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

Structural iron and steel work steel work is one of the top five most hazardous occupations in the US, as the incidence of injury and illness for structural steel and precast concrete contractors was 14% higher than the national average in 2021.

Inflation, High Interest Rates Challenge Construction Spending

After remaining mostly resilient during the pandemic, inflation and higher interest rates pose challenges for construction spending.

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

                              Mar 14, 2024 - Wages Growth Outstrips Pricing Increases
                              • In the fourth quarter of 2023, structural steel and precast concrete contractor employment decreased slightly compared to Q4 2022, and wages increased significantly over the same period. Producer prices for precast concrete products in Q4 also increased but at a slower pace than industry wages, which could signal a pinch on margins.
                              • 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%).
                              • 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.”
                              • Apartment buildings are getting taller amid sustained demand for rentals, scarcity of land, and some cities’ willingness to change zoning rules to attract development, according to The Wall Street Journal. Between 2021 and 2023, US cities added more than 2,900 buildings with more than 200 units, a 17% increase of the number built between 2018 and 2020, according to property data firm Yardi. High interest rates and single-family home prices continue to prop up demand for rentals, even among those with relatively high incomes. Some cities are easing some zoning rules, such as minimums for parking. The economics of multifamily development have also changed. Higher construction costs mean buildings need to have more units to be profitable.
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