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 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
Recent Developments
Mar 10, 2023 - Mortgage Applications Drop
- As the spring home-buying season nears, high interest rates are crimping demand for home sales, according to The Wall Street Journal. In early February, mortgage rates fell almost a full percentage point from November’s highs, but some economists now expect that stubborn inflation and strong consumer spending will prompt the Federal Reserve to continue its rate hike strategy to tamp down inflation. For the week ended February 24, US mortgage applications for home purchases fell to their lowest level in 28 years, according to the Mortgage Bankers Association (MBA). Spring is typically the busiest time of year for home sales as families prefer to move over the summer and be settled in their new homes before school starts.
- Multifamily developer confidence improved in the fourth quarter of 2022 but remained in negative territory, according to February’s Multifamily Market Survey (MMS) report by the National Association of Home Builders (NAHB). The Multifamily Production Index (MPI) rose two percentage points in Q4 to 34 compared to the third quarter of 2022. The Multifamily Occupancy Index increased by four points to 49 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. While multifamily housing demand is robust, supply is catching up with demand in some markets. The NAHB expects multifamily production will slow significantly over the next two years after rapid growth in 2022. Developers face several challenges, including high regulatory costs, difficulty securing new project financing, and high interest rates.
- The total value of nonresidential construction put in place declined 0.1% in January 2023 compared to the prior month, according to the US Census Bureau. While overall spending declined, manufacturing projects were a bright spot, and manufacturing construction spending in January was up 5.9% over December. Power projects saw 0.9% growth, office spending increased 0.7%, and healthcare was up 0.2%. Spending on commercial projects fell by 3.1%. Construction spending for manufacturing projects in January 2023 was up 53.6% year over year. Associated Builders and Contractors (ABC) chief economist Anirban Basu said, “With the CHIPS and Science Act directing $280 billion into semiconductor manufacturing and an ongoing desire to reshore manufacturing capacity, the segment should continue to thrive.”
- A robust labor market and wage growth combined with steady investments in equipment, IT, and factory construction could help the US economy avoid a recession in 2023, according to Associated General Contractors of America (AGC) chief economist Ken Simonson. Manufacturing and infrastructure investments stemming from the Infrastructure Investment and Jobs Act and the Chips and Science Act are expected to be key pockets of growth for the construction sector. In the manufacturing sector, projects are being driven by EV battery plant and carbon capture projects. However, Simonson noted that high materials, labor, and financing costs could cause a slowdown for other types of commercial construction categories, including warehouse, retail, office, lodging, and multifamily.
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