Construction company: average revenue, profit and margins

This article was written by our expert who is surveying the industry and constantly updating the business plan for a construction company.

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers

We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the construction company market.

What is the average annual revenue for a typical construction company today?

Most construction companies operate between $1M and $100M in annual revenue, with the median small contractor closer to the lower end.

Large contractors exceed $100M and global leaders reach multi-billion turnover, but most firms are small to mid-sized serving regional markets. Thailand’s total market revenue is estimated around ~$29.9B in 2025, with 5–6% CAGR supporting growth for capable entrants.

Set an initial target that matches your bonding capacity, crew size, and repeat-client potential; for many new general contractors, $1–3M in year 1–2 is realistic.

Price selectively, control scope, and build a reliable subcontractor bench to scale revenue safely.

You’ll find detailed market insights in our construction company business plan, updated every quarter.

How does revenue differ by company size (small, mid-sized, large)?

Revenue bands scale with crew count, bonding limits, and bid capacity; procurement systems and PM rigor unlock higher tiers.

Use the table below to benchmark realistic ranges and the operational levers that typically accompany each tier.

What net profit margin do construction companies usually achieve?

Typical net profit margin is 5–6% in 2025 for construction companies.

Top-quartile operators earn 8–10% net by selecting projects carefully, bidding with contingencies, and enforcing change orders. Underperformers slip below 3% when jobs are underbid or labor and materials spike without protection.

Hit your target by pricing overhead into every job, protecting markup on change orders, and monitoring WIP to catch margin fade.

Keep payroll utilization above 70% for field crews and maintain a 10–12% annual overhead ceiling when possible.

This is one of the strategies explained in our construction company business plan.

What are average gross margins, and how do residential, commercial, and infrastructure compare?

Gross margins for general contractors average 12–16%, while specialty trades often realize 15–25%.

The segment mix matters: residential tends to be more price-competitive, commercial offers better mix-adjusted margins, and infrastructure delivers strong gross but tight net after scale and risk.

How much revenue goes to direct costs (labor, materials, subs)?

Direct costs typically consume 75–85% of revenue for construction companies.

Field labor, material purchases, equipment, and subcontracted scopes dominate COGS; tight procurement and schedule control protect gross margin.

What share of revenue is spent on overhead (equipment, insurance, admin)?

Overhead typically runs 10–15% of revenue for construction companies.

The leanest firms hold overhead near 10% by outsourcing non-core functions, using cloud tools, and keeping G&A proportional to backlog.

Budget insurance, bonding, vehicles, and office costs directly into your fee model; do not leave them to “what’s left.”

Review overhead quarterly and trim items that do not move backlog, safety, or productivity.

We cover this exact topic in the construction company business plan.

What is the average EBITDA margin, and how has it changed recently?

Average EBITDA margins for construction companies sit around 7–12% in 2025.

Margin resilience improved versus pandemic lows as supply chains normalized and pricing power returned in select segments; disciplined firms regained 1–2 points through procurement and preconstruction rigor.

How do profits differ between general contractors and niche specialists?

Specialty contractors (electrical, plumbing, mechanical) often post higher gross margins (15–25%) than general contractors (12–16%).

However, general contractors can achieve similar net results on larger volumes by leveraging procurement, preconstruction fees, and better overhead absorption.

Design-build and design-assist models raise fee potential for both GC and specialty firms by integrating preconstruction early.

Choose a clear positioning—either GC orchestrating trades or niche expert with technical edge—and align pricing and staffing accordingly.

Get expert guidance and actionable steps inside our construction company business plan.

What factors most directly affect profit margins in construction?

• Contract type: cost-plus and GMP contracts reduce downside vs. lump-sum when scope is uncertain.
• Project selection: complexity, client sophistication, and team fit influence rework and change orders.
• Procurement timing: locking prices and long-lead items early protects gross margin.
• Schedule control: look-ahead planning, constraint removal, and crew flow maintain productivity.
• Geography and labor market: local wage rates, travel costs, and jurisdictional rules affect COGS.
• Change management: response time and documentation speed determine margin recovery.
• Subcontractor performance: prequalification, safety, and financial health reduce risk of defaults.

What is the average cash flow cycle from billing to collection?

Construction companies typically see a 60–120 day cash cycle from billing to collection.

Public projects and large private owners can extend timelines; strong lien rights, mobilization advances, and prompt pay clauses help.

How do construction companies benchmark performance against peers?

• Compare gross, net, and EBITDA margins to industry surveys (e.g., CFMA, CPA benchmarking studies).
• Track WIP accuracy (under/over billings), backlog gross margin, and margin fade from bid to closeout.
• Measure revenue per FTE, safety metrics (TRIR), schedule predictability, and change-order cycle times.
• Use regional and segment-specific data (residential vs. commercial vs. civil) for apples-to-apples comparisons.
• Review bonding ratios, cash conversion cycle, and days payable/receivable against industry medians.

What revenue growth and profitability trends are construction companies seeing in 2025?

Construction markets are growing at ~4–6% in 2025, with Thailand near ~5–6% on infrastructure and tourism-related investment.

EBITDA has stabilized in the 7–12% band for disciplined operators; net margins trend near 5–6% with upside to 8–10% for best-in-class firms focusing on preconstruction, procurement, and risk transfer.

Green construction, digital infrastructure, and design-build delivery are pulling above-average growth and fee potential.

For a new construction company, emphasize early vendor agreements, alternative delivery models, and tight change-order governance to capture these trends.

This is one of the many elements we break down in the construction company business plan.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Business Wire – Thailand Construction Industry Report 2025
2. Construction Dive – Top Contractors Revenue (2025)
3. Mordor Intelligence – Thailand Construction Market
4. James Moore CPAs – Construction Performance Benchmarks
5. Aladdin Bookkeeping – Construction Profit Margins
6. Autodesk Construction Cloud – Profit Margin in Construction
7. First Page Sage – EBITDA Multiples for Construction Companies
8. Yahoo Finance – Thailand Construction Industry Report 2025
9. Construction Coverage – U.S. Construction Spending Data
10. CSI Market – Construction Industry Profitability Ratios