Tile and Terrazzo 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 10,100 tile and terrazzo contractors in the US set and install ceramic tile, stone, and mosaics and/or mix marble particles and cement to produce terrazzo at the job site. Because the terrazzo market is a small part of the category, terrazzo contractors often install stone or tile, while few tile contractors also install terrazzo.

Dependence On General Contractors

Tile and terrazzo contractors generally work as part of a team of subcontractors managed by general contractors, which act as a gateway to construction jobs.

Competition From Alternative Materials

In the construction market, tile and terrazzo compete with other types of material, particularly in the flooring sector.

Industry size & Structure

The average tile and terrazzo contractor operates out of a single location, employs about 5-6 workers, and generates about $891,000 annually.

    • The tile and terrazzo contracting industry consists of about 10,100 establishments that employ about 54,400 workers and generate about $9 billion annually.
    • Most firms are small, independent operators that work within a limited geographical market. Even the largest companies are regional.
    • Tile outsells terrazzo by a wide margin; square footage of ceramic floor and wall tile totals about 3.5 billion per year, while square footage of terrazzo totals about 341 million.
                                  Industry Forecast
                                  Tile and Terrazzo Contractors Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 12, 2024 - Wages, Input Costs Rise
                                  • Employment in the tile and terrazzo contracting industry decreased slightly in the third quarter of 2023 compared to the same period in 2022. Wages in the tile and terrazzo contracting industry increased sharply in Q3 2023, year-over-year. Meanwhile, producer prices for some flooring inputs – including clay floor and wall tile – rose faster than the overall inflation rate in early Q4. Wage growth and higher materials prices could pressure tile and terrazzo contractor margins if those costs can’t be passed on.
                                  • Pressures, including high interest rates and a shortage of new homes available to purchase, are prompting housing bulls on Wall Street to construct entire build-to-rent communities, according to The Wall Street Journal. In Q3 of 2023, large landlords that own between 100 and 1,000 homes purchased just 1% of homes sold in the US, compared to 3% for all of 2022, according to John Burns Research and Consulting. Once a model that worked well when foreclosure rates were higher, industry watchers suggest that finding and managing investment homes individually has become too time-consuming, costly, and inefficient. While the build-to-rent community market is still small – about 900 neighborhoods in the US, according to the Urban Institute – the National Association of Home Builders believes that soon 10% of new homes will be build-for-rent.
                                  • Amid a US housing shortage and lack of affordable homes, some local governments are changing their zoning regulations to allow for more density, according to The Wall Street Journal. In some rapidly growing cities, housing has become scarce, and middle-class workers, teachers, police, and firefighters often cannot afford to live where they work. So-called upzoning rules are either in place or are being considered in Dallas, Boston, metros in Northern Virginia, Minneapolis, and Portland, Oregon. In 2023, zoning rules in Austin, Texas, were changed to allow up to three housing units on a single lot. However, housing industry observers point out that rezoning’s impact on affordability remains unknown. Attempts to change zoning to increase housing density have sometimes led to community backlash.
                                  • New single-family home sales decreased 12.2% month-over-month and were up 1.4% year-over-year in November 2023, according to the US Department of Commerce. While high interest rates continue to weigh on new home sales, the expectation that interest rates have peaked and tight inventories of existing homes for sale may boost new home sales later in 2024, according to the National Association of Home Builders (NAHB). Lower home prices may also lure buyers; the median new home sales price in November was $434,700, down 6% from November 2022 but up 4.8% compared to October 2023.
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