Finish Carpentry 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 30,200 finish carpentry contractors in the US build and install specialty carpentry products used to finish buildings. Services include the installation of cabinets, countertops, doors, windows, door and window frames, garage doors, millwork, molding, trim, paneling, decks, shelving, and stairs. Projects include work on single-family homes, commercial buildings (stores, restaurants), office buildings, apartment buildings, health care and institutional buildings, and educational buildings. Most firms are small, independent operators that serve a local market.

Seasonality Of Demand

The volume of work for finish carpentry contractors varies throughout the year and is influenced by seasonal factors.

Dependence On General Contractors

Finish carpentry contractors are often part of a team of specialty contractors hired by a general contractor.

Industry size & Structure

The average finish carpentry contractor operates out of a single location, employs 4-5 workers, and generates about $912,000 annually.

    • The finish carpentry industry consists of 30,200 establishments that employ 140,100 workers and generate $27 billion annually.
    • The industry is highly fragmented. Most firms are small, independent operators that serve a local market.
    • About 26% of carpenters are self-employed, according the Bureau of Labor Statistics. Most self-employed carpenters work in residential construction.
                          Industry Forecast
                          Finish Carpentry Contractors Industry Growth
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          Mar 15, 2023 - Banking Jitters Push Mortgage Rates Lower
                          • Mortgage rates dipped slightly after the collapse of Silicon Valley Bank, but housing industry watchers are uncertain if lower rates will persist long enough to provide much relief from the affordability issues that have slowed the US housing market, according to Yahoo Finance. Some financial market watchers note that the banking sector's jitters could slow the Federal Reserve’s strategy of taming inflation with rate hikes. Redfin chief economist Daryl Fairweather told Yahoo Finance, “There's still a lot of uncertainty but in the near term, I do expect mortgage rates to drop. And I expect buyers to take advantage of those mortgage rates because we've seen buyers be incredibly sensitive to those interest rates.” However, some industry insiders suggest that to lure more buyers into the market, rates would need to drop and stay low for a sustained period.
                          • Residential remodelers’ average gross and net profit margins declined in 2021, according to the 2023 edition of the Remodelers’ Cost of Doing Business Study released in March by the National Association of Home Builders (NAHB). Remodelers’ average gross profit margin grew steadily from 26.8% in 2011 to 30.1% in 2018, but in 2021 fell to 24.9%. The drop in gross margins was primarily due to higher trade contractor and homebuilding costs. However, remodelers’ average net margins were more resilient, dropping to 4.7% in 2021 from 5.2% in 2018. Steadily falling operating expenses between 2018 and 2021 held back a steeper decline in average net margins. The study also showed that residential remodeler participation in the single-family homebuilding market is rising. In 2018, 6% of total remodeler revenue came from single-family construction; in 2021, the share rose to 11%.
                          • Finish carpentry contractors may enjoy better margins as lumber prices continue to drop compared to the record highs seen during the pandemic. In mid-March, lumber futures were trading around $413 per thousand board feet, up from about $402 a month earlier. However, lumber futures in mid-March of 2022 traded at $1,195 per thousand board feet. High interest rates have pushed up mortgage costs which have had a cooling effect on the US homebuilding industry and have reduced lumber demand and pricing. Some industry watchers note that when lumber prices fall, producers typically curtail production to push prices back up, according to
                          • New single-family home sales increased 7.2% month over month but declined 19.4% year over year in January 2022, according to the US Department of Commerce. Lower mortgage rates and home prices, combined with builder incentives, helped push new home sales higher in January, according to the National Association of Home Builders. The median new home sales price in January was $427,500, down 8.2% from a month earlier.
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