We propose a novel massively parallel construction algorithm for Bounding Volume Hierarchies (BVHs) based on locally-ordered agglomerative clustering. Our method builds the BVH iteratively from bottom to top by merging a batch of cluster pairs in each iteration. To efficiently find the neighboring clusters, we keep the clusters ordered along the Morton curve. This ordering allows us to identify approximate nearest neighbors very efficiently and in parallel. We implemented our algorithm in CUDA and evaluated it in the context of GPU ray tracing. For complex scenes, our method achieves up to a twofold reduction of build times while providing up to 17% faster trace times compared with the state-of-the-art methods.