U.S. Site Selection Profile: Building and Construction Materials

Building and construction products manufacturing is one of Site Selection Group’s leading industrial sectors. As housing shortages across the country continue, and the nation’s population continues to shift south and west, more and more construction product manufacturing companies should consider whether they are best positioned to serve current and future housing and building growth. This blog highlights key data points and trends that Site Selection Group monitors in this very active industry.  

States with strong building and construction growth and presence

The table below shows job growth and overall presence in the building and construction products sector over the past five years. There are many different ways to define this industry, so for simplicity, we use the Harvard Cluster Mapping projects definition for this sector. We measure growth in terms of absolute job count change and percentage change, as looking at either of these figures on their own does not tell the full story. We also give weight to the results to states with a strong existing presence in the industry, as states with a small existing presence can show abnormally large percentage increases based on adding a small number of jobs. As a result, the data in the table below reflects an index score that blends those data points.

The map shows some key trends in regions that have stronger presence and growth profiles in the building and construction products industry:

• Sun Belt Focused
  To an even greater extent than many other industries, the building and construction projects industry tends to follow population trends. As a result, some of the top states in the country for growth and presence are also some of the fastest-growing states from a population perspective. Mountain West states like Arizona and Utah score well under this metric, as do fast-growing Southeastern states like Tennessee and Missouri.
  
  
• Florida Shines in Growth
  From a logistics perspective, some manufacturing projects may skew away from being “too” far south, and as a result, states like Florida sometimes can be overlooked for traditional manufacturing projects. But projects that are heavily focused on serving fast-growing markets and are shipping products that tend to be larger and heavier, may want to look more closely at states like Florida. As shown, many new and expanding building and construction products companies have grown in Florida over the past five years.
  
  
• Other Regions That Stand Out
  Again, different building and construction materials companies may look at other parts of the country based on their current network. A company looking to be centrally located in the United States to serve multiple markets may find a home in a state like Missouri, which has shown strong growth metrics over the past five years. A company based in the South may seek opportunities to serve markets in the Great Lakes Region. New England-based companies may look to states with strong growth metrics like Michigan and New York. Finally, although California isn’t always a top state for manufacturing, population and housing growth in key markets may drive a construction products manufacturing operation to locate in the state, driving growth.  
  
  

Top recent projects and incentives packages

In addition to state-level trends, Site Selection Group carefully monitors major project and incentives announcements in the building and construction products sector. The map below shows the count of incentivized building and construction product projects by state for 2023-2024, with darker blue states indicating more project announcements. Please note, this only includes projects that received publicly reported economic incentives.

Key projects of interest include:

• Fiberbond Corp
  Minden, Louisiana – This company, a pre-cast concrete for building applications manufacturer, recently announced a $50 million, 450-employee plant near Shreveport, Louisiana. Support for the project came through the Louisiana Retention and Modernization Tax Credit Project. Locating in Louisiana could be a good opportunity for companies looking to serve fast-growing Texas markets and those in the Southeast.
  
  
• Victaulic
  Tioga, Pennsylvania – A developer and manufacturer of mechanical pipe and joining systems recently announced a 214-job, $100 million expansion project at its plant in North Central Pennsylvania. The Pennsylvania First program and workforce and economic development partners supported the project.
  
  
• Innovative Construction Group 
  Siler City, North Carolina – This company, a subsidiary of the Pulte Group, recently announced a $40 million, 157-job project in Siler City, North Carolina, just between the fast-growing Triangle and Triad regions. The project was supported by North Carolina’s Job Development Investment Grant program.

SSG’s 2024 outlook for building and construction products 

While the residential housing market and industrial building market have their inevitable ebbs and flows, Site Selection Group expects the building and construction products industry to continue to grow over the next several years. We think this market will continue to be driven by demographic shifts and continued movement toward energy-efficient building products and materials. For companies looking to establish a new operation in this industry or expand their network, Site Selection Group encourages a close look at the following:

• Logistics Focus
  Building and construction products companies are often moving large quantities of generally heavy materials. Even small differences in location can drive big differences in logistics costs. As a result, SSG encourages our clients to think very carefully about inbound and outbound assumptions, while testing different scenarios for future growth. Further, these types of projects should also take a careful look at future scenario planning for future plants (or even consolidation). For a company looking to set up its third location, for example, it’s important to consider where a fourth and fifth plant might be opened. 
  
  
• Sites and Adjoining Uses
  While many building and construction materials projects may be slightly less utility-intensive than some of the “mega” electric and water/wastewater projects we see in other industries, site diligence is still just as critical. One important factor is diving into adjoining uses. Not all these types of projects come with copious amounts of air or noise emissions. Even smaller and cleaner operations must carefully review their use with local, county and industrial park requirements. 
  
  
• Smaller Markets
  Because these projects can be hyper-focused on a particular region and may have questions about adjoining uses and emissions, the best site locations for these plants are sometimes in smaller markets. Further, for typical mid-sized projects in this industry (e.g. 50-150 jobs) a smaller market may offer a great balance of the right workforce availability with lower levels of direct competition.