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

                                  Mar 14, 2024 - Industry Poised for Rebound
                                  • The tile and terrazzo contracting industry is expected to return to sales growth in 2024 after a weak 2023 and solid gains during the pandemic. The industry’s year-over-year sales rose 5.7% in 2020, 11.8% in 2021, and 7.7% in 2022 before falling -2.2% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales in the tile and terrazzo contracting industry are expected to increase by 3.8% in 2024, then grow by just under 8% per year in 2025, 2026, and 2027, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                  • Total nonresidential building construction spending is projected to rise 8% in 2024 over 2023, according to FMI’s first-quarter 2024 North American Engineering and Construction Outlook. With growth of 18%, manufacturing will lead 2024 nonresidential building construction, followed by lodging (+12%), educational (+10%), and healthcare (+8%). Some other segments of the nonresidential building sector face headwinds, including high interest rates, inflation, and tighter lending standards. These pressures and high vacancy rates will reduce office project spending by 2% in 2024. Commercial project spending is forecast to decline by 4% in 2024. High interest rates will also challenge the housing market. 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. Home improvement project spending will drop 4% in 2024 from 3% growth in 2023.
                                  • Home remodeling spending is expected to weaken in 2024 but may hit bottom near the end of the year, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to decrease by 1.2% to $464 billion in the first quarter of 2024 compared to Q1 2023. In the second quarter of 2024, remodeling spending will drop to $454 billion, down 6.3% from Q2 2023. Spending will then decline to $452 billion in Q3 2024, down 7.8% from Q3 2023. However, in the fourth quarter of 2024, year-over-year spending is forecast to drop 6.5% to $450 billion. The Joint Center expects that by the end of the year, improvements in homebuilding activity and lower interest rates may help slow the steady decline in remodeling spending.
                                  • Home sizes increased during the pandemic as families sought more space, and interest rates were near record lows. As interest rates have risen and homes have become less affordable, the trend is reversing, and homes are getting smaller, according to National Association of Home Builders (NAHB) analysis of Census Bureau data. In the fourth quarter of 2023, the median single-family home square footage was 2,156, which is the lowest since 2010. The NAHB suggests that smaller home sizes will likely persist amid continued affordability issues.
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