As consumers resume spending on home improvement projects, revenue will recover.
Los Angeles, California (PRWEB) June 21, 2013
The Roofing, Siding and Insulation Wholesaling industry primarily sells products to builders and developers, who use them to construct, remodel and repair residential, commercial and industrial buildings. “The volume of industry-related products ordered from wholesalers has contracted over the past five years because residential construction projects were suppressed during the housing crisis,” according to IBISWorld industry analyst Deonta Smith. The same was true for contractors that specialize in commercial building construction, as the total value of private nonresidential construction declined sharply during the period. Primarily as a result of the demand slump brought on by the recession, industry revenue declined at an average annual rate of 2.1% to $22.0 billion over the five years to 2013.
Over the past five years, the Roofing, Siding and Wholesaling industry has experienced low levels of consumer confidence, high unemployment and declining per capita disposable income, which hurt demand for industry products used for home improvements. However, these factors were offset by demand for roof construction, which has remained constant during this period. “Reroofing projects are less likely to be postponed during a slow economy than other construction projects, which helped industry sales during the downturn,” says Smith. Roofing products for repairs of existing buildings accounted for the majority of revenue in the five years to 2013. Storms involving hurricanes and tornadoes also helped steady the stream of demand for these products.
As downstream construction activity recovers, particularly new home construction, industry revenue is expected to rise. In the five years to 2018, domestic housing starts are expected to increase. Demand for industry products is also set to get a boost from downstream retailers as consumer spending on home improvements rises with per capita disposable income. Sustained growth in most downstream building markets will boost demand for industry products over the next five years.
Industry enterprise figures are forecast to remain relatively constant over the period as operators continue to make acquisitions, increasing the industry's concentration of ownership. The industry has a highly fragmented structure and comprises many small-scale establishments servicing narrow regional markets. Most industry operators employ fewer than 20 people; less than 1% of operators employ more than 100 people. The larger-scale players, such as American Builders & Contractors Supply, Beacon Roofing Supply and CRH PLC, tend to have multiple establishments, with wholesale and distribution operations in each key regional market. Additionally, employment numbers are projected to rise as industry wholesalers increase hiring in response to swelling demand. For more information, visit IBISWorld’s Roofing, Siding and Insulation Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments that wholesale nonwood roofing and nonwood siding and insulation materials. Sales are typically direct to building contractors, large retail hardware chains and small, independent hardware stores.
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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