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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jun 12, 2024 - Industry Growth Poised for Rebound
                                • 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 by 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.
                                • Amid a shortage of existing homes on the market, 61% of home buyers prefer new homes, according to a recent survey by the National Association of Home Builders (NAHB). The survey’s results show the highest share of new-home preference since 2007 when 63% of home buyers preferred new construction. Homeowners who locked in a low interest rate before 2022, when the Federal Reserve began raising interest rates, are reluctant to sell and swap their low-interest loans for a higher rate. New single-family homes have filled the void in the market left by a lack of existing homes for sale. Residential construction is a key demand driver for plywood and engineered wood products.
                                • A lack of affordability in the US housing market is prompting a building boom of for-rent homes, according to The Wall Street Journal. Amid high interest rates and home prices, many affluent potential home buyers are priced out of the single-family and townhome markets. In 2023, US builders completed 93,000 for-rent homes - the most ever in a single year and up 39% over 2022, according to John Burns Research and Consulting. There are another 99,000 for-rent homes currently under construction, but the breakneck pace of development is expected to slow as lending standards tighten. However, some industry watchers believe any lull in built-for-rent home demand will be brief as economic conditions make renting a better financial option than buying. As of March 2024, the average monthly mortgage payment was 38% higher than the average monthly apartment rent, according to CBRE.
                                • The total value of nonresidential building construction starts increased 17% in April from March, according to Dodge Construction Network. The April gain was led by a doubling of manufacturing projects over March levels. April’s institutional starts rose 16% amid an increase in healthcare and transportation starts. Commercial construction starts dropped by 1% due to weakness in the parking and warehouse markets. Year-to-date, nonresidential building starts were up 5% compared to the first four months of 2023. Residential starts fell 1% in April compared to the previous month as a 13% rise in multifamily starts wasn’t enough to offset single family’s 7% decline. Dodge Construction Network chief economist Richard Branch said, “The rebound in starts in April was certainly good news for the sector. While the uncertain timing of Fed interest rate cuts is causing concern, developers and owners are feeling reasonably confident that end-market demand will sustain project starts in some sectors. While risk remains in the sector for interest rates, labor, and material prices the value of projects in planning has been reasonably stable indicating future confidence.”
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