**Despite Ongoing Headwinds, Commercial Contractors Remain Optimistic**
As the construction industry moves into the second half of 2025, general contractors continue to navigate several persistent challenges. Labor shortages, rising overhead costs, and longer lead times on materials are pressing concerns. Yet, according to a recent survey by ServiceTitan, optimism among trade professionals remains high.
The survey, which collected responses from 1,000 trade owners and executives, showed that 66% entered 2025 with stable or increasing revenues.
“I was pleasantly surprised to see such strong early positive results from contractors,” said Alex Kablanian, Senior Vice President and General Manager of Commercial & Construction at ServiceTitan. “Time and again, commercial contractors prevail, whether they are facing macroeconomic pressure, regulatory changes, or market shifts.”
*Alex Kablanian*
### Key Challenges Facing Contractors
Despite the overall positivity, contractors also voiced clear concerns:
– **73%** anticipate a rise in material costs, with **59%** indicating this could impact profitability.
– **70%** are dealing with operational inefficiencies, such as difficulty accessing warranty and service data quickly.
– **54%** expect lead times to increase by two weeks or more.
Kablanian noted that contractors in non-MEP (Mechanical, Electrical, Plumbing) trades were generally more cautious. Additionally, firms with fewer than 20 technicians reported lower levels of optimism—only 47% felt positive, while 27% were neutral and 20% pessimistic.
“These numbers suggest that smaller contractors and those outside core trades are more impacted by the market’s uncertainty,” Kablanian explained. “The macro climate’s frequent shifts likely contribute to this ‘wait and see’ neutral group and those already feeling negative effects.”
Another pressure point comes from tariffs and global trade factors. A full **73%** of respondents expect material prices to climb due to inflation triggered by international trade developments.
### Solutions: Technology and Training
Still, complaints are not the dominant theme. Contractors are actively taking steps to mitigate these issues. Many are investing in workforce training and skills development. Technology is also playing a major role in the response strategy.
Kablanian reported:
– **48%** of contractors plan to invest in new technology.
– **38%** will consolidate their existing tech tools to improve efficiency.
The goal is to streamline operations—reducing administrative burden, enhancing communication, and enabling real-time access to critical data.
To combat delays and increasing lead times, contractors are shifting to earlier procurement practices and building flexibility into project schedules. Technology, again, supports better inventory visibility and demand forecasting, helping prevent shortages and delays.
### Optimism Built on Resilience
Perhaps the most notable finding: optimism has grown. In 2024, 39% of respondents reported a positive outlook. This year, that number rose to **53%**.
Kablanian attributes this growth to greater flexibility and improved access to evolving technologies: “These tools equip contractors with the resources they need to navigate headwinds more easily.”
Looking ahead, emerging technologies like artificial intelligence also show potential to improve scheduling, predictive maintenance, field support, and proposal development.
“Despite persistent challenges like labor shortages and rising costs, the commercial service sector demonstrates remarkable resilience and optimism,” Kablanian concluded.
