Demand for carpentry services crashed in line with housing investment
Los Angeles, CA (PRWEB) September 16, 2012
The Carpenters industry comprises contractors that provide specialist framing carpentry services, including construction of wooden framing and permanent foundations, wall installations and wooden beam and truss installations. Carpenters also perform finish carpentry services, such as on-site construction and installation of doors, windows, stairs, shelving, cupboards, cabinets and decks. According to IBISWorld industry analyst Andrea Alegria, “About 60.0% of the revenue generated by carpentry contractors is derived from subcontracting services to a prime building contractor; the remaining 40.0% is earned from directly contracting to the client (typically the building owner or occupier or property manager).”
Carpenters are not exposed to international competition; however, industry contractors directly compete with unskilled do-it-yourself (DIY) homeowners in the housing alterations and additions market and with other skilled tradespeople in the new building construction market (e.g. general building contractors and concreting contractors). “The industry has a particularly low level of market share concentration,” says Alegria, “even by comparison with other building and construction trade industries.” Contractors tend to shift across to become general building contractors when they attain a significant scale and seldom continue to undertake work solely in the carpentry contracting industry. Many of the establishments in this industry are one or two person operations with owner/partners comprising a significant proportion of the industry's workforce. The two largest players in this industry account for less than 1.0% of annual industry revenue.
Like many construction-related fields, the Carpenters industry was significantly challenged by the economic recession. Industry revenue has declined at an average annual rate of 7.9% to $37.6 billion in the five years to 2012. The collapse of the housing market in 2007 brought construction activity to a screeching halt across most markets. Industry revenue declined from 2007 through 2010, plunging by as much as 27.9% in 2009. As economic recovery and a better employment market led to increases in home remodeling activity and boosted demand for new housing, revenue began recovering in 2011. Industry revenue is expected to further grow 11.6% in 2012 as a result of strong recovery in the residential markets and a significant boost in the number of housing starts.
IBISWorld projects industry revenue will continue to recover in the five years to 2017 underpinned by the projected robust growth in total residential construction. Pent-up demand and better economic conditions will boost the need for new housing construction, while lower unemployment, improved corporate profit and increased spending will also create a greater need for carpentry services for retail, office, hospitality and industrial spaces. Industry revenue is expected to grow over the five years to 2017.
For more information, visit IBISWorld’s Carpenters in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments primarily engaged in framing, carpentry and finishing work. The carpentry work performed includes new work, additions, alterations and maintenance and repairs. Activities performed by establishments in this industry range from the installation of doors and windows to paneling, steel framing work and ship joinery.
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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