Growth Opportunities for Trade Contractors

The specialty trade contractor subsector includes establishments that focus primarily on specific activities during the construction process but are not responsible for the overall project coordination. These jobs can consist of plumbing, site preparation, concrete pouring, electrical work, and much more. Trade contractors’ job scope usually includes new buildings, reworks, additions and alternations, repairs, and maintenance. 

Article Highlights:

–Facts and figures about the rise of trade contractor job opportunities

–Employment trends for trade contractors in the past years and predictions for the future

–Up-and-Coming sectors that are fast-growing within the industry

–Wages of various trade contracting jobs and which jobs come out on top

–Areas of growth for the construction industry market as a whole, which is notoriously undersaturated with skilled labor

Specialty trade contractors do specific sets of skilled work required to complete distinct parts of the construction project and are the “backbone” of the physical building portion of the project. General contractors often subcontract trade contractors for specific projects, but in some cases, they may also work directly for the property owner or general contractor. 

Being a trade contractor is an industry job on the rise, with a forecasted 17% growth rate and an estimated addition of 10,300 new jobs between 2017 and 2027. Specialty trade contractors make up a majority of that sector, coming in at 63% of the broader industry, with a total of 61,200 jobs in the US.

Additionally, trade contractors are some of the highest-paid in the construction industry, averaging  $28.28/hour in September 2019. It’s clear to see that trade contracting is a hot spot for incoming construction workers, and there are a plethora of lucrative growth opportunities becoming available within the trade contractor industry. 

According to Jack Jacobson, a spokesperson for the CEA, “The Construction Employers of America is encouraged by the strong job gains among the specialty construction trades. Specialty union contractors are investing in domestic workforce training and apprenticeship programs to ensure our industry is prepared when employment growth occurs in specialty construction.” 

Employment Trends

Highly skilled trade contractors are often unionized, and have a dominant hold on construction employment, holding nearly 64% of the jobs in the construction industry. Within the trade contractor industry, electricians and plumbers held the first and second highest-earning positions, respectively, with a mean annual wage in 2018 of $58,410 for electricians and $58,360 for plumbers. Other high-earning specialty trade contractor jobs include carpenters, construction laborers, and first-line supervisors. 

The trade contractor industry was one of the strongest to bounce back from the 2008 recession and has now established itself as one of the fastest-growing industries in the United States. However, despite its significant growth rate, the trade contractor subsector has not yet reached its pre-recession peak of 66,000 jobs, achieved in 2007. It is expected to surpass this number by the end of 2019. 

Up-and-Coming Sectors

Currently, there is a skilled labor shortage in the construction industry. However, with an expected growth rate of 4.5%, construction staffing is expected to become one of the leading industry sectors in terms of employment growth and wages. Some of the fastest-growing areas expected in 2020 include renewable energy, residential construction, and commercial construction. 

With the government’s new plan to make renewable energy account for 20% of the country’s total energy expenditure by 2020, the renewable energy sector is one of the hottest places for trade contractors to be. The governmental push for renewable energy resources is making it one of the most desirable areas for big businesses to enter. 

Another up-and-coming big-money area for trade contractors is working as an electrician. Electricians saw the highest gross annual revenue and an increase in revenue between 2016 and 2019, with a $21b increase from $158b to $179b. 

Wages

Average wages in the trade contractor industry are higher than the overall construction industry average by a significant amount. In 2017, trade contractors made an average of $56,548, while the national average in the construction industry was an annual salary of $51,117. Within the trade contractor industry, building equipment operators made the highest wages at an average of $83,736, although these positions do require additional training time compared to the average construction worker’s. 

Areas of Growth 

According to CareerCast, construction jobs were one of the top 10 toughest positions to fill in 2018. Construction laborers were rated overall as the 2nd hardest job to fill, and there is a reported 60% of contractors who have a higher demand for skilled laborers than the supply available to fill those positions. Additionally, overall construction employment has increased in 248 out of the 358 United States Metropolitan areas throughout the 2017 calendar year, with Riverside and Merced counties in California seeing the most notable increases in construction job gains at 12% and 38% respectively. 

Labor Shortages

Not all of the trends in the construction industry are looking upwards. Increasing material costs is one of the unfortunate construction industry trends that will continue into 2019. With more temperate weather and longer daylight hours comes an increase in demand for both materials and labor, driving up the price for both. The construction industry is facing an increase in construction costs year after year, making profit margins slimmer than ever. Additionally, construction material costs are facing a year-round pricing increase, rising nearly 5% during the 2018 calendar year.  

Nearly 80% of respondents to a survey in August 2017 report that firms are having difficulty filling hourly craft worker positions. With the shortage of labor and rising demand for materials, the construction industry faces an unavoidable increase in construction costs in 2020. However, firms can minimize the impact of these rising costs and maximize their profit margins by streamlining their construction processes.  

Opportunities for Trade Contractors Conclusion

Trade contracting is one of the fastest-growing subsectors of the construction industry, and for good reason. The lookahead for the trade contracting sector has one of the highest growth rates and employment opportunities of any sector in the United States. Trade contractors in all areas have high expectations, but industries such as electrical contracting, renewable energy, and machine operations have a particularly bright outlook ahead.