Commercial Building Contractors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 40,500 commercial building contractors in the US coordinate resources and manage the building process for industrial, commercial, and institutional projects. About 71% of contractors are sole proprietors or entities without workers on payroll. Most commercial building contractors rely heavily on subcontractors.
Dependence on Subcontractors
Commercial building contractors are dependent on subcontractors for specialized activities, such as electrical, plumbing, or mechanical work.
Competitive Pricing Environment
Most commercial construction jobs are competitive bidding situations, and price is a major deciding factor in which commercial contractor obtains the job.
Industry size & Structure
A typical commercial building contractor employs about 21 workers and generates $11.6 million annually.
- The commercial building contracting industry consists of 40,500 companies that employ 884,000 workers and generate $471 billion annually.
- About 70% of contractors are sole proprietors or entities without workers on payroll.
- Most commercial building contractors rely heavily on subcontractors.
- Large companies include Turner Corporation, Tutor Perini, Jacobs Engineering, and Gilbane Building Company.
Industry Forecast
Commercial Building Contractors Industry Growth
Recent Developments
Apr 7, 2025 - Construction Spending Rises, but Headwinds Loom for Private Projects
- The total value of construction put in place increased 0.7% in February compared to January, according to the US Census Bureau. Spending on nonresidential projects rose 0.3% to a record $1.26 trillion. Residential spending grew 1.3%. Highway and street construction projects accounted for 40% of February’s nonresidential gains as public projects drove growth, according to Associated Builders and Contractors (ABC) analysis of US Census Bureau data. While public nonresidential spending was up 6.1% in February over the same month in 2024, private nonresidential spending has not kept pace, growing just 2.5% over the same period. In a press release, ABC’s Chief Economist Anirban Basu said, “The mix of high interest rates, tight lending standards, and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months.”
- The total value of nonresidential building construction starts increased 2% in February 2025 from January, according to Dodge Construction Network. Commercial starts rose 22% amid stronger office, hotel, and parking garage construction starts. Weaker healthcare project starts contributed to a 2% drop in institutional starts in February and manufacturing projects fell 48% compared to January. Dodge’s associate director of forecasting, Sarah Martin, said, “While increased uncertainty over the trajectory of monetary and fiscal policies may be informing some of the flat month-to-month trends – the largest construction sectors still saw growth in activity throughout February. Steady growth in planning activity throughout 2024 should support stronger construction starts in future months – but owners and developers will have to factor in higher risk around elevated material costs, supply chain volatility and further labor constraints.”
- Raids by Immigration and Customs Enforcement (ICE) are prompting some foreign-born workers to stay home from their workplaces, disrupting key industries that rely on migrant workforces, including construction, according to The Wall Street Journal. The Trump administration has said that while it is focusing on undocumented people with criminal backgrounds, anyone in the country illegally faces increased risk. According to an analysis of US Census Bureau data by the American Immigration Council, undocumented immigrants make up about 14% of the US construction sector’s workforce. The Associated General Contractors of America said it had received anecdotal reports of rising absenteeism from member firms in several locations, including Florida, Georgia, Oklahoma, and Texas. Labor disruptions reduce construction firms’ ability to deliver projects on time.
- Some cities are mitigating housing shortages by converting shuttered hospitals into residential space, according to The Wall Street Journal. Because hospitals’ patient rooms often have high ceilings and individual bathrooms, they’re easier to convert into housing than office buildings. Hospitals are also usually situated near city centers and transportation hubs. Federal tax incentives for redeveloping old hospitals are helping to fuel the trend as cities struggle with housing shortages. In 2023, the 20% federal historic tax credit for eligible projects reached $225 million, according to Wall Street Journal analysis of National Trust for Historic Preservation data. Such projects are particularly attractive for rural communities as more hospitals in outlying areas close. The Center for Healthcare Quality and Payment Reform estimates that as many as 700 rural hospitals are at risk of closing.
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