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

                                  Apr 12, 2024 - Industry Growth Poised for Rebound
                                  • The flooring 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.
                                  • The housing construction industry continues to experience a significant labor shortage, but the lack of workers has been mitigated somewhat by an increase in immigration since 2022, according to a recent report by the National Association of Home Builders (NAHB). However, in the NAHB/Wells Fargo Housing Market Index Survey for March (February data), 44% of home builders reported a labor shortage among flooring installers. Immigrants account for about 46% of the flooring installer workforce in the US. The construction sector’s reliance on immigrant labor varies by state. At 40%, California and Texas have some of the highest percentages of immigrant labor forces, followed by Florida (38%), New York (37%), New Jersey (37%), and Maryland (34%).
                                  • 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.
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