Specialty Contractors
Description
Companies in this industry contract to perform construction work in a wide variety of trades, including site preparation, concrete, electrical, HVAC, plumbing, and painting. Major companies include APi Group, Comfort Systems USA, EMCOR Group, Performance Contracting, and Quanta Services (all based in the US), as well as Bilfinger (Germany) and Skanska (Sweden).
The global construction market is forecast to reach about $20 trillion by 2027, at a compound annual growth rate (CAGR) of 6%, according to AECOM. The top countries in construction spending include China, the US, India, Japan, and Germany, according to Building Radar. Most specialty contractors focus on a single local or regional market, but some large companies operate internationally.
The US specialty contracting industry includes about 460,000 establishments (single-location firms and units of multi-location firms) with combined annual revenue of about $875 billion.
COMPETITIVE LANDSCAPE
Demand is driven by new residential and nonresidential construction activity, as well as corporate profits and local government budgets. The profitability of individual companies depends on accurate project bids and efficient operations. Most specialty contractors earn revenues from fixed price contracts, and companies must estimate total costs for projects. If actual material prices or labor costs differ from the estimates and cannot be recovered through change orders, profitability could be reduced. Large companies have advantages in being able to offer a variety of services over a geographically diverse market at competitive prices. Small companies can compete effectively by offering niche services or by building relationships with customers in individual markets.
The specialty contractor industry is highly fragmented, with the top 50 firms accounting for less than 10% of the industry's revenue. The industry is highly competitive, and a single project may attract bids from many contractors.
PRODUCTS, OPERATIONS & TECHNOLOGY
Main revenue sources for specialty contractors include the new commercial buildings, which account for about 10% of the industry revenue. This is followed by additions, renovations, and alterations for about 5% and new residential buildings for about 5%. Other services include the maintenance and repair of single detached building.
Specialty contractors serve a broad range of commercial, industrial, utility, government, and institutional customers. Contractors often work on specific aspects of construction and are not responsible for the entire building project. Work is usually subcontracted by general contractors or builders. Work also is performed directly for homeowners or owners of commercial properties or industrial sites. Most work is performed onsite; however, some specialty contractors maintain facilities for prefabrication or other tasks.
Equipment and materials required vary by contractor type. For example, concrete and masonry contractors use Portland cement, sand, gravel and water to create concrete. HVAC and plumbing contractors install bathroom and kitchen fixtures, pipes, furnaces, coolers, and air-conditioners. Smaller contractors buy materials from hardware stores, home improvement centers, or mass merchandisers. Larger firms buy directly from distributors. In addition to materials and equipment, labor is a major cost. Workers have varying degrees of skills and training. Some sectors, such as plumbing and electrical work, require employees to complete specific training and service programs before they can perform certain tasks. Apprenticeship programs also are used to train workers in the industry.
The global construction market is forecast to reach about $20 trillion by 2027, at a compound annual growth rate (CAGR) of 6%, according to AECOM. The top countries in construction spending include China, the US, India, Japan, and Germany, according to Building Radar. Most specialty contractors focus on a single local or regional market, but some large companies operate internationally.
The US specialty contracting industry includes about 460,000 establishments (single-location firms and units of multi-location firms) with combined annual revenue of about $875 billion.
COMPETITIVE LANDSCAPE
Demand is driven by new residential and nonresidential construction activity, as well as corporate profits and local government budgets. The profitability of individual companies depends on accurate project bids and efficient operations. Most specialty contractors earn revenues from fixed price contracts, and companies must estimate total costs for projects. If actual material prices or labor costs differ from the estimates and cannot be recovered through change orders, profitability could be reduced. Large companies have advantages in being able to offer a variety of services over a geographically diverse market at competitive prices. Small companies can compete effectively by offering niche services or by building relationships with customers in individual markets.
The specialty contractor industry is highly fragmented, with the top 50 firms accounting for less than 10% of the industry's revenue. The industry is highly competitive, and a single project may attract bids from many contractors.
PRODUCTS, OPERATIONS & TECHNOLOGY
Main revenue sources for specialty contractors include the new commercial buildings, which account for about 10% of the industry revenue. This is followed by additions, renovations, and alterations for about 5% and new residential buildings for about 5%. Other services include the maintenance and repair of single detached building.
Specialty contractors serve a broad range of commercial, industrial, utility, government, and institutional customers. Contractors often work on specific aspects of construction and are not responsible for the entire building project. Work is usually subcontracted by general contractors or builders. Work also is performed directly for homeowners or owners of commercial properties or industrial sites. Most work is performed onsite; however, some specialty contractors maintain facilities for prefabrication or other tasks.
Equipment and materials required vary by contractor type. For example, concrete and masonry contractors use Portland cement, sand, gravel and water to create concrete. HVAC and plumbing contractors install bathroom and kitchen fixtures, pipes, furnaces, coolers, and air-conditioners. Smaller contractors buy materials from hardware stores, home improvement centers, or mass merchandisers. Larger firms buy directly from distributors. In addition to materials and equipment, labor is a major cost. Workers have varying degrees of skills and training. Some sectors, such as plumbing and electrical work, require employees to complete specific training and service programs before they can perform certain tasks. Apprenticeship programs also are used to train workers in the industry.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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