One of the clearest signals in the current market is intensified competition at the subcontractor level. E1 (EstimateOne) platform data reveals that the pool of active subcontractors tendering for work has grown, even as the number of head contractors (builders) putting out projects remains relatively stable.
In the last year, approximately 8,000–10,000 subcontractor companies submitted bids or quotes via the E1 (EstimateOne) platform, compared to about 400–500 head contractor firms issuing tenders (simulated figures). This implies a subcontractor-to-builder ratio on the order of 20:1, highlighting the vast ecosystem of trades and suppliers vying for each builder’s projects.
Not only are there many subcontractors in absolute terms, but each project attracts numerous bids. Builders report inviting a larger number of trades per tender on average than in the past. Figure 3 illustrates this trend.
Figure 3: Average number of subcontractor quotes per tender
This uptick in bidding activity indicates that contractors are casting wider nets and more firms are chasing each opportunity – a clear sign of a competitive market. From the supplier perspective, if you are typically involved in tendering (either as a subcontractor or as a product supplier through sub-contractors), expect more rivals and tighter margins. It becomes even more critical to differentiate your bid (through superior terms, technical qualifications, or spec influence).
However, this rising competition exists alongside a paradox: the industry is simultaneously experiencing skilled labour shortages and subcontractor capacity issues. In surveys, a staggering 91% of builders cited trades labour shortages as a key challenge in 2023[3], and many also noted a spate of subcontractor insolvencies undermining project delivery[22]. Top builders like Hutchinson Builders have even resorted to self-performing more work internally because certain subcontractor trades are in short supply or have become less reliable[10].
How do we reconcile these trends? Essentially, the construction market has plenty of contractors in quantity, but not all have the capacity or reliability needed. There’s a stratification: the best subcontractors are extremely busy (some turning down work or being more selective), while a long tail of smaller contractors competes aggressively for remaining jobs, often driving prices down.
Trade-wise disparities also exist in activity. Trades like electrical, plumbing, and interior finishes tend to have the highest number of bidders per job (reflecting a large number of firms in these trades across each region). In fact, critical trades such as electricians, plumbers, and carpenters are in extremely high demand – 2025 will continue to see shortages in these key trades, which some experts describe more as a “talent” shortage (lack of sufficiently skilled crews) than just a headcount shortage[23].
On the other hand, highly specialised subcontractors (for example, façade engineers, lab equipment installers, etc.) may face less competition but are fewer in number, which can cause project delays if they are overbooked.
The builder side of the equation
The builder side of the equation shows a relatively stable or slightly consolidating market. The top 10-20 head contractors on E1 (EstimateOne), a mix of large Tier-1 firms and prominent mid-tier builders, account for a significant chunk of tenders. Many have consistent annual workloads. What’s interesting is the behaviour: some mid-tier builders are bidding more aggressively outside their traditional geography or sector to secure work (e.g. a Victoria-based builder pursuing projects in Queensland, or a retail specialist bidding for a school project).
This broadening strategy by builders means suppliers might encounter new entrants in your local market or unfamiliar companies leading a project – a reminder to expand your network and not rely solely on known clients.
Suppliers, take note: Manage risk, focus on specification selling
From a supplier action standpoint: if you supply to subcontractors, note that smaller contractors might be under financial strain due to the competitive low-bid environment and rising costs. Ensuring credit risk management and flexible terms could help maintain healthy relationships. If you deal directly with builders or as a subcontractor yourself, emphasise your track record and reliability; builders are increasingly wary of subcontractor default risk and may favour those with proven capacity.
Also, consider targeting projects where competition is slightly less fierce – for instance, regional projects: nearly 80% of small contractors said they could take on more work in rural/regional areas, compared to 64% who could in metro areas[24]. This suggests that regional projects might face fewer bids (and higher chances for those who do pursue them) than saturated metro jobs.
In summary, the subcontractor-builder dynamic is one of heightened competition mixed with capability constraints. For suppliers, it means more potential customers to sell to (as many new subcontractors enter the fray), but also the need to pick partners wisely (those who will actually win and execute the projects).
It also underscores the value of specification selling – influencing the project upstream – so that among the many bidders, those carrying your product have an edge or even a requirement in the tender. We’ll discuss specification trends next.
Continue to page four: Specification and keyword trends in tenders
