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Massachusetts construction growth is 12 times slower than the national average — and the state’s largest city just piled on more climate mandates

Thursday, May 21, 2026
3 min read
MDN Staff
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Massachusetts construction growth is 12 times slower than the national average — and the state’s largest city just piled on more climate mandates

Construction establishments grew 0.6% in Massachusetts vs 7.2% nationally. A new Pioneer Institute report finds the state is falling behind in nearly every sector.

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BOSTON — Construction establishment growth in Massachusetts has effectively flatlined — growing just 0.6% since the first quarter of 2022, compared to 7.2% nationally.
That's not a gap. That's a 12-to-1 ratio. For every new construction business that opens in Massachusetts, a dozen open somewhere else.
The figures come from a Pioneer Institute report analyzing Bureau of Labor Statistics data on business formation across all 50 states. The report found that Massachusetts has fallen to dead last in the country for net business formation — and construction is one of the worst-performing sectors.

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The timing is brutal. Governor Maura Healey and Mayor Michelle Wu have both doubled down on climate mandates that add cost to every new building. Wu's 218-page climate action plan includes Net Zero Carbon Zoning requiring new buildings to emit net-zero from opening day, BERDO compliance deadlines for thousands of existing buildings, and a push to eliminate fossil fuels from new construction.
Meanwhile, developer payments that fund Boston's housing programs have collapsed 97% — from $61.4 million in 2022 to $2.1 million from projects filed in 2025.
The construction industry isn't shrinking because people stopped needing buildings. It's shrinking because Massachusetts has made building too expensive, too complicated, and too risky. And the states that haven't — Florida, Texas, North Carolina, even New Hampshire — are growing their construction sectors at rates Massachusetts can only watch from a distance.
Idaho, the fastest-growing state for total establishments at 58.1%, has been cutting or simplifying over 95% of its state regulations since 2019. Massachusetts added a surtax on high earners, hiked developer fees, and layered on climate mandates.
The results speak for themselves: 0.6% versus 7.2%. Twelve times slower than the country. And the mandates keep coming.

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