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
Feb 7, 2025 - Tech Firms Ink Deal to Fast-Track Data Center Deployment
- In a January White House press conference, Oracle, OpenAI, and Softbank announced a joint venture deal dubbed Stargate that will invest $100 billion to build 10 new data centers in support of growing demand for AI, according to Construction Dive. The Stargate initiative includes the option to scale further to 20 data centers at a total cost of $500 billion. The data centers - one of which is already under construction in Texas – will be about 500,000 square feet each. The location and estimated construction start dates for the remaining data centers were not disclosed during the press conference. President Trump said he will help expedite the project’s timelines to ensure the US maintains leadership in the rapidly advancing AI market.
- North American construction and engineering spending in 2025 is expected to grow by 2% after increasing an estimated 6% in 2024, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. With growth of 19%, the data center sub-sector will lead 2025 nonresidential building construction, followed by public safety (9%), amusement and recreation (7%), and power (7%). Commercial construction spending is expected to decline 9% in 2025 amid a 6% decline in warehouse demand, which accounts for more than half of annual commercial spending. Lodging construction spending is forecast to drop by 7%, and stubbornly high office vacancies are expected to hold new office construction to 2% growth in 2025.
- The total value of nonresidential building construction starts increased 2% in December 2025 from November, according to Dodge Construction Network. The gain was led by a 6% increase in commercial projects. Manufacturing construction starts advanced 19% in December, while institutional starts declined 3%. Nonresidential building starts were up 4% for the full year compared to 2023. Dodge Construction Network associate director of forecasting Sarah Martin said, “Rate cuts prior to December supported some momentum in multifamily and commercial starts over the month. Sustained labor shortages and elevated materials prices will continue to add risk to the sector, in addition to the concern over tariffs and more strict immigration enforcement. Overall, the strength in the value of projects in planning and further Fed rate cuts should encourage growth in construction in 2025.”
- After posting solid gains in 2023 and 2024, construction spending for nonresidential buildings is expected to slow significantly in 2025 and 2026, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction increased by 20% in 2023 and another 6% in 2024 but is forecast to slip to 2.2% in 2025 and 2.6% in 2026. For the next two years, growth will be led by data centers, which should support modest office construction in an otherwise challenging market. The warehouse sector is oversupplied, which will limit spending growth. Spending on institutional projects should remain stable as they are less susceptible to cyclical factors. AIA Chief Economist Kermit Baker said, “The modest outlook is partly based on a few expected headwinds to building activity, including potential tariffs on imports. There is also policy concern around how the construction labor force might be impacted by emerging immigration policy. Construction sector spending has been exceedingly strong – albeit unusually unbalanced – and coupled with these headwinds the projections are only very modest gains the next two years.”
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