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

                                  Feb 13, 2024 - Ceramic Tile Costs, Wages Rise
                                  • Producer prices for some flooring inputs – including clay floor and wall tile – were up moderately in Q4 compared to the same time a year earlier. Wages in the floor contracting industry were also up modestly in the fourth quarter. Wage growth and higher materials prices could pressure flooring contractor margins if those costs can’t be passed on. Industry employment was down moderately in Q4 2023.
                                  • Home remodeling spending is expected to weaken in 2024 but may hit bottom near the end of the year, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to decrease by 1.2% to $464 billion in the first quarter of 2024 compared to Q1 2023. In the second quarter of 2024, remodeling spending will drop to $454 billion, down 6.3% from Q2 2023. Spending will then decline to $452 billion in Q3 2024, down 7.8% from Q3 2023. However, in the fourth quarter of 2024, year-over-year spending is forecast to drop 6.5% to $450 billion. The Joint Center expects that by the end of the year, improvements in homebuilding activity and lower interest rates may help slow the steady decline in remodeling spending.
                                  • Total nonresidential building construction spending is projected to rise 8% in 2024 over 2023, according to FMI’s first-quarter 2024 North American Engineering and Construction Outlook. At growth of 18%, manufacturing will lead 2024 nonresidential building construction, followed by lodging (+12%), educational (+10%), and healthcare (+8%). 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 reduce office project spending by 2% in 2024. Commercial project spending is forecast to decline by 4% in 2024. High interest rates will also challenge the housing market. Single-family construction spending is forecast to drop 5% in 2024 after falling 14% in 2023. Spending for multifamily is expected to decline 15% in 2024 after projects in development peaked at 1 million units in mid-2023. Home improvement project spending will drop 4% in 2024 from 3% growth in 2023.
                                  • Some of the top challenges homebuilders faced in 2023 are expected to ease in 2024, while others may get worse, according to a recent survey for the NAHB/Wells Fargo Housing Market Index (HMI). At 90%, high interest rates was the most-cited challenge builders said they faced in 2023, and 77% expect them to remain an issue in 2024. About 83% of builders ranked inflation as their second-biggest headache in 2023, but only 52% think it will be a problem in 2024. In 2023, 73% of builders said the cost and availability of labor was a significant issue, and 71% believe this problem will persist in 2024. In 2023, 71% of builders said potential buyers believed interest rates and home prices will fall if they postpone buying, but for 2024, 77% of builders think buyers believe they can save by waiting. The cost and availability of developed lots was a problem for 57% of builders in 2023, but 64% of builders think lot shortages will be a major challenge in 2024.
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