Subcontractors on Engineering News-Record’s 2018 Top 600 Specialty Contractors list generated a total $124 billion of revenue in 2017, up 10% from 2016 and marking the seventh year in a row that earnings for this group increased. ENR said the “hot” market subcontractors are enjoying right now should last at least another 12 to 18 months.
Mechanical, electrical and utility contractors dominated the first 10 spots on ENR’s list. Some firms are growing through acquisitions, but as the list of investors grows, so does the dollar amounts of the deals.
Although many specialty contractors are enjoying not having to beat the bushes in search of work, they still face challenges. One is the risk of taking on too much work, leaving those that overextend themselves vulnerable to cash flow, management and staffing shortfalls. General contractors also have become competitors in some markets, choosing to control work quality and production schedules by self-performing jobs they previously subcontracted. Meanwhile, the demand for specialty contractors has brought firms into the industry that have little or no expertise in the work they are bidding for.
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