Site Prep 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 38,400 site preparation contractors in the US prepare land for construction activity. Services include excavation work; wrecking and demolition; trenching; sewer and water main installation; construction machinery rental (with operator); and road construction. While private sector projects account for the majority of revenue, site prep contractors also provide services to federal, state, and local governments.
Dependence On General Contractors
Because site preparation is just part of the construction process, companies often depend on general contractors to secure client business.
Seasonal And Weather-Related Factors
Seasonality and weather conditions affect project timelines and site prep contractors’ ability to perform work.
Industry size & Structure
The average site preparation contractor operates out of a single location, employs 9-10 workers, and generates about $2-3 million annually.
- The site preparation services industry consists of about 38,400 companies that employ 396,000 workers and generate about $97 billion annually.
- The industry is fragmented; most site preparation contractors serve a limited geographical market.
- Some large general contractors, such as Granite Construction and Sterling Construction, offer site preparation services in addition to other construction services.
Industry Forecast
Site Prep Contractors Industry Growth
Recent Developments
Jan 13, 2025 - Residential Construction Loan Volumes Decline
- In the third quarter of 2024, the volume of outstanding residential acquisition, development, and construction (AD&C) loans made by FDIC-insured institutions declined for the third quarter in a row, according to the National Association of Home Builders (NAHB). The value of residential AD&C loans in Q3 2024 was $490.7 billion compared to $495.8 billion in Q2 2024. The volume of residential AD&C loans is expected to rise in 2025 as the Federal Reserve continues its monetary easing policies, but potential headwinds include the federal deficit and economic uncertainty.
- In the second week of January 2025, commodity prices for lumber – a key input for the construction sector – were about $557 per thousand board feet - essentially unchanged from a month earlier, according to Trading Economics. Lumber prices were also flat on a year-over-year basis. Over the last year, commodity prices for lumber have seen some volatility as they rose as high as $606 in March or fell as low as $438 in July. A sluggish housing market and global economic uncertainty have kept lumber prices in check. These factors are expected to maintain downward pressure on lumber pricing despite potential tariffs and trade strife.
- The Dodge Momentum Index (DMI) increased 10.2% in December 2024 to 212 (2000=100), up from the revised November reading of 192.3. The Momentum 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 improved by 14.2%, and the institutional portion increased by 2.5%. Dodge’s associate director of forecasting, Sarah Martin, said, “Commercial activity rebounded strongly in December, thanks to a re-acceleration in data center and warehouse planning activity. Overall, the strong performance of the Momentum Index this past year is expected to support nonresidential construction spending throughout 2025.”
- In December 2024, Greystar Real Estate Partners – the largest apartment owner in the country – opened a six-building, 312-unit complex assembled using modular construction methods, according to The Wall Street Journal. The development – called “Ltd. Findlay” – near Pittsburgh is Greystar’s first modular apartment project, as the company hopes the alternative method can speed construction in an industry often mired by delays. The project was built at Greystar’s factory in Knox, Pennsylvania, and the firm has six other modular projects in the works. Modular housing is built in factories and assembled on-site, which proponents suggest reduces construction time and labor and materials costs. While modular housing remains a small part of the overall market, it is gaining ground amid a shrinking construction labor force and rising costs.
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