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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Jun 13, 2022 - Survey: Not a Good Time to Buy a House
                                  • High home prices and rising interest rates are reducing the confidence of potential home buyers. Only 30% of US adults think now is a good time to buy a house, according to Gallup’s latest Economy and Personal Finance poll released in May. The results were down 20 percentage points from when the same question was asked in 2021 and represented the lowest confidence level since the question was first asked in 1978. It was also the first time the percentage of people thinking it was a good time to buy a house fell below 50%, including during the housing crisis of 2008.
                                  • Rapidly rising home prices have increased homeowner equity which is expected to boost residential remodeling spending through 2022, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April 2022 by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 15.8% year over year to $406 billion in the second quarter of 2022. On a year-over-year basis, Q3 remodeling spending levels are forecast to rise 19.7%, then drop slightly to 17% growth in Q4. Year-over-year growth will slip further in Q1 2023 to 15.1%. Home improvement spending is projected to taper off beginning in the third quarter of 2022 amid rising financing, materials, and labor costs and concerns about a possible economic slowdown.
                                  • The number of building permits issued for privately-owned housing units decreased 3.2% month over month but rose 3.1% year over year in April 2022. Housing starts fell 0.2% month over month but increased 14.6% year over year in April. Housing completions decreased 5.1% month over month and fell 8.6% year over year in April.
                                  • Total construction spending increased 0.2% in value month over month on an adjusted basis and 12% in value year over year on an unadjusted basis in April 2022, according to the US Census Bureau. Residential construction spending increased 0.9% month over month and 18.8% year over year in April. Nonresidential construction spending declined 0.4% month over month and increased 5.8% year over year in April.
                                  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 69 in May 2022 from 77 in April, marking the fifth consecutive monthly decline. Higher materials costs and rapidly rising interest rates are making housing less affordable, weighing on builder confidence. NAHB Chief Economist Robert Dietz said, “Building material costs are up 19% from a year ago, in less than three months, mortgage rates have surged to a 12-year high, and based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family.”
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