This article is part of a five-part series looking at the most up-and-coming U.S. markets for commercial construction.

Commercial contractors know that government roadblocks and regulations can slow even the most booming construction market while business-friendly policies can stoke development.

The latter is definitely the case for Nashville, Tennessee, which boasts one of the strongest economies of any U.S. metropolitan area. These days, builders and businesses there not only enjoy unprecedented economic growth but also the support of elected officials from city council members to the governor's mansion, with Tennessee’s Republican Gov. Bill Lee, who ran a mechanical contracting business for 20 years before entering politics. A longtime member of Associated Builders and Contractors, Lee understands how the principals of a free enterprise approach supports local businesses and industry.​

Elected officials in the region encourage open competition, education and job growth and award construction projects on merit, regardless of labor affiliation, according to Clay Crownover, president and CEO of the Greater Tennessee Chapter of Associated Builders and Contractors.

"We are an open competition state, which frees up the economy to grow by keeping operational cost down on projects through efficient management," he told Construction Dive.

Crownover said policies that support small business owners and the overall construction sector have helped to stimulate economic growth and led to more projects and more jobs.

“Everything from being an open competition state, to favorable business and personal tax laws and favorable businesses tax incentives hands us one of the most diverse economies in the country," he said.

Several massive projects totaling more than $1 billion are underway or about to get started in and around Nashville, including Music City Center, First Tennessee Park, the State of Tennessee Museum, numerous hotel projects and the expansion of the Nashville International Airport.

One of the city’s most ambitious development projects is the 17-acre Nashville Yards downtown district anchored by an Amazon office campus and a 400,000-square-foot entertainment district being planned by Los Angeles-based Anschutz Entertainment Group.

Growing pains

This demand for development comes with consequences, Crownover said, citing a significant shortage of skilled labor that is impacting construction firms all of sizes.

In Tennessee, the industry needs nearly 186,000 workers from across all professional levels — including project managers, estimators and schedulers, as well as skilled trades such as carpenters, electricians and plumbers — just to meet the current backlog, he wrote in this article.

“We, like most places, are facing a huge worker shortage, he said. “We have to train more people to keep the level of construction going.”

In addition, he said, Nashville faces many challenges regarding the area's growing affordable housing crisis and lack of funding for public transit projects. A recently released study found that Nashville is the largest city in the country that doesn't have dedicated funding for transit. 

Mayor John Cooper is hosting 11 listening sessions about transit in the next few months to get residents' feedback.

In order to continue to grow, issues such as these are going to need to be addressed, Crownover said. 

“We must prioritize our pro-business climate, keep the things that keep Nashville competitive and effectively address issues of affordable housing and quality transportation," he said.