Today, Stratus has released its 2025 State of the MEP Industry Report, based on responses from over 140 construction executives across mechanical, electrical, and plumbing trades. The report documents how contractors are managing steady demand while navigating labor shortages, rising material costs, and increasing execution pressure.

“The goal of this report is simple: to turn insight into action by helping preconstruction groups, design teams, fabrication managers, field operations, project management teams, and executives at MEP contractors understand where the industry stands today and how a connected, data-driven future becomes a competitive advantage,” said Jake Olsen, CEO of Stratus.

The findings show modest overall growth paired with a widening separation between firms that rely on connected planning and those still operating with fragmented workflows.

Key findings include:

• Growth is steady but uneven. Median year-over-year revenue growth reached 4.5%, with larger and more digitally prepared firms reporting stronger gains in revenue and headcount.
• Labor constraints continue to tighten. More than half of contractors report worsening hiring conditions, especially in fabrication and field installation roles.
• Material costs outpace wages. Material prices rose by an average of about 8%, placing continued pressure on margins.
• Fabrication is becoming a coordination function. Contractors increasingly rely on fabrication to connect design, purchasing, shop work, and installation.
• Operational visibility remains limited. Fewer than 30% of firms track productivity tied to VDC hours, shop throughput, or material logistics, often leading to rework and schedule delays.

Looking ahead, contractors expect demand to remain stable into 2026 and plan to invest in systems that improve planning and execution. More than two-thirds of respondents plan to increase spending on software and automation, with model-based estimating, digital field tools, fabrication planning, and applied AI cited as the strongest drivers of near-term performance.

“Investing in technology hasn't always been perfect, but the lessons learned have been invaluable,” said Rob Cross, COO of Baker Group. “The fabrication software we use has given us the real-time analytics, documentation, and production visibility we once only hoped for. We simply couldn't have scaled fabrication as quickly or as confidently without it.” 

To access the full Stratus State of the Industry Report, visit www.stratus.build.