Flooring 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 17,400 flooring contractors in the US install resilient floor tile, carpeting, linoleum, and hardwood flooring. Single-family homes and office buildings account for the majority of sales. Other sources of revenue include apartment buildings; health care and institutional buildings; retail establishments; and educational buildings.
Dependence on General Contractors
Flooring contractors often work with general contractors (GC), which act as a gateway to construction jobs, especially large projects.
Vulnerability to Trends in the Construction Market
The flooring industry and demand for installation services are vulnerable to trends in the construction market, which is cyclical and influenced by economic factors.
Industry size & Structure
The average flooring contractor operates out of a single location, employs about 5 workers, and generates $1 million annually.
- The flooring contracting industry consists of about 17,400 establishments that employ about 80,400 workers and generate $18 billion annually.
- Most firms are small, independent businesses that served a limited geographical area. The largest firms, such as Redi Carpet, Bonitz Flooring Group, and Spectra Contract Flooring, operate regionally.
- Large flooring retailers include LL Flooring, Empire Today, and Floor & Décor. Retailers typically refer customers to third-party flooring installers.
Industry Forecast
Flooring Contractors Industry Growth
Recent Developments
Oct 14, 2024 - New Home Sales Drop
- New single-family home sales fell 4.7% month-over-month but were up 9.8% year-over-year in August 2024, according to the US Department of Commerce. Some potential home buyers stayed on the sidelines ahead of an anticipated interest rate cut, according to the National Association of Home Builders (NAHB). In mid-September 2024, the Federal Reserve announced a half-percentage point rate cut. The NAHB suggests home builder sentiment is improving amid expectations that the Fed’s credit-easing cycle will continue. However, falling interest rates may increase competition between home builders and existing homeowners who’d previously felt locked in by their low interest rates.
- North American construction and engineering spending in 2024 is expected to grow by about 5%, according to FMI’s fourth-quarter 2024 North American Engineering and Construction Outlook. With growth of 29%, public safety will lead 2024 nonresidential building construction, followed by manufacturing (21%), amusement and recreation (10%), transportation (5%), educational (4%), and religious (2%). Commercial construction spending is expected to decline 8% in 2024 amid weaker demand for warehousing space. Lodging construction spending is forecast to drop 6%, and stubbornly high office vacancies will continue to weigh on new office construction, which is projected to see spending rise by 1% in 2024. Despite favorable demographic trends, project delays for some private hospital developments will cap healthcare construction spending growth at 1% in 2024. Amid moderating interest rates, single-family construction spending is forecast to rise 5% in 2024 as new home affordability remains competitive with existing home prices. Multifamily spending is expected to decline by 4% in 2024 amid a recent wave of fresh inventory. The rise in available apartment units has contributed to flat or falling rents in some metros, prompting developers to pause new projects.
- The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the third quarter of 2024 was 63, down two points from the second quarter, according to an October 2024 report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the second quarter, the Current Conditions Index portion of the RMI declined one point to 72. The Future Indicators Index component of the RMI fell three points to 55. While the RMI remained solidly in positive territory in Q2 2024, the NAHB noted that high prices for labor and high interest rates continue to pose challenges for some remodelers. The NAHB expects remodeling spending to post solid 2% growth over the next two years.
- The total value of US construction put in place fell 0.1% in August 2024 compared to the prior month, according to the US Census Bureau. Residential spending declined 0.3% and nonresidential spending increased 0.1%. In the nonresidential buildings segment, growth was led by communication, which grew 1.3%. Amusement and recreation spending increased 0.9%, and lodging spending rose 0.8%. Spending on public safety projects grew by 0.6%, and healthcare spending rose by 0.1%. Construction spending for office, manufacturing, and transportation each rose 0.1%. Commercial spending fell 0.5% in August, while educational and office spending fell 0.2% and 0.1%, respectively.
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