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

                            Jun 13, 2022 - Mortgage Applications Drop
                            • Mortgage applications for the week ending June 3, 2022 fell 6.5%, marking their lowest level in 22 years, according to the Mortgage Bankers Association (MBA). Purchase and refinance applications were both down as rising interest rates and reduced affordability depressed demand for mortgages. “The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past months. These worsening affordability challenges have been particularly hard on prospective first-time buyers,” said MBA Associate Vice President of Economic and Industry Forecasting Joel Kan.
                            • Lumber traded at $597 per thousand board feet on June 7, down significantly from the record high of $1,686 per thousand board feet on May 7, 2021, but still 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 0.2% 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.”
                            • High home prices and rising interest rates are also 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.
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