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 3,500 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 3,500 companies that employ about 77,000 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

                              Nov 16, 2022 - Nonresidential Building Construction Outlook Improves
                              • The Dodge Momentum Index (DMI) increased 9.6% in October 2022 to 199.7 (2000=100), up from the revised September reading of 182.2. The DMI 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 increased by 13%, and institutional rose by 2.9%. An increase in office and lodging projects boosted the commercial planning pipeline. The institutional sector was mixed amid a growing pipeline of recreation and education projects, but the number of healthcare and public planning projects declined. Developers and project owners continue to see healthy demand, despite recession concerns, although continued inflation, high interest rates and materials costs, and labor shortages have the potential to blunt the flow of new projects.
                              • Some real estate developers are holding off on new office projects as remote work has eroded demand for new office space, and rising interest rates make projects more expensive, according to The Wall Street Journal. Office occupancy is only about half of what it was before the pandemic, which has prompted some major real estate firms, including Varnado Realty Trust; Hines, Kilroy Realty Corp.; and Brookfield Asset Management, to tap the breaks on new office development projects. The national office vacancy rate is 12.5%, up from 9.6% in 2019, according to commercial real estate data firm CoStar Group. About 37% of the office space currently under development remains available, double what it was in 2019, according to CoStar.
                              • Business optimism among civil construction contractors and engineers moderated in the third quarter of 2022 compared to Q2, according to The Civil Quarterly released by Dodge Construction Network, Infotech, and Hexagon in October. About 53% of civil contractors surveyed in Q3 said they expect their revenue to increase over the next 12 months, which was down from the 66% who had the same expectation in Q2. In Q2 2022, 51% of civil contractors felt their profits would rise over the next 12 months, but those expecting rising profits fell to 45% in Q3. Among civil contractors who expect revenue and/or sales to drop over the coming year, 60% believe an economic downturn will result in fewer private projects. More than 90% of survey respondents said their projects have been affected by rising construction materials costs.
                              • While steel prices have begun to moderate from levels seen earlier in the pandemic, cement and concrete prices continue to rise, and some industry watchers expect the trends to continue, according to Construction Dive. US commodity producer prices for iron and steel were down 19.8% in October 2022 compared to the same month a year earlier. However, cement prices rose 13.,4% during the same period, and ready-mix concrete prices were up 11.1%. Higher production and transportation costs, as well as ongoing supply chain disruptions, have pushed cement and concrete product prices higher, according to Ireland-based construction consultancy Linesight. The Associated General Contractors of America point to a drought that has lowered water levels on the Mississippi River, slowing barges that carry cement and other heavy materials.
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