Drywall and Insulation Contractors
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 19,300 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.
Industry size & Structure
The average drywall and insulation contractor operates out of a single location and generates $2.3 million in annual revenue.
- The drywall and insulation contractor industry in the US consists of about 19,300 companies that employ 247,100 workers and generate $45 billion in annual revenue.
- The industry consists primarily of small companies - 61% 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.
Industry Forecast
Drywall and Insulation Contractors Industry Growth
Recent Developments
Aug 12, 2024 - Nonresidential Building Construction Spending to Soften in 2025
- Construction spending for nonresidential buildings is projected to rise 7% in 2024, then drop to 2% growth in 2025, according to the American Institute of Architects’ (AIA) mid-year Consensus Construction Forecast. Weaker property values will weigh on the nonresidential building market next year. Spending for commercial projects is forecast to be flat in 2024 and 2025, while manufacturing projects will see spending rise 14% this year then flatten in 2025. Spending for institutional building will increase by 10% in 2024 then drop to 4% growth in 2025. The AIA’s Chief Economist Kermit Baker said, “The disparity in sector performance highlights the uneven economic conditions and ongoing market uncertainties. Despite the challenges, specific sectors like manufacturing construction are showing strong ongoing activity from the surge in projects that started during the pandemic, while most institutional sectors are seeing reasonably healthy gains, fueled by the education market.”
- The drywall and insulation contracting industry is expected to see almost flat sales growth this year, but demand is projected to improve in the following four years. The industry’s year-over-year sales increased by 10.6% in 2022 before dropping to 3.2% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to fall to 1.1% in 2024, then rise to 6.9% in 2025. The industry will then see steady average annual growth of about 6.8% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Total nonresidential building construction spending is projected to rise 6% in 2024 over 2023, according to FMI’s third-quarter 2024 North American Engineering and Construction Outlook. With growth of 28%, public safety will lead 2024 nonresidential building construction, followed by manufacturing (21%), educational (7%), and religious (7%). Some other segments of the nonresidential building sector face headwinds. Commercial construction spending is expected to decline 7% in 2024 amid weaker demand for warehousing space, high interest rates, and tighter lending standards. Lodging construction spending is forecast to drop 6% as consumer budgets tighten and hotel occupancies wane, especially near the market's lower tier. Stubbornly high office vacancies will continue to weigh on new office construction, which is projected to see flat spending in 2024. Despite high interest rates, single-family construction spending is forecast to rise 7% in 2024 as homebuilders reduce home sizes to improve affordability. Spending for multifamily is expected to decline by 1% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will rise 4% in 2024 as homeowners primarily focus on maintenance and repairs amid high materials costs and interest rates.
- Multifamily developers’ confidence declined in the second quarter of 2024, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) fell twelve points in Q2 2024 to 44 compared to the second quarter of 2023. The Multifamily Occupancy Index decreased by eight points to 81 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include a tight lending environment, higher borrowing costs, and difficulties with getting projects approved. However, increasing signs of a weakening US economy may prompt the Federal Reserve to begin cutting interest rates before the end of the year.
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