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

                              Nov 13, 2023 - Nonresidential Projects Drive Construction Spending Growth
                              • Nonresidential and residential construction spending have posted steady growth in 2023. However, while nonresidential spending was up year-over-year in mid-2023, residential spending was down over the same period as high interest rates and home prices have curbed demand. In the third quarter of 2023, structural steel and precast concrete contractor employment decreased slightly compared to Q3 2022, and wages increased significantly over the same period. Producer prices for precast concrete products have increased steadily in 2023, which could pinch margins as wage and other costs have also risen.
                              • North American engineering and construction spending is forecast to rise by 5% in 2023 compared to the 12% growth seen in 2022, according to FMI’s fourth-quarter 2023 North American Engineering and Construction Outlook. Overall growth in 2023 will be supported by double-digit gains in key segments, including manufacturing (up 58%), multifamily (+18%), sewage and waste disposal (+18%), conservation and development (+17), lodging (+16%), water supply (+16%), and highway and street (+12%). Other segments expected to post strong growth include healthcare (+9%), public safety (+9%), amusement & recreation (+8%), educational (+8%), office (+8%), transportation (7%), and commercial (+6%). With a 13% decline in spending, single-family housing is the only segment expected to post negative growth in 2023.
                              • The total value of construction put in place increased by 0.4% in September 2023 compared to the prior month, according to the US Census Bureau. Spending for nonresidential projects increased 0.3%, and residential spending rose 0.6%. Within the nonresidential segment, spending growth was led by educational projects, with an increase of 1.8% in September compared to August, followed by amusement and recreation (+1.3%), conservation and development (+1.3%), and power (+0.9%). In commenting on September construction spending, Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said, “While some private categories, including power, commercial and amusement and recreation saw healthy month-over-month increases, publicly financed construction accounted for more than 72% of September’s rise. Given increased federal infrastructure spending and exorbitant financing costs for private construction, that dynamic should remain firmly in place over the coming months.”
                              • High diesel prices and government incentives are prompting some construction firms to switch to electric construction equipment, according to Construction Dive. While compact electric excavators have been in use for some time, more recently, advances in battery technology have led equipment manufacturers to offer larger electric-powered machinery, including cranes, mining trucks, and heavy-duty equipment. In addition to lower operating and maintenance costs, electric equipment also reduces emissions and noise. The Inflation Reduction Act includes a tax credit for 30% of the purchase price for all-electric equipment and 15% of the cost of plug-in hybrid machinery.
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