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
Recent Developments
Nov 9, 2023 - Nonresidential Projects Drive Construction Spending Growth
- Nonresidential and residential construction spending have posted steady growth in 2023. However, while nonresidential spending was up year-over-year in mid-2023, residential spending decreased over the same period as high interest rates and home prices have cooled demand. Industry employment was flat year-over-year in Q3 2023, and industry wages rose sharply over the same period. Meanwhile, producer prices for some flooring inputs – including clay floor and wall tile – were up moderately in Q3 compared to the same time a year earlier. Wage growth and higher materials prices could pressure flooring contractor margins if those costs can’t be passed on.
- The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the third quarter of 2023 was 65, down three points from the second quarter of 2023, according to an October report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the second quarter, the Current Conditions Index portion of the RMI declined by five points from Q2 2023 to 72. The Future Indicators Index component of the RMI fell three points to 57 over the same period. The NAHB noted that although high borrowing costs and inflation continue to pose challenges, remodeling growth will continue in 2024 and 2025. While remodeling activity has slowed over the past year, as of June 2023, it accounted for 43% of total residential remodeling spending, up from 31% in early 2022.
- North American engineering and construction spending is forecast to rise by 5% in 2023 compared to the 12% growth seen in 2022, according to FMI’s fourth-quarter 2023 North American Engineering and Construction Outlook. Overall growth in 2023 will be supported by double-digit gains in key segments, including manufacturing (up 58%), multifamily (+18%), and lodging. Other segments expected to post strong growth include healthcare (+9%), public safety (+9%), amusement & recreation (+8%), educational (+8%), office (+8%), transportation (7%), and commercial (+6%). With a 13% decline in spending, single-family housing is the only segment expected to post negative growth in 2023.
- Single-family home sizes increased during the pandemic as families sought more space for activities like working and learning remotely. However, rising interest rates and higher housing costs have since reversed the trend, according to National Association of Home Builders analysis of US Census Bureau data. In the second quarter of 2023, the median size of a new, privately-owned, single-family home was 2,191 square feet. That’s down nearly 6.2% from a pandemic-era high of 2,335 square feet in the fourth quarter of 2021. Second-quarter 2023 median single-family square footage was the lowest since the end of 2010.
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