“Tariffs, inflation, fluctuating interest rates, shifting consumer sentiment and geopolitical tensions—all have real implications for project viability and cost,” says Erik Haslem, CEO of contractor BHI. “They reflect the broader volatility we’re seeing across the AEC industry.”

Top 400 contractors reported $600 billion in total revenue last year—up 7.9% for listed firms even as they balance limited labor resources against rising construction costs and rapidly shifting project demands.

Clayco CEO Anthony Johnson says labor shortages “remain a persistent issue” in the industry, “impacting timelines and productivity.” Adding to that, Johnson says “changes in policies, client demands and economic conditions require agility and proactive planning,” which can put more pressure on labor resources to prevent projects from being shelved.

Johnson says that Clayco, like many Top 400 firms, is focused on “building resilient teams, investing in workforce development and adapting our operations to stay ahead of where the market is going.”

According to economists, the deployment of Trump’s tariff policy over the next few months will be key in determining that direction.

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Shifting Politics, Policies and Priorities

Cover illustration by Aaron Stouffer, Post & Beam, postandbeamaz.com

For some Top 400 firms, collateral damage from tariff hikes already is evident. Gabe Rodriguez, Barton Malow vice president of strategy and environmental analysis, says tariffs have “significantly impacted” the contractor’s business.

“As a Michigan-based contractor with close ties to Canada, we have been very vigilant about our procurement strategy,” he says. The company identified a tariff risk of $15 million, or 50%, of materials costs, on a client’s planned purchase of $30 million in curtainwall material from a Canadian facility. Rodriguez says his team found a domestic alternative with a guaranteed price increase cap of $3.9 million that “would not fluctuate with changes in tariff policy.”

He adds, “Cost uncertainty drives a lot of risk for our clients, and they are actively seeking ways to reduce their construction cost uncertainty in this environment.”

Jeff Bean, Q&D Construction president of heavy/civil, says he expects “suppliers are going to stop honoring their prices and contractors are going to look to owners for reimbursement of additional costs.”

He adds, “It is adding serious uncertainty and risk. We don’t know what products are affected from where, when or at what magnitude.”

Market Movers and Shakers

All of the key construction markets that ENR tracks grew between 2023-24, with the exception of industrial process projects, which fell 9.9%. Telecommunications saw the largest growth, up 59.7% from last year, and 188.5% since 2021. Sewer and waste rose 23.7%; power was up 18.9%; oil and gas grew 16.6% and transportation climbed 11.4%. The sewer and waste market has increased 71.7% over the past two years.

Among Top 400 listed firms, HITT Contracting and Holder Construction both reported large revenue jumps driven by work in telecommunications.

“Unlike consumer spending, which quickly responds to economic changes, the commercial construction industry is buffered by a backlog of funded projects,” says HITT CEO Kim Roy. “As a result, we typically feel the impact of a contraction 12 to 18 months later than other sectors.”

Total domestic revenue for Top 400 contractors increased 8.7%, to $567.1 billion in 2024. Firms also reported a strong rise in domestic new contract totals between 2023 and 2024, up 14.4% to $588 billion. Median new contract totals rose 7.7% to $669.02 million.

Also, 97.1% of reporting firms say they made a domestic profit, in line with previous years.

Ups and Downs

Median firm revenue stayed virtually flat between 2023-24, after rising double digits during the previous two Top 400 survey cycles. Of 375 firms that filed both this year and last, 64.8% reported an increase in revenue. The previous reading for that number was 77.3%. Overall, 57.5% of reporting firms say they have a higher backlog than on last year’s list, slightly up from the 2024 Top 400 proportion, but still down substantially from 72.7% two years ago. Just over 25% of firms on the 2025 survey say their backlogs have shrunk.

Related to non-U.S. markets, revenue dropped 5.1% from 2023-24, to $33.5 billion from $35.3 billion. This continues a long-term trend of Top 400 Contractors moving away from work outside the country. In 2015, 84 of the Top 400 reported some international general contracting revenue, making up 19% of their total revenue that year. In 2025, 56 firms reported non-U.S. revenue making up only 5.5% of the total.

Kitchell Corp. CEO Wendy Cohen says the contractor is “seeing volatility” amid shifts in federal funding and “looming tariff discussions” which could “drive up costs.” However, Cohen adds that, “at the same time, there’s a lot of momentum—clients are eager to build. It’s a complex moment in the market, but one filled with opportunity.”

Bechtel says the firm notes strong demand for general contracting services in nuclear power, LNG, critical minerals and advanced manufacturing. The contracting giant attributes the demand to a global push for cleaner energy and “a sharper focus on secure, domestic supply chains,” adds Peter Nelson, manager of corporate planning.

“Our projects are advancing, and we’re seeing strong growth across the business,” says Nelson.

Leveraging Labor Resources

Top 400 firms say they expect last year’s challenges to carry over into this year, with many amplified by dwindling labor pools and availability.

“Labor scarcity can impact our ability to scale quickly, meet aggressive schedules and deliver the level of quality we expect on every job,” says Rick Davenport, president and COO of Samet Corp. “This challenge is not unique to us—it’s systemic in the AEC industry.”

In response, the firm is doubling down on proposed solutions, such as investing in workforce development and supervision, he says, “ensuring we have well-trained, engaged field leaders who can support our teams and trade partners.”

Davenport says that includes “everything from recognition programs to building covered wellness areas on the jobsite where our trade partners can take breaks from the heat, warm their food and have a clean place to sit and enjoy their lunch.”

The Trump administration crackdown on undocumented U.S. workers and its immigration policies more generally have added to labor pressures for some Top 400 firms as they look to recruit and retain talent internationally.

“We’re closely monitoring labor and immigration changes as they directly impact our workforce,” says Vincent Lai, vice president of estimating at Bernards. “Our proactive approach includes mentorship, training programs, competitive wages and fostering a diverse and inclusive workplace. These efforts help us retain and grow talent while preparing for future shifts in workforce policy.”

Innovating Under Pressure

In the face of market challenges, Top 400 firms say shifting market conditions have been an opportunity for them to innovate operations and home in on the work they do best as contractors.

Knutson says it secured projects in the education and health care sectors over the past year came by “concentrating our efforts in markets where we excel.”

Joeris General Contractors President Burton Hackney says the firm has been able to scale operations while maintaining its culture and talent. “Through highly intentional talent development initiatives and leadership mentoring programs, we’ve successfully preserved our collaborative, client-focused culture,” he adds.

Jim Radich, recently retired Granite Construction chief operating officer and executive vice president, says the firm has had numerous projects on which it has been able to bake innovations into the design and permitting stages to reduce risk and save time and money. The company says it is continuing to focus on early contractor involvement and qualifications-based selection procurement.

“All markets are facing ongoing uncertainty around geopolitical issues, tariffs, interest rates supply chain disruptions and labor constraints,” says William "Bill" H. Goodrich, Chairman and CEO of LeChase Construction Services LLC. “Rather than take an alarmist view, we choose to be realistic and responsive in how we navigate the challenges,” he says.

Looking at Key Sectors

General Building

New Office Tower Includes Transit Access

Turner is constructing a 46-story building that will connect to Grand Central

Turner Construction has started building a 46-story commercial office tower on Madison Avenue in Manhattan. The 930,000-sq-ft project, designed by Kohn Pederson Fox, includes an underground entrance that will provide access to Grand Central’s Madison Concourse between 44th and 45th Street.
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Transportation

Upgrading a Link in California's Capital City

Rehab of the American River Bridge in Sacramento addresses spall, scour

The $239.5-million rehab of the American River Bridge in Sacramento, Calif., will reach a milestone this month, with the CM/GC joint venture of Granite Construction Inc. and California Engineering Contractors completing final deck pours.
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Power

US Commercial Uranium Enrichment Expands

Planned $1.5B facility backed by investor Peter Thiel is among efforts to propel domestic nuclear power

General Matter, a nuclear energy firm, has signed a lease with the U.S. Energy Dept. to build a $1.5-billion commercial uranium enrichment facility at the former federal Paducah Gaseous Diffusion Plant in Paducah, Ky., to expand U.S. nuclear power.
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Oil and Gas

What's Next After LNG Canada Startup?

Expansion study launched but no final investment yet, as energy markets shift

Selection last month of Fluor Corp. and JGC Corp. as front-end engineering and design contractor for Phase 2 of the massive LNG Canada liquefied natural gas export terminal in British Columbia was a hopeful sign to that sector that its newly opened 14-million-ton-per-year predecessor would have a final investment decision to build a companion.
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Environment

Water Quality Project Reaches Milestone

Part of $341-million California ultraviolet treatment plant will be 65 ft underground

Construction on a $341-million water quality improvement project for California’s East Bay Municipal Utility District reached the halfway mark this summer as crews began concrete pours at portions of a large drinking water treatment facility located 65 ft beneath ground level.
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Manufacturing

Building to Boost Capacity and Resilience

Roche subsidiary Genentech plans its first East Coast manufacturing plant

Genentech, a South San Francisco, Calif.-based subsidiary of European biotech company Roche Group, plans to build a $700-million manufacturing facility in North Carolina.
Read more —>