**Specialty Contractors Push for Growth Amid Rising Costs and Labor Shortages**
Real estate construction relies on a collaborative effort involving developers, general contractors, and specialty trades such as plumbers, electricians, and HVAC technicians. Despite playing a critical role, specialty contractors often work behind the scenes and go unheard.
That is beginning to change.
ServiceTitan, a leading trades software platform, partnered with Thrive Analytics to survey over 1,000 specialty trade professionals to gain insights into their goals and challenges for 2025. The findings provide a revealing look into the current state of the industry.
**Key Survey Insights:**
– **Growth with Challenges:**
– 93% of respondents are focusing on securing new projects.
– However, 64% indicated rising material costs are making it more difficult to accurately forecast job expenses and maintain profit margins.
**Efficiency as a Priority**
Specialty contractors are increasingly recognizing that revenue growth does not always equal profitable growth. Alongside the challenge of rising material prices:
– 63% cite increased labor and overhead costs as major factors eroding profits.
– 57% are putting higher emphasis on cash flow management to maintain financial stability.
– 43% are expanding service offerings to diversify revenue streams and navigate market volatility.
**Tackling the Labor Shortage**
The skilled labor shortage remains a widespread concern, with 76% actively hiring. To address the issue:
– 55% are raising wages to attract and retain talent.
– 80% are leveraging communication tools to enhance team coordination.
– 51% are adopting project management software to increase efficiency and productivity.
**Embracing Technology**
Technology is viewed as a vital solution across several business areas, including labor, rising operational costs, and cash flow concerns:
– 40% are using specialized workforce management software.
– 30% plan to make new tech investments in the near future.
– 17% report that artificial intelligence is already positively impacting their business operations.
– Despite increasing adoption, 49% still depend on spreadsheets, indicating further opportunities for digital transformation.
**Industry Outlook**
“The commercial sector is in the midst of a perfect storm with a fluctuating economy, regulatory changes, and rising costs,” said Alex Kablanian, ServiceTitan’s Vice President and General Manager of Commercial & Construction Markets. “In this challenging landscape, adopting innovative technology, including artificial intelligence, is essential for streamlining operations and driving profitable growth even in uncertain times. Historically, we’ve seen the best operators use periods like this as a catalyst to harden their business and build long-term durability, and it’s our job to help our customers make that happen.”
As specialty contractors push forward, technological adoption, workforce development, and strategic planning will be crucial tools for transitioning from survival to sustainable growth in a complex construction landscape.
