5 percent of a state’s economy—is a major player by any standard. In 2021 alone, the sector contributed over $600 million in state taxes, a sum that could cover the educational expenses of every student in both Jefferson and Shelby counties combined.”
Beyond the direct impacts on output, payroll, and employment, the report delves into the broader economic effects of the commercial construction industry. It estimates the total economic impact of commercial construction activities in 2021. It reveals staggering figures: an output impact of $17.2 billion, an earnings impact of $11.4 billion, and an employment impact equivalent to 200,000 full-time jobs.
President of the Associated Builders and Contractors Jay Reed said, “This Economic Impact study is about showcasing the importance of our industry in this state. The data reveals commercial construction is a major industry and essential to Alabama’s economy. Seeing these numbers in black and white helps us discuss specifics when meeting with members, elected officials, and beyond.”
Mark Mattox, Vice President of Robins & Morton and Chairman of ABC of Alabama, emphasized, “Alabama hosts a significant construction presence, including general contractors, trade contractors, and major industry associations, many headquartered here. This study helps us recognize and communicate the industry’s impact beyond annual revenue aggregates. While our influence is visible in Alabama’s physical landscape, we also contribute significantly to the state’s economic health. Through our studies, we track and share updates to critical indicators, helping members, the public, and lawmakers better understand construction as a powerful economic driver.”
The report confirms the commercial construction industry’s vital role in fueling economic growth, driving employment, and fostering prosperity across the state. Its findings underscore the importance of continued support and investment in this critical sector to sustain Alabama’s economic momentum and competitiveness in the years to come.
Dr. Kevian Deravi estimates that the impact in 2025 will surpass $20 billion, and the Associated Builders and Contractors of Alabama plan to update the study in June 2025.
