Why can’t America built like it used to?

The Empire State Building went up in just 410 days, and the Hoover Dam took five years instead of seven. Today, such feats seem almost impossible in the United States, a country now struggling to build basic infrastructure on time and on budget. The Economist’s recent deep dive into America’s construction industry reveals a complex web of fragmentation, regulatory hurdles, and chronic underinvestment that threatens the nation’s economic and technological ambitions.

The stakes could not be higher. President Donald Trump has made reviving American manufacturing and infrastructure a cornerstone of his policy, banking on protectionism and industrial growth. Yet as The Economist highlights, America’s construction sector remains bogged down by inefficiencies that delay critical projects—from factories to bridges to data centers needed for a competitive edge in artificial intelligence. Despite soaring demand and rising backlogs reported by major firms like Turner Construction, productivity has actually fallen by 8% since 2000, while other private sectors have surged ahead.

A key culprit is fragmentation. The construction landscape is dotted with some 750,000 firms, about three times the number in manufacturing, which generates twice the GDP share. Most of these companies are small, with less than 20 workers, and productivity studies show they lag significantly behind their larger peers. This leads to missed economies of scale and cumbersome coordination, as major contractors subcontract work through multiple layers, slowing timelines and inflating costs.

This fragmentation is compounded by a regulatory patchwork. Building codes vary wildly not just by state but by municipality, making it essential—and expensive—for companies to have local expertise. For large national firms, relying on local subcontractors becomes the easiest way to navigate this maze, but it adds to complexity and inefficiency.

Underinvestment is the final piece of the puzzle. Small contractors operating on razor-thin margins lack the capital to invest in labour-saving technologies, a problem worsened by volatile project demand. Compared to other industries, construction firms spend a fraction of their revenue on capital expenditures. Consequently, automation and advanced software have barely penetrated the sector. For example, there are only six robots per 100,000 construction workers in the U.S.—a stark contrast with manufacturing, which still has untapped potential for automation.

The article also highlights Trump’s mixed impact: while he seeks to ease some federal regulations that slow projects, his push to deport undocumented workers exacerbates labour shortages, and tariffs on materials like steel raise costs. Still, there are tentative signs of consolidation, as shrinking profits spur mergers and acquisitions among contractors and suppliers alike. This could lead to the scale and integration needed for productivity gains. Digitisation of supply chains, as pursued by major distributors like QXO, promises to improve materials flow and reduce delays.

The Economist concludes that revitalising America’s construction industry will be “the mother of all projects”—one that requires overcoming deep-rooted structural problems and aligning incentives across a sprawling, fragmented sector. Without such change, ambitious visions for a manufacturing comeback and technological leadership may falter on the very ground they need to build upon.

By Vugar Khalilov