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 17,070 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 17,070 establishments that employ about 84,800 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  May 12, 2023 - Buyers Look to New Homes Amid Tight Existing Home Market
                                  • A recent drop in mortgage interest rates and a shortage of existing homes for sale has boosted demand for newly built homes, according to The Wall Street Journal. In late 2022, many potential home buyers paused their plans when average mortgage rates topped 7%. As of May 11, the weekly average 30-year mortgage rate was 6.35%, according to Freddie Mac. The number of active listings for existing homes in March was about half of what they were four years earlier, according to Realtor.com. Sales of new homes accounted for about one-third of single-family home sales in March, according to Commerce Department and National Association of Realtors data. Historically, newly-built homes hold about 10% to 20% of the single-family market.
                                  • Home remodeling spending is expected to continue growing in 2023 but will slow by 2024, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 9.7% to $487 billion in the second quarter of 2023 compared to Q2 2022. In the third quarter of 2023, remodeling spending will reach $492 billion, up 5.8% over Q3 2022. Spending will then decline to $484 billion in Q4 2023, 2.6% over Q4 2022. In the first quarter of 2024, year-over-year spending is forecast to drop 2.8% to $458 billion. The Joint Center expects high interest rates, slower sales of existing homes, and recession worries to reduce remodeling activity as homeowners delay or scale back projects.
                                  • North American construction spending is set to decline by 1% in 2023 compared to 11% growth in 2022, according to FMI’s second-quarter 2023 North American Engineering and Construction Outlook. Higher interest rates and a potential recession are forecast to reduce single-family residential construction spending to 0% growth or lower in 2023. The single-family market is projected to remain weak through 2026. However, several nonresidential building segments are projected to see spending growth of 10% or more in 2023, including lodging, commercial, and manufacturing. Other segments will experience spending growth of 5% or more, including multifamily, office, healthcare, and amusement and recreation. Spending growth will be between flat and 4% for education, religious, and public safety.
                                  • New single-family home sales increased 9.6% month over month but declined 3.4% year over year in March 2023, according to the US Department of Commerce. Lower mortgage rates and tight housing inventories helped drive March new home sales even as builders continue to struggle with high costs for materials and supply chain issues, according to the National Association of Home Builders (NAHB). The median new home sales price in March was $449,800, up 3.8% from February and 3.2% compared to March 2022.
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