Flooring Contractors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 16,400 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 4-5 workers, and generates $1 million annually.

    • The flooring contracting industry consists of about 16,400 establishments that employ about 78,400 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

                                  Coronavirus Update

                                  Nov 3, 2021 - Updated Flooring Is A Common School Renovation Project
                                  • The CARES Act provided funding for the first round of Elementary and Secondary School Emergency Relief (ESSER), and flooring contractors are benefiting as construction, repair, and maintenance projects start. Typical projects include replacement of doors and windows, replacement of carpet with vinyl flooring, and replacements or upgrades of HVAC systems or HV air filtration systems. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 generated more funding through ESSER-II funds, and the American Rescue Plan opened more opportunities for ESSER-III funds for schools.
                                  • More than a quarter of the respondents to Home Advisor's 2021 State of Home Spending survey said that their home was renovated with a new floor in 2020.
                                  • An expected pandemic-driven increase in conversions of office buildings to residential housing that would benefit flooring contractors hasn't happened. Industry experts say that developers, property owners, and city officials don't think conversions make financial sense in the long run. "There's definitely an incentive for cities to continue to promote vibrant central business districts that are centered around employment," said Manan Shah, an architect in Oakland, CA, with Gensler, a firm that has worked on and studied such conversions for years. "We would need to see a long-term trend and vacancy was high for a number of years for somebody to take the time to go through the conversion process." High office vacancy rates are plaguing cities nationwide, but it's still far less expensive to build housing from scratch than to convert old offices.
                                  • The number of building permits issued for privately-owned housing units decreased 7.7% month over month but was unchanged year over year in September. Housing starts decreased 1.6% month over month but increased 7.4% year over year in September. Housing completions decreased 4.6% month over month and 13% year over year in September.
                                  • Growth in improvement and repair expenditures to owner-occupied homes is expected to remain solid throughout the year and into 2022, according to the Leading Indicator of Remodeling Activity (LIRA) from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects a healthy pace of mid-single digit gains in annual home renovation and repair spending this year, with 4.8% growth by the first quarter of next year.
                                  • Industrial facility construction completions will increase 29% year over year in 2021, according to commercial real estate services and investment firm CBRE Group. Big boxes in the 500,000-square-foot range will account for the majority of new product. Demand growth that began in 2020 will continue in intermodal hubs like the Inland Empire, Dallas, Houston, Chicago, and Atlanta markets. Demand for local infill space will also continue, spurred by the likes of Amazon, Walmart, Target, Best Buy and Costco.
                                  • Total construction spending decreased 0.5% in value month over month on an adjusted basis but increased 7.9% in value year over year on an unadjusted basis in September, according to the US Census Bureau. Residential construction spending decreased 0.4% month over month but increased 19.2% year over year in September. Nonresidential construction spending decreased 0.6% month over month and 1.2% year over year in September.
                                  • Employment in the specialty trade contracting industry increased 2.4% year over year in September but was down 1.2% compared to September 2019.
                                  • The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, decreased to 116.7 in September from 119.5 in August, according to the National Association of Realtors. An index of 100 is equal to the level of contract activity in 2001. “Contract transactions slowed a bit in September and are showing signs of a calmer home price trend, as the market is running comfortably ahead of pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “It’s worth noting that there will be less inventory until the end of the year compared to the summer months, which happens nearly every year. Some potential buyers have momentarily paused their home search with intentions to resume in 2022.”
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