In 2024, the revenue for Top 400 contractors increased by 13.9%, reaching $556.9 billion, with the median firm revenue also rising 10.9% to $629.5 million. Of the firms surveyed, 77.3% reported increased general contracting revenue, slightly down from 78.9% last year. Despite the revenue growth, challenges like interest rate hikes have made construction loans harder to obtain, causing delays in project starts for some firms like Primus Builders.
Inflation remains above Federal Reserve targets, but many contractors are finding cost increases more manageable. The ability to handle inflation depends on each firm’s ability to adjust strained labor resources. Revenue has grown across most sectors, especially in manufacturing (up 74.8%), petroleum (up 46.7%), and sewer/waste (up 38.8%). The manufacturing sector saw a remarkable 201% growth in general contracting revenue from 2021 to 2023.
Federal programs like the Bipartisan Infrastructure Law and the CHIPS and Science Act have fueled many new projects. However, some sectors, like multifamily residential, are slowing due to high interest rates, leading to delayed or canceled deals. Firms like Wieland and MYCON are adjusting their portfolios as owners shift to sectors with quicker returns.
Most contractors remain profitable, with 97.5% reporting domestic profits and 97.1% seeing international gains. The median domestic profit margin rose to 4% from 3.2% last year. However, Top 400 firms continue to face pressure to maintain profitability due to shifting project schedules, supply chain disruptions, and labor demands. In the energy sector, the transition to electric vehicles is creating a steep learning curve for contractors to develop electric infrastructure and manufacturing projects.
For firms like Gray Construction, the Inflation Reduction Act and CHIPS Act have spurred new opportunities in electric vehicles, solar panels, and semiconductors. To mitigate risks, Gray has developed a collaborative preconstruction phase, engaging all stakeholders to optimize value and ensure project predictability.