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General contractors: industry overview and trends to watch

What to expect in economic conditions, employment patterns and technology advances

general contractor meeting with client and construction workers to discuss project

A high-level look at general contracting


General contractors plan, budget and manage the construction of a project. Among other responsibilities, this often includes overseeing several tradespeople, including plumbers, HVAC contractors, electricians, roofers and carpenters.


Projects are diverse and may include new builds or renovations of structures such as retail stores, apartment buildings, manufacturing plants or high-rises.


General contracting companies vary greatly in size and areas of specialty. Some general contractors, such as paper contractors, do little to no construction work of their own. Other general contractors perform different types of structural work (e.g., framing, rough carpentry, steel erection or structural masonry).1


General contractors don't fall neatly into one NAICS code. This is because the definition of a general contractor is relatively broad, covering a wide variety of entities and individuals who focus on projects both large and small. Classifications may include:


Industry outlook and trends


The outlook for general contractors is relatively positive. According to IBIS World and the Bureau of Labor Statistics, there are approximately:


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3,233,406

construction businesses2


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9,261,441

construction jobs2


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471,800

construction manager jobs3


In addition to this positive outlook, revenue for all of construction is approximately $2 trillion, and the industry has seen 3.3% annual growth over the last five years.2 Together, these statistics show a growing construction industry, which is likely to benefit general contractors.


In terms of demand, there's not only a need for new buildings but for interior refits for new commercial occupants and building renovations as well. This is particularly true when it comes to making structures more energy-efficient. General contractors ensure these types of projects are finished on time and on budget.


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Only 3% of young people ages 18 to 25
are interested in pursuing a career in construction, according to a survey from the National Association of Home Builders.

Insights on major lines of coverage1


Exposures, precautions and lines of coverage that may apply for general contractors.

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Recommended lines of coverage: general liability, inland marine, property, workers' compensation, and commercial auto


1 http://roughnotes.com/

2 "Construction Industry in the U.S. - Market Research Report," ibisworld.com/united-states/market-research-reports/construction-sector/ (December 2019).

3 "Occupational Outlook Handbook," bls.gov/ooh/management/construction-managers.htm#tab-6(Sept. 4, 2019).

4 "The U.S. construction industry is facing 'a uniquely post-Great Recession experience,'" Adriana Belmonte for Yahoo Finance, finance.yahoo.com/news/construction-industry-after-recession-140430175.html (Sept. 10, 2019).

5 "Industrial Economic Outlook: Uncertainty Reigns for 2020 and Beyond," aem.org/news/q4-2019/industrial-economic-outlook-uncertainty-reigns-for-2020-and-beyond/ (Nov. 4, 2019).

6 "Eighty percent of contractors report difficulty finding qualified craft workers to hire as association calls for measures to rebuild workforce," agc.org/news/2018/08/29/eighty-percent-contractors-report-difficulty-finding-qualified-craft-workers-hire-0 (Aug. 29, 2018).

7 "Unemployment rate 5.0 percent in construction, 1.9 percent in information industry, in December 2019," bls.gov/opub/ted/2020/unemployment-rate-5-point-0-percent-in-construction-1-point-9-percent-in-information-industry-in-december-2019.htm?view_full (Jan. 15, 2020).

8 "Young adults and the construction trades," Rose Quint for NAHB Economics and Housing Policy Group, nahbclassic.org/generic.aspx?sectionID=734&generic ContentID=255983& channelID=311&_ga=1.39149667. 1346323624.1489973586 (March 1, 2017).

9 "2020 engineering and construction industry outlook," https://www2.deloitte.com/content/dam/Deloitte/us/ Documents/energy-resources/us-2020-engineering-construction-outlook.pdf (2019).

10 "11 Crucial Trends That Are Impacting The Construction Industry Today," https://riskandinsurance.com/11-crucial-trends-that-are-impacting-the-construction-industry-today/ (Nov. 1, 2019).

11 "2020 engineering and construction industry outlook," https://www2.deloitte.com/content/dam/Deloitte/us/ Documents/energy-resources/us-2020-engineering-construction-outlook.pdf (2019).

12 "What is Contractual Liability?" Marianne Bonner for The Balance Small Business, thebalancesmb.com/what-is-contractual-liability-462636 (March 6, 2020).

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