Structural Steel and Precast Concrete 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 3,600 structural steel and precast concrete contractors in the US erect, assemble, and install structural elements of buildings. Large firms may offer design/build services or fabrication services. Firms may also offer repair or restoration services.

Dependence on Nonresidential Construction Activity

Demand for structural steel, reinforcing steel, and precast concrete is primarily dependent on nonresidential construction activity, which can be cyclical and influenced by economic conditions.

Hazardous Work

Steel erection is one of the top 10 most hazardous occupations in the US, as the incidence of injury and illness for structural steel and precast concrete contractors was more than 20% higher than the national average in 2019.

Industry size & Structure

The typical structural steel and precast concrete contractor operates out of a single location, employs about 20+ workers, and generates between $4 million and $5 million annually.

    • The structural steel and precast concrete contracting industry consists of about 3,600 companies that employ about 86,100 workers and generate between $15 billion and $16 billion annually.
    • The industry is fragmented; no true national firm dominates, however the largest companies, such as Span Construction & Engineering and Crossland, operate it numerous states. Integrated companies design, fabricate, and install structural steel products.
                              Industry Forecast
                              Structural Steel and Precast Concrete Contractors Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              May 12, 2023 - Construction Outlook Mixed
                              • North American construction spending is set to decline by 1% in 2023 compared to 11% growth in 2022, according to FMI’s second-quarter 2023 North American Engineering and Construction Outlook. However, spending will be mixed among several construction segments. Higher interest rates and a potential recession are forecast to reduce single-family residential construction spending to 0% growth or lower in 2023. The single-family market is projected to remain weak through 2026. However, several nonresidential segments are projected to see spending growth of 10% or more in 2023, including lodging, commercial, and manufacturing. Other segments will experience spending growth of 5% or more, including multifamily, office, healthcare, amusement and recreation, highway and street, sewage and waste disposal, and water supply. Spending growth will be between flat and 4% for education, religious, communication, power, and public safety.
                              • Construction firms’ first-quarter profits were the lowest since the middle of the pandemic, according to a recent survey by the Royal Institution of Chartered Surveyors (RICS). Challenged by high materials costs and labor issues, construction companies’ profits in the first quarter were down 27% compared to Q4 2022, when profits increased by 4%. However, looking ahead, respondents to the RICS survey were upbeat about their profit margins. The survey showed there was strong momentum for infrastructure spending, especially for projects related to energy and transport.
                              • Top tech firms Amazon, Google, and Microsoft are expected to ramp up their spending on data center development in the race to be the leader in artificial intelligence (AI), according to Bisnow. After ChatGBT was introduced late in 2022, big tech firms are making significant investments to bring generative AI technology into their products. They also want to offer AI-enabled cloud infrastructure to their customers. The enormous computing power needed to develop and operate generative AI products is well beyond the capabilities of traditional cloud offerings. To support the burgeoning AI economy, the tech giants are jockeying for land near inexpensive sources of electricity to build new data centers despite layoffs and cutbacks in other areas of their businesses.
                              • The Dodge Momentum Index (DMI) decreased 5.1% in April 2023 to 180.9 (2000=100), down from the revised March reading of 190.6. 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 8%, and institutional rose by 0.3%. Commercial planning weakened across several segments, including office, retail, and hotel projects. In the institutional sector, healthcare and amusement gains were largely offset by slower planning growth for education projects. Dodge’s associate director of forecasting said, “On par with our expectations, the Dodge Momentum Index continued to recede in April, due to declining economic conditions and ongoing banking uncertainty. Weaker commercial planning is driving the DMI’s decline, as it is more exposed to real-time economic changes than the largely publicly funded institutional segment.”
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