Significant Points

• About 65 percent of construction operations employ fewer than 5 people.
• Construction includes a very large number of self-employed workers.
• There are three major industry segments: building construction; heavy and civil engineering contractors; and specialty trade contractors.

Nature of the Industry

The construction industry is divided into three major segments. The construction of building segment includes contractors, usually called general contractors, who build residential, industrial, commercial, and other buildings. Heavy and civil engineering construction contractors build sewers, roads, highways, bridges, tunnels, and other projects. Specialty trade contractors perform specialized activities related to construction such as carpentry, painting, plumbing, and electrical work.

Construction usually is done or coordinated by general contractors, who specialize in one type of construction such as residential or commercial building. They take full responsibility for the complete job, except for specified portions of the work that may be omitted from the general contract. Although general contractors may do a portion of the work with their own crews, they often subcontract most of the work to heavy construction or specialty trade contractors.

Specialty trade contractors usually do the work of only one trade, such as painting, carpentry, or electrical work, or of two or more closely related trades, such as plumbing and heating. Beyond fitting their work to that of the other trades, specialty trade contractors have no responsibility for the structure as a whole. They obtain orders for their work from general contractors, architects, or property owners. Repair work is almost always done on direct order from owners, occupants, architects, or rental agents.

Recent Developments

Construction is heavily dependent upon business cycles. Changes in interest rates and tax laws affect individual and business decisions related to construction activity. State and local budgets affect road construction and maintenance. Changes in regulations can result in new construction or stop planned projects. The effects of these various influences can be short term or long term.

Working Conditions

Hours: Most employees in this industry work full time with many working more than 40 hours a week. In 2006, about 20 percent of construction workers worked 45 hours or more a week. Construction workers may sometimes work evenings, weekends, and holidays to finish a job or take care of an emergency. Construction workers must often contend with the weather when working outdoors. Rain, snow, or wind may halt construction work. Workers in this industry usually do not get paid if they can't work due to the weather.

Work environment: Workers in this industry need physical stamina because the work frequently requires prolonged standing, bending, stooping, and working in cramped quarters. They also may be required to lift and carry heavy objects. Exposure to weather is common because much of the work is done outside or in partially enclosed structures. Construction workers often work with potentially dangerous tools and equipment amidst a clutter of building materials; some work on temporary scaffolding or at great heights and in bad weather. Consequently, they are more prone to injuries than are workers in other jobs. In 2006, cases of work-related injury and illness were 5.9 per 100 full-time construction workers, which is significantly higher than the 4.4 rate for the entire private sector. Workers who are employed by foundation, structure, and building exterior contractors experienced the highest injury rates. In response, employers increasingly emphasize safe working conditions and habits that reduce the risk of injuries. To avoid injury, employees wear safety clothing, such as gloves and hardhats, and devices to protect their eyes, mouth, or hearing, as needed.

Employment

Construction, with 7.7 million wage and salary jobs and 1.9 million self-employed and unpaid family workers in 2006, was one of the Nation's largest industries. Construction also maintains the most consistent job growth. About 64 percent of wage and salary jobs in construction were in the specialty trades, primarily plumbing, heating, and air conditioning; electrical; and masonry. Around 24 percent of jobs were mostly in residential and nonresidential construction. The rest were in heavy and civil engineering construction.

Employment in this industry is distributed geographically in much the same way as the Nation's population. There were about 883,000 construction establishments in the United States in 2006: 268,000 were building construction contractors; 64,000 were heavy and civil engineering construction or highway contractors; and 550,000 were specialty trade contractors. Most of these establishments tend to be small; 65 percent employed fewer than 5 workers. About 11 percent of workers are employed by small contractors.

Construction offers more opportunities than most other industries for individuals who want to own and run their own business. The 1.9 million self-employed and unpaid family workers in 2006 performed work directly for property owners or acted as contractors on small jobs, such as additions, remodeling, and maintenance projects. The rate of self-employment varies greatly by individual occupation in the construction trades, partially dependent on the cost of equipment or structure of the work.

Befits and union membership: About 15 percent of construction trades workers were union members or covered by union contracts, compared with 13 percent of workers throughout private industry. In general, union workers are paid more than nonunion workers and have better benefits. Many different unions represent the various construction trades and form joint apprenticeship committees with local employers to supervise apprenticeship programs.

Additional Information

Associated Builders and Contractors, Workforce Development Department
Associated General Contractors of America, Inc.
National Association of Home Builders
NAICS Code: 23
Source: Bureau of Labor Statistics Construction Industry Information