Southwest

Construction in the Southwest continues to be driven by the California market, which is discussed in more detail in the spotlight markets section of this report.

Other parts of the region, however, struggle to balance rapid population growth and mitigating climate change. Nearly all major cities in the Southwest rely on the Colorado River for their water – a resource that is simply unable to support all these people. This has led to a moratorium on new residential permits in Phoenix and legal disputes over water rights.

Outside of California, the Southwest offers a comparatively low cost of living and a business-friendly environment that attracts new residents in spades. Since 2020, the construction labor force has expanded significantly, due in part to workers relocating from California. The region’s hot, arid climate and relatively low cost of land (outside of California’s major cities) make it attractive for industries with strict moisture and temperature control requirements, like semiconductor manufacturing. This has attracted companies flush with federal money, resulting in new facilities being built near Phoenix, Las Vegas, and Salt Lake City. Reno, Nevada has also gained recognition as an affordable manufacturing hub, conveniently close to the tech centers on the other side of the Sierras.

* Other structures include religious buildings, amusement, government communications, and public recreation projects.