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 37,300 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 37,300 companies that employ 379,600 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
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Mar 15, 2024 - Cities Change Zoning Rules to Make Room for More Housing
                            • To cope with housing shortages and a lack of affordability, many municipalities are changing their zoning rules to encourage more housing development, according to NPR. Cities find their zoning rules rigid and outdated, making building new housing stock difficult and expensive. Some cities are changing their rules to allow more multifamily developments, including townhomes and apartments, and permitting accessory dwelling units (ADUs), which add a secondary structure on one lot. Some cities have also reduced lot-size requirements, encouraging greater density and the number of available housing units.
                            • The Dodge Momentum Index (DMI) decreased by 1.4% in February 2024 to 180.5 (2000=100), down from the revised January reading of 180.5. 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 dropped by 2.3%, and institutional rose by 0.1%. Dodge’s associate director of forecasting, Sarah Martin, said, “Weaker office and healthcare planning constrained nonresidential planning in February. However, the Index remains 25% higher than where it was just two years ago. Most other categories showed growth over the month and Dodge remains optimistic that nonresidential planning will stay elevated throughout 2024 alongside rising confidence in 2025 market conditions.”
                            • Home sizes increased during the pandemic as families sought more space, and interest rates were near record lows. As interest rates have risen and homes have become less affordable, the trend is reversing, and homes are getting smaller, according to National Association of Home Builders (NAHB) analysis of Census Bureau data. In the fourth quarter of 2023, the median single-family home square footage was 2,156, which is the lowest since 2010. The NAHB suggests that smaller home sizes will likely persist amid continued affordability issues.
                            • North American construction and engineering spending in 2024 is expected to grow by about 2%, down from 10% growth in 2023, according to FMI’s first-quarter 2024 North American Engineering and Construction Outlook. Slower spending for residential and some other private sector construction segments will slow overall construction and engineering spending. Construction subsectors that are expected to see double-digit growth in 2024 include manufacturing (up 18% in 2024 over 2023), conservation and development (+13%), public safety (+13%), lodging (+12%), transportation (+12%), power (+11%), sewage and wastewater (+11%), and educational (+10%). Other pockets of steady growth include highway and street, water supply, and healthcare. High interest rates continue to put downward pressure on residential and commercial projects. Single-family construction spending is forecast to drop 5% in 2024 after falling 14% in 2023. Spending for multifamily is expected to decline 15% in 2024 after projects in development peaked at 1 million units in mid-2023. The only nonresidential building construction segments projected to post negative growth in 2024 are commercial (down 4% compared to 2023) and office (-2%).
                            Get A Demo

                            Vertical IQ’s Industry Intelligence Platform

                            See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                            Build valuable, lasting relationships by having smarter conversations -
                            check out Vertical IQ today.

                            Request A Demo