The commercial specialty contractor industry is poised for growth in 2025, yet still faces a complex landscape of opportunities and challenges. A new ServiceTitan survey of 1,000+ business owners and executives shows they’re eager to expand but keep hitting operational roadblocks.
Growth ambitions and core challenges
The desire to win new projects (93%), improve project execution (59%) and diversify service offerings (43%) are top priorities for contractors pushing for growth. However, these goals are met with significant concerns. Labor shortages remain a top issue, with 55% of contractors raising wages to compete for skilled workers. The unpredictability of material costs also looms large, with 64% expecting increases, making accurate forecasting and margin protection more difficult.
Efficiency and profitability take center stage
Amidst these challenges, the report highlights the need for efficiency to ensure profitable growth. While contractors aim to increase revenue through new projects, there’s a heightened awareness that more business doesn’t automatically translate to more profit. Strategies to combat rising labor and overhead costs (63%), increasing material prices (51%) and prioritizing cash flow management (57%) are crucial. This includes focusing on timely and accurate billing (79%) and securing better material pricing through preferred suppliers (65%) or stronger relationships (40%).
Strategic bidding and workforce adaptation
Optimizing bidding strategies is another key area, with some contractors increasing bid volume to expand their client base (23%), while others are decreasing bids due to workforce limitations (46%). The persistent labor shortage is reshaping how contractors approach bids, project timelines and wages. With 40% citing it as a major risk, hiring (76%) and raising wages (55%) are common responses.
Zooming in on electrical contractor responses to our 2025 survey, 93% are focused on new project revenue growth while also looking to boost efficiency (61%). These results align with the overall growth of electrical construction, driven by evolving trends and demand for renewables, infrastructure and electrification. Software will be driving this growth, with 57% of electrical contractors reporting already using 2–3 different solutions for operations. All-in-one software suites, especially those specializing in industry-specific construction and commercial projects like ServiceTitan, offer the capability to alleviate project complexity and improve efficiency. Today, achieving sustained growth depends on effective adoption, deployment and utilization of the right technology.
The pivotal role of technology
Technology is emerging as a key tool for navigating these complexities. Contractors are increasingly investing in software to improve project execution (59%) and internal procedures (51%). Communication tools (80%), project management software (51%) and specialized workforce management software (40%) are widely adopted. While spreadsheets still see considerable use (49%), there’s a growing recognition of the need for more integrated solutions. Furthermore, artificial intelligence (A.I.) is beginning to make an impact, with 17% of respondents already seeing its influence, primarily in areas like document management (57%) and reporting (41%).
As we look ahead to 2025, the message from commercial specialty contractors is clear: the pursuit of growth is paramount, underpinned by a relentless focus on efficiency and profitability. For contractors aiming to secure their future, the question isn’t whether to invest in technology, but how to leverage the right, industry-specific solutions—like those offered by ServiceTitan—to streamline operations and build a more resilient and profitable business.
Download ServiceTitan's Commercial Construction Report to see our full report on how industry trends will impact contractors in 2025.
