Why don’t construction firms make money?

Freddie Mac

Freddie MacAn NAHB analysis takes a look at reasons companies fail to operate profitably.

By John McManus | Builder

Do you suppose there’s any possible connection here? Skilled construction labor capacity is getting tougher and tougher to count on, and, by the way, two out of five construction firms either merely break even or lose money?

Here, a National Association of Home Builders economics department analyst Benjamin Whetzel checks in on the Census’s Annual Survey of Entrepreneurs data indicating 61.3% of American construction firms are profitable commercial enterprises.

The good news is, that’s not much worse a performance than turned in by American entrepreneurs across all fields of business. Whetzel notes that the shares of construction businesses recording positive profits, breaking even, and sustaining losses are all within 1.2 percentage points of the averages across all U.S. industries, albeit slightly to the worse.

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