Drywall and Insulation Contractors

The 19,495 Drywall and insulation contractors in the US perform drywall work, plaster work, and building insulation work for residential and nonresidential buildings. They may also install ceiling tiles, perform fireproofing work for buildings, and do framing or painting work. Work is performed for new building construction, renovations and additions to existing buildings, and maintenance and repair of existing installations.

Dependence on Construction Activity

Demand for drywall and insulation contractors is highly dependent on residential and nonresidential construction activity.

Reliance on Immigrant Workers

The construction industry in general and drywall and insulation contractors in particular, are highly dependent on immigrant workers to fill lower skilled positions.

Aug 9, 2026 - New Law Could Help US Housing Market

• The New York Times reports that the 21st Century ROAD to Housing Act is the largest federal housing effort in a generation. Still, it is unlikely to quickly reduce rents or home prices because it provides little funding and leaves key decisions to state and local governments. The bipartisan law streamlines some housing programs, rewards cities that ease development rules, supports build-to-rent communities, and removes barriers to manufactured and modular construction. Its biggest effect may be signaling broad support for increasing housing supply, although zoning limits, permitting delays, interest rates, and long construction timelines will continue to constrain results. Any eventual increase in multifamily, single-family rental, manufactured, or modular housing could expand project opportunities for drywall and insulation contractors, but demand may grow slowly and vary widely by market.
• US construction and engineering spending is expected to decline 1% in 2026 after remaining flat in 2025, according to FMI's third-quarter 2026 North American Engineering and Construction Outlook. Office construction is projected to grow 2%, with a 21% increase in data center spending offsetting continued weakness in traditional office construction. Amusement and recreation (+2%), transportation (+1%), and communication (+3%) also remain stable. Several building segments are expected to decline, including lodging (-9%), commercial (-5%), health care (-0.2%), education (-1%), and public safety (-4%). Manufacturing construction is forecast to fall 17% as semiconductor fabs and battery plants move beyond their most spending-intensive phases. Residential construction remains constrained by elevated mortgage rates and affordability pressures. Single-family spending is projected to drop 4%, while multifamily spending declines 1% as rents remain soft and concessions limit new development. Residential improvements are expected to rise by 5%, supported by home equity financing and inflation in renovation costs.
• Home remodeling spending growth is expected to slow through mid-2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in July by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase by 2.1% to $517 billion in the third quarter of 2026, compared with Q3 2025. In the fourth quarter of 2026, remodeling spending will again rise by 2.1% from Q4 2025 to $520 billion. Spending growth will then slow to 0.7% in the first quarter of 2027, reaching $524 billion. In the second quarter of 2027, year-over-year spending is forecast to rise just 0.5%, dropping to a total of $519 billion. Remodeling, permitting, and building product sales have remained flat recently, and remodeling activity growth is projected to remain sluggish absent a rebound in US home sales.
• Some deep-pocketed investors are betting on the long-term viability of the US home-building market, despite ongoing industry challenges, according to The Wall Street Journal. Berkshire Hathaway's agreement to acquire builder Taylor Morrison in May followed several recent US home builder purchases by Japanese firms. Large investors see opportunities to improve efficiency through modular construction. About 15% of new homes in Japan use modular construction, but only 3% of new US homes do, according to UBS. A UBS study suggests modular building can reduce waste by 20%, helping builders cope with margin pressure from incentives aimed at attracting buyers. The industry's lack of innovation has contributed to a 30% decline in labor productivity since 1970, even as productivity more than doubled across the broader economy. Berkshire also appears to be betting that housing demand will recover, allowing more efficient builders to gain market share in an undersupplied housing market.

Industry size & Structure

The average drywall and insulation contractor operates out of a single location and generates $3.1 million in annual revenue.

• The drywall and insulation contractor industry in the US consists of about 19,495 companies that employ 247,500 workers and generate $60 billion in annual revenue.
• The industry consists primarily of small companies - 62% of firms have less than five employees.
• Small firms may specialize in residential or commercial construction, while larger firms typically target both markets.
• Major US companies include KHS&S, Performance Contracting Group, Standard Drywall, Inc. and The Raymond Group.