New research shows that U.S. subcontractors spent $97 billion more on materials and labor last year than they had planned in 2022, impacting their profitability.
It’s well-known that inflation has driven up the cost of just about everything but the figures from a new study of subcontractor spending puts a hard – and troubling – number on building and construction costs.
According to the third annual National Subcontractor Market Report from Biild, a construction financial support firm based in Austin, TX, subcontractor spending on materials and labor was $97 billion more than planned. The resulting cost increases drove profits down 57% on average for those surveyed, even as top-line revenues grew for 61% of the respondents.
Biild said that the majority of the survey group paid for labor and materials before they were paid, with two and one-half months being the average wait time until they received payment for their jobs.
But the survey reported that nearly two-thirds of those surveyed were expecting their businesses to grow in 2023, though they didn’t necessarily see any relief in operating expenses. One-quarter of the subcontractors who answered the survey, Biild said, reported they were having difficulties getting financing for their projects.
Grow your business at the premier global woodworking trade show.
International Woodworking Fair
August 6–9, 2024
8:30 AM–5:00 PM
8:30 AM–2:00 PM
Georgia World Congress Center
285 Andrew Young International Blvd
Atlanta, GA 30313