Construction Industry Overview

The Construction Industry

• The construction industry involves design, new and renovation construction, and the manufacture and supply of building materials and equipment.
• It is one of the largest industries in the U.S., historically accounting for about 10% of the nation's gross national product (GNP).
• The industry employs approximately 10 million workers.
• The annual construction volume in the U.S. has exceeded $800 billion in recent years.

Career Opportunities and Income

• Construction is a dynamic industry that often provides high income for workers and contractors.
• However, the seasonal and sporadic nature of work can reduce annual income for many workers.
• Construction contracting is competitive, with a high bankruptcy rate.

Nature of Construction

• Construction combines art and science, requiring technical understanding, business, and management knowledge.
• Practical experience is essential in construction, and students are encouraged to observe and participate in construction activities.
• The industry requires innovation and professional competence, with technological development and international competition driving changes.

Construction Contractors

• Construction contractors engage in the business of construction and can be general contractors or specialty contractors.
• General contractors engage in a wide range of construction activities and execute most major construction projects.
• Specialty contractors limit their activities to specific construction specialties and are often employed by prime contractors.

Contractual Relationships

• The terms "subcontractor" and "prime contractor" are defined by their contract arrangement, not by their work classification.
• A specialty contractor can be a prime contractor if they contract directly with the owner.
• A general contractor can be a subcontractor if employed by a specialty contractor for specific tasks.

Industry Statistics

• There are over 800,000 construction contractors in the United States, with 60% of these firms employing three or fewer workers.
• Contractors with 100 or more workers make up less than 1% of construction firms, but account for about 30% of the value of work performed.
• There is a trend towards large construction firms capturing an increasing share of the total U.S. construction market.

Construction Industry Divisions

• The construction industry is divided into major segments, including building construction (vertical construction).
• Building construction involves the construction of buildings, including public and private, residential and non-residential building construction.
• Public building construction includes government-funded projects, while private building construction includes projects funded by private entities.
• Residential building construction includes single-family homes, apartments, and condos, while non-residential building construction includes commercial buildings, office spaces, and industrial facilities.