Renewed residential and nonresidential construction will benefit industry demand
Los Angeles, CA (PRWEB) November 17, 2012
The Masonry industry is highly fragmented, made up of many small-scale, geographically dispersed contractors. According to IBISWorld industry analyst Sean Windle, “The skilled services performed by this industry include brick and block laying; pointing, tuck pointing, cleaning and caulking masonry; building foundations using masonry products; and working with granite, marble and slate.” This industry generates 45.0% of its annual revenue from work on residential construction, which includes brickwork on exterior wall sidings and pavement. Another 32.0% of industry revenue is generated from the laying of masonry and dimension stone on walls, facades and foyers in offices, retail stores and other commercial buildings. The remaining balance comes from schools, hospitals and other municipal construction projects, and from non-building construction work, such as fences, dams and reservoirs.
Industry revenue is expected to increase 3.8% in 2012 to $26.6 billion. “The recovery in demand for masonry and bricklaying services in the residential construction market is expected to gather momentum during the year,” says Windle, which will help offset slower growth in demand from commercial builders, particularly office building developers, which are dealing with high vacancy rates. Even with an increase over the current year, industry revenue has fallen at an estimated average annual rate of 3.9% over the five years to 2012. Demand for bricklaying and masonry services in the residential construction market collapsed after the housing bubble burst leading up to the Great Recession, with the number of housing starts falling at an annualized rate of 11.7% over the past five years. Over the same period, the value of private nonresidential construction declined at an average annual rate of 4.7%.
The Masonry industry has an extremely low concentration of ownership, with the five largest contractors combining for significantly less than 5.0% of total industry market share in 2012. Most masonry contractors are small-scale, independent operators that employ fewer than five individuals. Contractors are often unwilling to employ qualified journeymen full time due to the additional costs of employment, such as health benefits and vacation time. More than three quarters of industry establishments currently employ fewer than 10 people, and 68.6% employ fewer than five people.
Looking ahead, a strong recovery in the residential and commercial building markets will positively affect industry performance. Over the five years to 2017, revenue is forecast to increase and level out close to its prerecession value. During this time, competitive pressures will ease and profit margins will widen. Profit, as measured by earnings before interest and taxes, is projected to grow from 2.8% of industry revenue in 2012 to 4.5% in 2017.
For more information, visit IBISWorld’s Masonry in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry are primarily engaged in masonry work including stone setting, brick laying, brick-to-glass block laying and exterior marble, granite and slate work. Activities in this industry include additions, alterations, maintenance, repairs and new construction.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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