Framing 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 11,500 framing contractors in the US erect the structural framing and sheathing in buildings, using primarily wood. Single family homes account for 49% of industry sales. Other types of projects include apartment buildings and commercial buildings (stores, restaurants, gas stations, parking garages).

Vulnerability to Trends in the Housing Market

The framing contracting industry is primarily dependent on upstream demand from the residential construction industry, which is cyclical and sensitive to economic conditions.

Dependence on Skilled Labor

Framing contractors rely on a skilled labor force willing to perform physically demanding work in all types of weather conditions.

Industry size & Structure

The average framing contractor operates out of a single location, employs 7 workers, and generates about $1.4 million annually.

    • The framing contracting industry consists of about 11,500 establishments that employ about 83,800 workers and generate about $16.6 billion annually.
    • The industry is fragmented. Most firms are small, independent operators; over 70% of firms generate less than $500,000 annually.
    • The framing stage accounted for 17-19% of construction costs, the second highest cost category, after interior finishes, according to the National Association of Home Builders (NAHB). Of the detailed items in new home construction, framing and trusses accounted for the largest share of costs (15-17%).
                            Industry Forecast
                            Framing Contractors Industry Growth
                            Source: Vertical IQ and Inforum

                            Coronavirus Update

                            May 11, 2022 - Lumber Prices Drop
                            • Lumber traded at $918 per thousand board feet on May 2, 2022, down significantly from the record high of $1,686 per thousand board feet on May 7, 2021, but well above pre-pandemic levels. Lumber prices may continue to moderate as the housing market cools due to high home prices and rising interest rates.
                            • Total construction spending increased 0.1% in value month over month on an adjusted basis and 11.8% in value year over year on an unadjusted basis in March 2022, according to the US Census Bureau. Residential construction spending increased 1% month over month and 17.8% year over year in March. Nonresidential construction spending declined 0.8% month over month and increased 5.8% year over year in March.
                            • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 77 in April 2022 from 79 in March, marking the fourth consecutive monthly decline. Higher materials costs and rapidly rising interest rates are making housing less affordable, which is weighing on builder confidence. Builders report that sales traffic and current sales conditions are at their lowest levels since summer 2021. Higher mortgage rates and supply chain disruptions have unsettled the US housing market, especially for potential first-time homebuyers.
                            • Framing contractors may benefit from the increasing demand for what is often referred to as "other healthcare” facilities. The ongoing shift to diagnosis and treatment outside of hospital settings is likely to continue even if there are not more surges in COVID-related hospitalizations, according to The Associated General Contractors of America. The need for long-term care in facilities other than nursing homes will grow as well. The steady increase in the number of elderly persons will further increase the demand for new types of medical institutions.
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