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 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
Recent Developments
Nov 11, 2022 - Remodeling Activity Steady
- The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the third quarter of 2022 was 77, down 10 points from the third quarter of 2021, according to an October report by the National Association of Home Builders (NAHB). In the third quarter, 23% of remodelers said conditions were worse than they were three months earlier, 10% said they were better, and 67% said they were about the same. While the RMI reading for Q3 2022 dropped from a year earlier, overall conditions remained positive amid rising home equity, durable work-from-home trends, and aging housing stock. The NAHB expects a slight uptick in remodeling activity in 2023 as new home construction continues to slow.
- New single-family home sales decreased 10.9% month over month and declined 17.6% year over year in September 2022, according to the US Department of Commerce. On a year-to-date basis, new home sales were down 14.3% in the first nine months of 2022 compared to the same period in 2021. According to Freddie Mac, on November 3, 2022, the US weekly average rate on a 30-year fixed mortgage was 6.95%. A year ago, the rate was just over 3%. Industry watchers expect new home sales to remain weak as the Fed uses interest rate hikes to bring down inflation.
- US housing affordability fell to its lowest point since the Great Recession in the third quarter of 2022 amid rising mortgage rates, inflation, low housing inventory, and high home prices, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI). Only 42.2% of new and existing homes sold between July 2022 and the end of September were affordable for households with a median income of $90,000. The third quarter of 2022 marked the second consecutive quarterly record low for housing affordability in more than 10 years. According to the HOI, the median home price in Q3 2022 was $380,000, down from the all-time high of $390,000 set in Q2 2022.
- The Dodge Momentum Index (DMI) increased 9.6% in October 2022 to 199.7 (2000=100), up from the revised September reading of 182.2. The DMI Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component increased by 13%, and institutional rose by 2.9%. An increase in office and lodging projects boosted the commercial planning pipeline. The institutional sector was mixed amid a growing pipeline of recreation and education projects, but the number of healthcare and public planning projects declined. Developers and project owners continue to see healthy demand, despite recession concerns, although continued inflation, high interest rates and materials costs, and labor shortages have the potential to blunt the flow of new projects.
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