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36th Annual MCN Contractor Survey

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Respondents to the 36th annual Metal Construction News Contractor Survey expressed a general sense of optimism about their business prospects and noted that 2016 for the most part was a better year than 2015. However, our contractor's optimism was not nearly as vigorous as expressed by the architects in the Metal Architecture Architect's Survey. Contractors reported lower incremental improvement in 2016 and were a bit more wary about 2017.

In a way, that attitude more closely matches what economists report about the construction industry. The 2017 Dodge Construction Outlook from Dodge Data & Analytics, National Harbor, Md., predicts U.S. construction starts will increase 5 percent to $713 billion in 2017. Last year, starts increased 1 percent, which was lower than expected after a robust 11 percent increase in 2015.

FMI Corp., Raleigh, N.C., reports in its 2017 U.S. Markets Construction Overview that the confidence extends to all market sectors. FMI reports on put-in-place construction activity (compared to construction starts by Dodge) and showed a 5 percent increase in 2016 over 2015. This year, FMI predicts put-in-place construction will edge up 1 percent.

The residential construction market also looks positive with the National Association of Home Builders reporting that housing starts should increase about 5.9 percent in 2017 from 1.17 million in 2016 to 1.24 million. Most of the growth will come in the single-family construction market (9.2 percent) while the multifamily market looks to cool just a bit in 2017, down slightly less than 1 percent.

The Joint Center for Housing Studies at Harvard University anticipates a strong start to 2017 that will moderate in the second half of the year. By the third quarter, in spite of the slower growth rate, remodeling activity should surpass $327 billion on an annual basis, which will exceed its previous peak in 2006, even adjusting for inflation.

Contractors in our survey reported strong gains in metal building and metal wall panel construction in 2016 compared to 2015 but a flat growth curve in metal roofing. Light-gauge metal framing increased in the same period, with interior usage jumping significantly.

 

Average Square Footage Increase by Metal Building Product

 

General Statistics

Nationally, contractors in our survey reported gross contracting sales volume at an average of $8.34 million. Eastern contractors topped the list with an average of $11.57 million while the Midwest contractors shored up the bottom with a modest $5.442 million average.

Interestingly, the average metal project sales volume was consistent across the regions and comes in at $3.68 million nationally. That indicates that respondents in the East are likely more diversified beyond the metal construction industry, while Midwest contractors may be more tightly tied to the industry.

As in past years, the largest cohort of respondents to our survey was general contractors (44.8 percent) followed by metal building contractors (15.2 percent) and roofing and metal roofing contractors both representing 9.6 percent of respondents.

Contractors in the West are more likely to work with architects (77.7 percent) by a considerable margin than the other regions. All regions indicate they anticipate greater involvement in projects with architects in 2017 compared to 2016. The national average was 57.4 percent in 2016 and projected to be 60.1 percent in 2017.

(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 number of respondents to our survey who are involved in metal building construction holds fairly constantly at just above 70 percent. While the percentage may vary region to region-with a low of about 65 percent in the South and a high of over 80 percent in the Midwest-the number doing metal building construction doesn't change much from 2015 to 2016 or projected into 2017. That's not surprising that companies are less likely in good economic times to upset the ship and either take on new services or jettison existing services.

In 2016, nearly 60 percent of our respondents built fewer than 15 metal buildings, with most (25.8 percent) reporting construction between two and four. Only 12.9 percent built more than 50 metal buildings in 2016. Projecting into 2017, the respondents expect to be building more metal buildings with 15.4 percent anticipating construction more than 50 buildings and only about 55 percent building less than 15.

Nationally, respondents saw an increase in the size of metal buildings. In 2015, the average square footage was 24,522 and in 2016 in jumped 8.4 percent to 26,774. Respondents in the East and West report the largest increases. As is usual, about 75 percent of the buildings come in under 50,000 square feet with nearly 30 percent of the total built showing at less than 10,000 square feet.

 

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

As with metal building participants, the number of respondents involved in metal roofing construction held steady in 2016 at 61.6 percent. Respondents anticipate no significant change to that in 2017.

The number of projects our respondents completed in 2016 seems to be clumped in two different groups. Just over 30 percent constructed between two and four metal roofing projects and about 20 percent did more than 50. The larger number likely includes a significant number of residential roofing contractors who tend to do more projects in a year than commercial contractors.

No matter how many projects completed, though, the size of the roof remained constant from 2015 to 2016 at just over 27,000 square feet. Bearing out our assumption about residential contractors, over 27 percent of our respondents report doing residential projects. That is fewer than reported doing commercial (50.4 percent) and industrial (37.6 percent) but more than all the other market segments.

We divide out new metal roofs on non-metal buildings in our survey. Those projects tend to be much smaller coming in at just about 12,000 square feet, which is less than half the size of total metal roof projects completed. Contractors doing this kind of work tend to be increasing. In 2016, 26.1 percent reported this work compared to 25.4 percent in 2015. That's a small increase, but significantly, nearly 30 percent predict they will construct new metal roofs on non-metal buildings in 2017.

 

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

In a growing theme for this survey, we see little mobility in the number of respondents taking on metal wall panel projects. 51.2 percent reported doing them in 2015 and 2016, and only 53.6 percent look to take on such projects in 2017.

About a quarter of contractors involved in metal wall panel construction completed between two and four projects in 2016. We do see some growth in the number of projects completed between 10 and 24, which jumped from 18.5 percent in 2015 to over 28 percent in 2016.

Nationally, the square footage of metal panel projects completed increased 7.6 percent from 16,062 in 2015 to 17,387 in 2016. There was some volatility in the reporting from region to region.

Commercial projects were the dominant market segment with 46.4 percent of those respondents saying they completed those kinds of jobs. Industrial came in second at 36.8 percent and retail, a growing segment in the market overall, took the third spot with 20.8 percent of respondents saying they completed metal wall panels on retail stores.

 

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

At the top, we reported increases in square footage of both exterior and interior light-gauge metal framing projects from 2015 to 2016. Exterior projects increased 5.3 percent and interior projects jumped a significant 13.5 percent. It should be noted that there is considerable difference between one region and the other, which may be attributed to one or two very large companies skewing results.

Our survey respondents do report an expected increase in the number of companies taking on exterior framing projects in 2017 with 36 percent of respondents projecting this kind of work compared to only 29.6 percent in 2016. This is the largest jump in participation of any type of project reported in this survey.

Whether it's interior or exterior framing, about 75 percent of respondents do fewer than 15 projects in 2016. For the most part, that is true in 2015 and projected for 2017 as well.

 

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