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35th Annual MCN Contractor Survey

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By their nature, contractors tend to be an optimistic lot. Even during the worst of the construction downturn, contractors tended to believe that their businesses would improve. Now that we're facing a stronger construction market, the Metal Construction News' 35th Annual Contractor Survey backs up that innate optimism with some hard numbers.

According to the New York City-based Dodge Data & Analytics' Construction Outlook, the commercial construction market grew 13 percent in 2015, which was much greater than the 9 percent increase Dodge had predicted. For 2016, Dodge predicts a 6 percent gain to a total of $712 billion. It's a slower rate of increase than we've experienced, but still a nice little bump if it materializes.

Using a slightly different analysis, FMI Corp., Raleigh, N.C., expects construction spending to reach $1.09 trillion in 2016, with manufacturing spending leading the way. Other strong markets will be lodging, office, amusement and recreation. The National Association of Home Builders predicts housing starts for 2016 will hit 1.26 million with 877 of those coming in the single-family housing market. The association warns that shortages of labor, lots and building products could constrain growth.

Across the board, we can expect 2016 to be a good year for growth in the construction industry, including non-residential and residential. Our readers see the metal construction industry growing significantly as well, whether it's metal buildings, metal roofing, metal wall panels or light-gauge steel framing.

 

Average Square Footage Increase by Metal Building Product

 

General Statistics

About 40 percent of the respondents to the 35th Annual Contactor Survey are general contractors, 20 percent metal building contractors and the remainder comprised of different metal-related trades.

Every region of the country was evenly represented, with the southern contractors having a slightly higher participation rate. Nationally, the respondents had total contracting sales of $26,257,939 and sales in the metal contracting arena of $9,359,952. Our respondents this year did not report numbers quite as high as last year's respondents, but while this pool of contractors may be smaller in size, they do report strong growth in almost all areas of construction.

In one surprising turn from last year, the number of respondents reporting doing new speculative work was considerably higher than in previous years. While part of that may be due to a different cohort of respondents, it could also point to increasing interest in speculative work because of a strengthening economy.

(Percentages may not add up to 100 percent due to rounding errors.)

 

Company Location

 

Type of Firm

 

Average Annual Gross Contracting Sales Volume

 

Average Metal Project Sales Volume

 

Breakdown of Metal Construction Contracts

 

Amount of Metal Construction Projects Involving Architects

 

Metal Buildings

The size of metal buildings, measured in square footage, increased in 2015 by 8.6 percent nationally compared to 2014. The number of respondents reporting they are involved in metal building construction declined slightly in 2015 compared to 2014, but is predicted to hold steady going into 2016. Companies building more than 50 buildings a year increased slightly in 2015, but companies doing between five and nine buildings annually increased significantly.

As in past years, commercial and industrial projects are the most likely buildings to be constructed using a metal building system. Regionally, contractors in the South report a far higher incidence of commercial building construction compared to other types, while Eastern contractors are nearly as likely to construct industrial as they are commercial. Interestingly, Eastern contractors are far more likely to do governmental buildings than other regions. Besides commercial and industrial, the highest rankings for building type nationally are retail, government and institution.

As one would expect, contractors are more likely to build more small metal buildings. Nationally, nearly 60 percent of the buildings constructed were less than 20,000 square feet. It should be noted, though, that the East region builders were more likely to build larger buildings than the other three regions. In the East, about a third of all buildings were larger than 50,000 square feet, while in the South it was only 27 percent, the Midwest only 20 percent and the West only 15 percent.

 

Number of Respondents Involved in Metal Building Construction

 

Average Number of Metal Buildings Completed per Those Involved

 

Average Square Footage of Metal Buildings Completed

 

Percentage of Contractors Involved in Various Metal Building Project Types in 2015

 

Metal Building Projects Completed, According to Building Size

 

Metal Roofing

The number of our respondents participating in metal roofing projects is holding steady nationally from 2014 to 2015 and projected for 2016. Most of the regional respondents not changing much either, suggesting a steadiness in the metal roofing market.

We did see declines in the number of respondents building more than 50 projects in 2015 compared to 2014, but while the top cohort declined, the next two highest (25-49 projects and 15-24 projects) saw significant increases year over year. Projecting forward to 2016, our respondents don't anticipate any major changes in the number of projects they take on in metal roofing.

The average job size increased 12.5 percent nationally to an average square footage of 22,089. Increases in project size were reported in all regions, with the South reporting the greatest gains, although there is one exception: the West. Western metal roofing contractors reported a 15.2 percent decrease in the average square footage of a metal roofing project.

Far and away, most of those projects are in commercial construction, with the second most being industrial. Governmental, retail and institutional cluster together after industrial.

In the category of new metal roofs on existing buildings, participation has also held steady nationally, with about a quarter of respondents saying they were involved in this kind of work. Midwestern contractors reported a sharp decrease in participation in 2015, but project a large 2016 increase to match the 2014 participation rate.

 

Number of Respondents Involved in Metal Roofing Construction

 

Average Number of Metal Roofs Completed per Those Involved

 

Average Square Footage of Metal Roof Projects Completed

 

Percentage of Contractors Involved in Metal Roofing Types

 

New Metal Roofs on Non-Metal Buildings

 

Percentage of New Metal Roofing on Non-metal Buildings

 

Average Square Footage of New Metal Roofs on Non-metal Buildings

Metal Wall Panels

Metal wall panel projects participants are expected to hold steady for 2016, according to survey respondents. There will be little change in any of the regions of the contractors entering or leaving the market.

Steady as she goes is also the watchword for the number of projects our respondents did in 2015 compared to 2014. That steadiness holds on through their projections for the number of projects in 2016, although those reporting only doing one project will decrease by about half.

The average square footage of metal wall panel projects among respondents increased more than 16 percent in 2015 compared to 2014. Regionally, there were significant differences in growth, though. In the Midwest, respondents reported a 28.1 percent increase, while in the West, they reported an 11.5 percent decrease.

Again the greatest market segment for metal wall panels is commercial construction, with 45.9 percent of respondents saying they did wall panel jobs in that segment. At a distant second was the industrial segment at 29.7 percent, while government and retail projects came in tied for third position at about 20 percent.

 

Number of Respondents Involved in Metal Wall Panel Construction

 

Average Number of Metal Wall Panel Projects Completed per Those Involved

 

Average Square Footage of Metal Wall Panels Construction

 

Percentage of Contractors Involved in Metal Wall Panel Construction Types

 

Light-gauge Steel Framing

Our survey breaks light-gauge steel framing into two subsections: exterior and interior. We do this to differentiate between structural framing and tenant build-outs. In both categories, the number of respondents participating in such projects is expected to hold steady for 2016, matching the 2014 and 2015 numbers.

These respondents tend to do fewer of those projects annually, so the number of respondents doing more than 25 light-gauge steel framing projects is about 15 percent, whether exterior or interior. The vast majority of respondents tend to do between five and 15 projects.

The average size for light-gauge framing projects increased in 2015 compared to 2014 (15.2 percent for exterior projects and 16.6 percent for interior projects).

 

Number of Respondents Involved in Light-gauge Exterior Framing

 

Average Number of Light-gauge Exterior Framing Projects Completed per Those Involved

 

Average Square Footage of Light-gauge Exterior Framing Projects

 

Number of Respondents Involved in Light-gauge Interior Framing

 

Average Number of Light-gauge Interior Framing Projects Completed per Those Involved

 

Average Square Footage of Light-gauge Interior Framing Projects