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An economic study organized by the Associated Builders and Contractors (ABC) Alabama chapter found commercial construction’s economic impact exceeds $9.6 billion, making it the largest industry in the state. 

Dr. Keivan Deravi, economics professor for Auburn University at Montgomery, took a detailed look into the construction industry in Alabama, reaching beyond construction billing and analyzing the overall impact, including related industries such as concrete, paper, lumber and wood, to find comprehensive data on the effect construction has on the state.

Following are key findings:

  • The economic output – payroll and non-payroll expenditures – of construction is more than $9.3 billion, accounting for 41 percent of all output in Alabama. 
  • The construction industry is responsible for 56 percent of all of the state’s jobs.
  • Construction in Alabama has an annual payroll of $7 billion.
  • Alabama’s construction industry has a direct impact of $402 million of the state’s Education Trust Fund.
  • Construction in Alabama contributes $140 million in sales taxes, $19 million in use taxes, $27.4 million in utility taxes, and $216.7 million in individual and corporate income taxes each year.

To complete the study, Deravi separated commercial and residential construction and measured all factors that could be directly tied to the commercial construction industry including day-to-day spending, materials and services, payroll generated and employment needed to meet demands. The study only included business done within Alabama boarders and paid to Alabama companies. 

“There is a very significant trickle-down effect,” said Randall Curtis of Hoar Construction. “As a general contractor, you know so many other industries are touched and involved in our projects, but we’ve never seen it shown like this.”

The study found the industries most affected by commercial construction included related construction, manufacturing, service, wholesale trade, finance and transportation.