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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 18,600 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 18,600 companies that employ 249,000 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
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 11, 2022 - Architectural Billings Rise
                                • Demand for building design services is strong, according to an April report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI), an indicator of future building construction demand, was 58 in March, up from 51.3 in February. Any reading above 50 indicates growth in architectural billings. The rise in billings is likely due to an effort to lock in interest rates ahead of continued rate hikes in the coming months. The ABI reading for commercial/industrial projects was 55.3 in March. On a regional basis, the South registered the strongest March ABI score with 57.2, followed by the Midwest (56.2), the West (54), and the Northeast (46.3).
                                • Russia’s invasion of Ukraine and resulting sanctions by the US and its allies are likely to worsen the global supply chain disruption that began early in the pandemic. "Supply disruptions from Russia and Ukraine of metals and other minerals throw a wrench in the supply chain recovery," according to a recent report by Moody's Investors Service.
                                • Total construction spending increased 0.1% in value month over month on an adjusted basis and 11.8% in value year over year on an unadjusted basis in March 2022, according to the US Census Bureau. Residential construction spending increased 1% month over month and 17.8% year over year in March. Nonresidential construction spending declined 0.8% month over month and increased 5.8% year over year in March.
                                • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 77 in April 2022 from 79 in March, marking the fourth consecutive monthly decline. Higher materials costs and rapidly rising interest rates are making housing less affordable, which is weighing on builder confidence. Builders report that sales traffic and current sales conditions are at their lowest levels since summer 2021. Higher mortgage rates and supply chain disruptions have unsettled the US housing market, especially for potential first-time homebuyers.
                                • The Dodge Momentum Index increased 6% in April 2022 to 164.8 (2000=100), up from the revised March reading of 155. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. The commercial planning component increased by 9%, and institutional planning rose by 2%. The commercial planning pipeline was robust due to data center, warehouse, and hotel projects. While the backlog of nonresidential building projects is strong and should remain solid in the coming months, rising interest rates and higher materials costs could moderate construction activity through the end of 2022.
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