Architectural & Structural Metals Mfrs

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 13,370 metal manufacturers in the US produce structural, ornamental, and architectural metal products, primarily for use in the construction industry. Major product categories include sheet metal work; fabricated structural metal products; ornamental and architectural products; plate work; windows and doors; and prefabricated building and component products. Sheet metal work includes air conditioning ducts and stove pipe; electronic enclosures; roofing and roof drainage equipment; flooring and siding; and culverts, flumes, and irrigation pipe. Fabricated structural metal products include bar joists, concrete reinforcements, and structural metal for bridges.

Seasonal Sales

Sales are seasonal and driven by construction activity, which typically peaks during warmer weather.

Capital-Intensive Operations

Architectural and structural metals manufacturing is capital-intensive, and most companies have significant investments in plants, equipment, and machinery.

Industry size & Structure

The average architectural and structural metals manufacturer operates out of a single location, employs about 30-31 workers, and generates $8.5 million annually.

    • The architectural and structural metals manufacturing industry consists of about 13,370 companies that employ 400,000 workers and generate about $113.6 billion annually.
    • The industry is highly fragmented; the top 50 firms account for nearly 28% of industry sales.
    • Some large companies are vertically integrated and own and operate raw steel manufacturing facilities, such as mini-mills.
    • Large companies include Valmont Industries, Cornerstone Building Brands, OmniMax International (formerly Euramax International), Quanex Building Products, and Gilbraltar Industries.
    • Commercial construction accounts for the majority of industry sales.
    • Structural steel is the most commonly used framing material in the US, and accounts for over half of framing used in non-residential and multi-story (more than four stories) residential construction, according to the American Institute of Steel Construction (AISC).
                              Industry Forecast
                              Architectural & Structural Metals Mfrs Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Feb 18, 2024 - Sales Grow, Materials Costs Rise
                              • An in-depth look at the financial performance of 28 US-based metal fabricators, manufacturers, and processors shows a resilient industry benefitting from reshoring and infrastructure spending while dealing with rising costs, the Metal Fabricator reports. In the annual “2023 Financial Ratios and Operational Benchmarking Survey" from the Fabricators and Manufacturers Association (FMA) released in December, those surveyed reported average growth of 17.3% in fiscal 2022 compared to outsized average growth of 34.9% in 2021. The FMA report also shows that direct material costs reached an average of 43% of sales in 2022, the highest average in the survey’s history. Offsetting the rise in materials costs was a decline in labor expenses, with indirect labor falling to just 6.5% of sales, down from 8.3% in 2021, and direct labor dropping to 13.9% of sales from 14.4% the prior year.
                              • Metal fabricators are getting more out of their employees, according to the FMA’s 2023 Benchmarking Survey. The sales-per-employee metric at the 28 US-based metal fabricators, manufacturers, and processors surveyed jumped from $242,100 in 2021 to $273,206 in 2022 as productivity increased. Meanwhile, the average sales-per-square-foot metric surged from $38,152 to $104,602 over the same period. The FMA report suggests these improved financial ratios reflect a dramatic uptick in equipment spending, especially on flexible automation, noting that some of the industry’s largest machine suppliers have reported record sales in recent years. While within historical averages, average inventory turns have been on the decline for three years, from 18.5 turns reported for fiscal 2019 to just 10.3 turns reported in the latest survey. However, the rise in inventory may reflect strategic decisions to hold more buffer stock in the aftermath of pandemic-related supply chain shortages.
                              • Architectural billings – a key leading indicator of construction activity – predict a solid year for the construction market in 2024, albeit at a slower rate of growth than last year. According to the American Institute of Architects (AIA), overall gains in construction spending are projected at just under 6%, with almost 3% for the commercial sector, 15% for industrial facilities, and 4% for institutional buildings. Commercial construction will continue to benefit from the billions of dollars in infrastructure investment from the Inflation Reduction Act and the CHIPS and Science Act that are still working their way into the economy. While final numbers for 2023 aren’t in yet, total construction spending is forecast at $1,960 billion, an increase of 6.0% over 2022 with nonresidential spending leading that growth, Contractor Magazine reports. Architectural and structural metals sales are driven by construction activity.
                              • Decades of deindustrialization, a dearth of young entrants, and a looming wave of retirements, have resulted in a severe shortage of welders, according to the American Welding Society (AWS). The welding industry will face a shortage of about 400,000 welders by 2024, according to the AWS. The average age of a welder is 55 – compared to 42 for the average US worker – and the coming wave of retirements will leave the country with a great deficit of skilled welders in the workforce. Moreover, welding has not been a first choice for career starters for a long time, contributing to the growing shortage. That’s despite higher than average starting salaries – $ 40,000, compared to a national average wage of just $ 31,000. Those with more education, including a university degree, can expect to make $ 55,000 per year, according to the AWS.
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