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 10,500 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 $857,000 annually.

    • The tile and terrazzo contracting industry consists of about 10,500 establishments that employ about 55,000 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

                                  May 13, 2024 - Industry Poised for Rebound
                                  • The tile and terrazzo contracting industry is expected to return to stronger sales growth in 2025 after high interest rates led to sluggishness in some construction segments in 2023 and 2024. The industry’s year-over-year sales growth slowed to 3.2% in 2023 after a rise of 10.6% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth in the tile and terrazzo contracting industry is expected to further moderate to 1.1% in 2024, then see average annual growth of about 6.8% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                  • The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the first quarter of 2024 was 66, down one point from the fourth quarter of 2023, according to an April 2024 report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the first quarter, the Current Conditions Index portion of the RMI remained unchanged from Q4 2023 at 74. The Future Indicators Index component of the RMI was also unchanged at 59. While the RMI remained solidly in positive territory in Q1 2024, the NAHB noted that high prices for labor and materials continue to pose challenges to the remodeling industry. The NAHB said that although the Current Conditions Index and the Future Indicators Index were unchanged in Q1, the overall RMI dropped a point due to rounding.
                                  • On May 9, the average fixed rate for a 30-year mortgage declined slightly to 7.09%, marking the first weekly rate decline in six weeks, according to Freddie Mac. Elevated mortgage rates come amid the spring home-buying season. Freddie Mac says one-third of annual home sales occur between March and June. Freddie Mac also noted that some buyers may have adjusted to the higher-rate environment, as recently released data suggest that pending home sales were at their highest level in a year. However, the National Association of Homebuilders (NAHB) estimates that if the average fixed rate for a 30-year mortgage had remained at levels last seen in February 2023 (under 6.25%), an additional 4.5 million US households would be able to afford a median-priced new home.
                                  • North American nonresidential building construction and engineering spending in 2024 is expected to grow by about 9%, according to FMI’s second-quarter 2024 North American Engineering and Construction Outlook. Nonresidential building construction subsectors that are expected to see double-digit growth in 2024 include manufacturing (up 19% in 2024 over 2023), lodging (+14%), public safety (+12%), and transportation (+10%). Other pockets of robust growth include educational, healthcare, and amusement and recreation. High interest rates continue to put downward pressure on residential and commercial projects. Spending for multifamily is expected to decline by 8% in 2024 after projects in development peaked at 1 million units in mid-2023. Single-family construction spending is forecast to be flat in 2024.
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