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 18,900 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 18,900 companies that employ 242,600 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
Apr 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.
- Total nonresidential building construction spending is projected to rise 9% in 2024 over 2023, according to FMI’s second-quarter 2024 North American Engineering and Construction Outlook. With growth of 19%, manufacturing will lead 2024 nonresidential building construction, followed by lodging (14%), public safety (12%), and transportation (10%). Some other segments of the nonresidential building sector face headwinds, including high interest rates, inflation, and tighter lending standards. These pressures and high vacancy rates will limit office project spending to 2% growth in 2024. Led by a weakening warehouse segment, commercial project spending is forecast to decline by 2% in 2024. High interest rates will also challenge the housing market. Single-family construction spending is forecast to be flat in 2024 after falling 14% in 2023. Spending for multifamily is expected to decline 8% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will rise 2% in 2024 after falling 5% in 2023.
- Higher consumer prices, a leading indicator of inflation, came in hotter than expected, which could push mortgage rates higher, according to the National Association of Realtors (NAR). Bureau of Labor Statistics data show that the consumer price index (CPI) rose to 3.5% in March. The Federal Reserve has indicated that it won’t reduce the short-term benchmark interest rate until the CPI drops to the Fed’s target of 2%. NAR Chief Economist Lawrence Yan said, “March inflation figures were very bad, which also means bad news for interest rates. Mortgage rates, unfortunately, will move a notch higher and are likely to cross above 7% in the upcoming weeks.” High mortgage rates have put downward pressure on housing demand, which could reduce single-family construction activity.
- According to the recently released 2024 version of the What Home Buyers Really Want study by the National Association of Home Builders (NAHB), US home buyers are looking for smaller homes. The study found that in 2023, the typical buyer wanted a home with 2,067 square feet of finished area, down from 2,260 in 2003. The NAHB study is supported by data from the US Census Bureau on housing starts. In 2023, the average size of new homes started in the US fell to 2,411 square feet, the lowest in 13 years. The size of homes started has been trending lower since peaking at 2,689 square feet in 2015.
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