The Role of SMBs in the U.S. Construction Industry and Why They Matter

The Role of SMBs in the U.S. Construction Industry and Why They Matter

The construction industry is a critical sector of the US economy, responsible for building the homes, offices, and infrastructure that enable society to function. While large construction companies dominate the industry, small and medium-sized businesses (SMBs) also play a vital role in driving innovation, competitiveness, and job creation. In this article, we will explore the role of SMBs in the US construction industry and why they matter.

What are SMBs?

SMBs are small and medium-sized businesses, which are typically defined as businesses that have fewer than 500 employees. According to the Small Business Administration (SBA), small and medium-sized businesses account for 99.9% of all US businesses, and they employ almost half of the private-sector workforce.

In the construction industry, SMBs are typically defined as companies with annual revenues of less than $10 million. SMBs play a critical role in the US economy, creating jobs and driving economic growth, particularly in rural areas. They are also important in the construction industry, where they account for a significant portion of the sector’s output, employment, and innovation.

The Role of SMBs in the Construction Industry

Small and medium-sized businesses (SMBs) are the backbone of the construction industry. Despite being small, their impact in the construction industry cannot be overemphasized. Here are some of the major ways they contribute to the growth of the U.S. construction industry.

1. Job Creation

SMBs are major employers in the construction industry, creating jobs for skilled and unskilled workers. The U.S. Small Business Administration (SBA) reports that from 1995 to 2020, small businesses have created 12.7 million net new jobs while large businesses created 7.9 million. Small businesses have accounted for 62% of net new job creation since 1995. These jobs include everything from skilled tradespeople to project managers and engineers. Without SMBs, the construction industry would not be able to provide the same level of employment opportunities.

2. Competition

SMBs play an important role in promoting competition in the construction industry. When SMBs compete with larger companies, it helps to create a more level playing field and ensure that the industry operates efficiently. This competition can also drive down costs and encourage companies to innovate and improve their services.

3. Innovation

SMBs are also responsible for much of the industry’s competitiveness and innovation. These businesses are often more nimble and adaptable than larger companies, allowing them to quickly adopt new technologies and processes. This can lead to the development of new and more efficient construction practices, which can benefit the industry as a whole. For example, SMBs are at the forefront of the adoption of Building Information Modeling (BIM) technology, which allows construction professionals to create 3D models of buildings to optimize design and construction processes.

SMBs are also more likely to specialize in a particular niche or area of expertise, allowing them to provide highly specialized services that larger construction companies may not offer. This can help them stand out in the market and attract clients who are looking for specialized services.

4. Local Focus

Since SMBs are often locally owned and operated, they have a direct impact on the local economy. This can enable them to build strong relationships with clients and suppliers and to develop a deep understanding of local market dynamics. When SMBs are successful, they create jobs and generate revenue that stays within the community. This can have a positive ripple effect on other businesses in the area and contribute to the overall growth and development of the local economy. 

5. Contribution to the Economy

Construction SMBs make a significant contribution to the economy, generating revenue and paying taxes. They also contribute to the development of infrastructure and facilities, which can improve the quality of life for local communities.

6. Customer Service

SMBs are often known for providing exceptional customer service. Because they are smaller and more focused, they are able to provide a more personalized experience for their customers. For an SMB, every project matters. As a growing business, they cannot afford to have a bad reputation, so they ensure that all customers’ projects are properly managed.

Compared to larger companies, SME managers tend to be more accessible to clients, making it easier for them to discuss any aspects of their project and be more accountable to clients. In many cases, a designated partner is assigned to each project to take ultimate responsibility for the team’s performance.

Why SMBs Matter

SMBs are critical to the success and growth of the US construction industry. Their innovation, expertise, and commitment to quality and customer service make them indispensable partners in construction projects of all sizes.

SMBs are essential to the US construction industry for several reasons. First, they are critical to the industry’s output and employment. Without SMBs, the industry would be dominated by a few large companies, which would lead to less competition, fewer innovations, and higher costs for consumers.

Second, SMBs are crucial to maintaining the industry’s competitiveness and innovation. They are often more flexible than larger construction firms, as they can quickly adapt to changes in market conditions and adjust their business practices accordingly. This flexibility enables them to respond more quickly to client needs and deliver projects on time, and within budget.

Finally, SMBs are critical to the overall US economy. They are responsible for creating jobs and driving economic growth, particularly in rural areas. SMBs create around two-thirds of all net new jobs in the US, and they generate approximately half of the US GDP.


SMBs play a vital role in the US construction industry. They are responsible for much of the industry’s output and employment, and they are critical to maintaining the industry’s competitiveness and innovation. SMBs also contribute significantly to the overall US economy, creating jobs and driving economic growth. As such, policymakers and industry stakeholders must continue to support and promote the growth of SMBs in the US construction industry.

Tradelinks Solution is committed to helping all construction businesses grow, regardless of their size. We offer you streamlined recruitment services, allowing you to focus your efforts on other areas of your business. Contact us today to learn more about how our services benefit your business.