NAICS Sector 23 – Construction With a View of Whole Industry Sector

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Contractors and engineers working in the construction industry include businesses with a focus and engagement of designing, along with the construction and erection of buildings.(e.g., highways and utility systems). Businesses primarily engaged in the preparation of locations for new construction that includes contractors engaged in subdividing land for sale as building sites may also be included in this industry and NAICS sector.

Services performed include new work, additions, alterations, updates, or maintenance and repairs. Activities of these establishments typically are managed at a set location, for example, the mailing address, albeit usually perform construction activities at various and somethings multiple project sites. Production responsibilities for contractorsr are normally specified in:

- Contracts with the owners of construction projects (prime contracts) or

- Contracts with other construction establishments (subcontracts).

Hiring a Subcontractor, What You Need To Know For Insurance

Establishments primarily engaged in contracts that include responsibility for all aspects of individual construction projects and the sub-contractors that typically perform the work are commonly known as general contractors (GC).

The may be known as design-builders, construction managers, turnkey contractors, or (in cases where two or more establishments jointly secure a general contract) joint-venture contractors. General Contractors that perform less than 50 percent of the work are sometimes referred to as “paper contractors,” and the term becomes increasingly common as the percent of work sub-contracted out increases above 50 percent.

Construction managers that provide oversight and scheduling only (i.e., agency), as well as construction managers that are responsible for the entire project (i.e., at risk), are included as general contractor type establishments.

General contractors often orchestrate the construction of separate parts of their projects through subcontracts with other construction establishments.

Establishments primarily engaged in activities to produce a specific component (e.g., masonry, painting, and electrical work) of a construction project are commonly known as specialty trade or artisan contractors. Activities of specialty trade contractors are often subcontracted from other construction establishments, but especially in remodeling and repair construction, the work may be done directly for the owner of the property.

Establishments primarily engaged in activities to construct buildings to be sold on sites that they own are known as for-sale builders, but also may be known as speculative builders or merchant builders. For-sale builders produce buildings in a manner similar to general contractors, but their production processes also include site acquisition and securing of financial backing.

For-sale builders are most often associated with the construction of residential buildings. Like general contractors, they may subcontract all or part of the actual construction work on their buildings.

There are substantial differences in the types of equipment, work force skills, and other inputs required by establishments in this sector. To highlight these differences and variations in the underlying production functions, this sector is divided into three subsectors.

Subsector 236, Construction of Buildings, comprises establishments of the general contractor type and for-sale builders involved in the construction of buildings.

Subsector 237, Heavy and Civil Engineering Construction, comprises establishments involved in the construction of engineering projects. Subsector 238, Specialty Trade Contractors, comprises establishments engaged in specialty trade activities normally needed in the construction of all types of buildings.

Force account construction is construction work performed by an enterprise primarily engaged in some business other than construction for its own account, using employees of the enterprise. This activity is not included in the construction sector unless the construction work performed is the primary activity of a separate establishment of the enterprise.

The installation and the ongoing repair and maintenance of telecommunications and utility networks is excluded from construction when the establishments performing the work are not independent contractors. Although a growing proportion of this work is subcontracted to independent contractors in the Construction sector, the operating units of telecommunications and utility companies performing this work are included with the telecommunications or utility activities.

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