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
Mar 7, 2025 - Immigration Crackdown May Increase Absenteeism
- 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.
- The total value of nonresidential building construction starts decreased 18% in January 2025 from December, according to Dodge Construction Network. Commercial starts fell 41% amid weak office and hotel construction starts. An uptick in healthcare and recreational projects helped drive a 4% rise in institutional starts, while manufacturing starts were down 16%. January’s nonresidential building starts were off by 22% compared to a year earlier. Dodge’s associate director of forecasting Sarah Martin said, “After robust data center starts in November and December, total office starts fell back in January to more historically typical levels and drove a sizable piece of the month-to-month decline. However, most nonresidential sectors saw weakness over the month. Ongoing labor shortages and high material costs will continue to pose risks to the sector, along with concerns over tariffs and stricter immigration enforcement. Projects are likely to continue moving through the planning queue slowly, until the Federal Reserve resumes cutting rates in the back half of the year.”
- 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.
- 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.
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