The recovery in housing investment will boost revenue for drywall contractors
Los Angeles, CA (PRWEB) April 05, 2012
With the real estate market in its worst downturn since the Great Depression, demand for drywall installers has contracted sharply. Over the five years to 2012, industry revenue is expected to decrease at an average annual rate of 5.4%. The Drywall Installers industry generates an estimated $34.5 billion in revenue, and is composed of companies that install drywall panels and apply plaster to interior walls of homes or buildings as well as other forms of insulation. Demand for the industry's services primarily depends on the level of activity in the residential, commercial and industrial real estate markets, all of which have faced severe declines over the past five years, according to IBISWorld industry analyst Caitlin Moldvay. With revenue drying up, industry operators were forced to exit the industry. Between 2007 and 2012, the number of companies offering drywall, plasterwork and insulation installation declined at an average annual rate of 3.0% to an estimated 18,678 companies. Profit margins for the average company in the industry fell, adversely affected by heightened price-based competition and fewer contracts. The industry has, however, benefited from tax credits provided to homeowners investing in energy efficient upgrades such as insulation work. During 2012, the residential and non-residential real estate markets are projected to experience modest improvements, which will lead to an estimated 4.7% gain.
Over the next five years, the Drywall Installers industry will benefit from the cyclical improvement in the real estate market, which will generate renewed demand for drywall installation, plasterwork and insulation services, Moldvay said. Between 2012 and 2017, industry revenue is forecast to increase. Although not expected to reach pre-recessionary levels, housing starts are projected to rise strongly in the next five years. The majority of this growth will take place during the latter half of the five-year period. Further, non-residential construction is expected to accelerate.
The Drywall Contractors industry has a very low level of market share concentration. The majority of industry operators are smaller firms that operate within a local or regional sphere with fewer than five employees. The industry's low level of concentration is expected to continue over the five years to 2017. More firms are expected to enter the market as the construction sector improves; however, the majority of these operators will be smaller firms and non-employers that left the industry during the Great Recession. This trend is similar to other sectors that are dominated by small operators, since these entities often enter and exit the industry, depending on changes in demand. For more information, visit IBISWorld’s Drywall Installers report in the US industry page.
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IBISWorld industry Report Key Topics
This industry includes companies that are primarily engaged in drywall, plasterwork and building insulation work. Plasterwork involves applying plain or ornamental plaster as well as installing lath. Industry operators are used for new buildings, additions, alterations, maintenance and repairs.
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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