Flooring Contractors NAICS 238330

Jun 14, 2026 - Fitch Downgrades Outlook for Builders, Building Products

• Fitch Ratings revised its 2026 outlooks for the US homebuilding and North America building products sectors to deteriorating from neutral. The agency cited affordability challenges, weak consumer sentiment, and mortgage rates expected to remain near 6.5%. For flooring contractors, slower home sales, reduced remodeling activity, and weaker demand for discretionary projects such as flooring replacements and broader home renovations could limit project opportunities and pressure revenue growth. Fitch expects new home sales to decline 2.5% and single-family housing starts to fall 4.5% this year, while homebuilders cut prices and offer incentives to attract buyers.
• The total value of US construction put in place rose 0.4% in April 2026 compared to the prior month, according to the US Census Bureau. Residential spending grew 0.8%, and nonresidential spending increased 0.1%. Overall, construction spending in April surpassed economists' expectations of just 0.2% growth. A 1.4% increase in single-family project spending led April's growth, even as the conflict with Iran stoked inflation and sent the 30-year fixed mortgage rate higher. Spending on private nonresidential buildings declined 0.2% in April. Private nonresidential structure spending has fallen for nine consecutive quarters, despite the data center boom. Bright spots in April nonresidential building construction included a 1.9% rise in public safety project spending and a 1% increase in offices (a category that includes data centers). Lodging, educational, and healthcare also saw slight upticks. However, weakness in the commercial and manufacturing construction segments continues to weigh on nonresidential building spending.

• Home remodeling spending growth is expected to slow significantly early in 2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in May by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 1.8% to $516 billion in the second quarter of 2026, compared to Q2 2025. In the third quarter of 2026, remodeling spending will trend slightly upward to $518 billion, up 2.4% from Q3 2025. Spending will then remain flat at $518 billion in Q4 2026, up 1.8% from Q4 2025. In the first quarter of 2027, year-over-year spending is forecast to rise just 0.5% to $523 billion. Remodeling permitting and building product sales have remained flat recently, but homeowners are expected to maintain spending near 2025 levels. Remodeling spending is likely to remain subdued, barring a turnaround in the construction sector.
• Some deep-pocketed investors are betting on the long-term viability of the US home-building market, despite ongoing industry challenges, according to The Wall Street Journal. Berkshire Hathaway's agreement to acquire builder Taylor Morrison in May followed several recent US home builder purchases by Japanese firms. Large investors see opportunities to improve efficiency through modular construction. About 15% of new homes in Japan use modular construction, compared with only 3% in the US, according to UBS. A UBS study suggests modular building can reduce waste by 20%, helping builders cope with margin pressure from incentives aimed at attracting buyers. The industry's lack of innovation has contributed to a 30% decline in labor productivity since 1970, even as productivity more than doubled across the broader economy. Berkshire also appears to be betting that housing demand will recover, allowing more efficient builders to gain market share in an undersupplied housing market.