37th Annual Contractor Survey

After a number of years of poor industry performance, the 37th Annual Metal Construction News Contractors Survey reveals the metal construction industry has been on a roll recently. Contractors report great optimism about the market and generally predict a strong 2018.

By Paul Deffenbaugh

Cont Survey Feb18 1

There are, though, a couple of clouds on the horizon, and one major issue challenging the industry: the shortage of skilled labor. The Bureau of Labor Statistics reports the construction industry added 226,000 new jobs for the 12-month period ending in January 2018, which is a 3.3 percent increase. Finding workers, especially skilled workers, to fill those positions is a demanding challenge.

Anecdotally, contractors report they have to turn down work because they can’t find the labor to complete projects. For the foreseeable future, that trend looks to hold true. The 2018 Dodge Construction Outlook from Dodge Data & Analytics, New York City, predicts U.S. construction starts will increase 4 percent in 2018 and another 3 percent in 2019. Back out the multifamily housing and electrical utilities and gas plants segments, which will take big hits this year, and the growth of the industry jumps to 5 percent.

The National Association of Home Builders expects 2018 to be another strong year overall for the housing market, predicting 2.7 percent growth in housing starts. That increase is being driven by a predicted 5 percent increase in single-family housing starts. As mentioned, a poor multifamily market will hold down the overall growth.

In a real bright spot, the remodeling market looks to have one of the biggest increases in more than a decade, according to the Joint Center for Housing Studies at Harvard University. Its Leading Indicator of Remodeling Activity model anticipates a 7.5 percent increase in 2018. For architects in the metal construction market, that means a potential for more metal roof installations and, perhaps, increased use of metal wall panels, especially in the custom home market.

Average Square Footage Increase by Metal Building Product

General Statistics

Total sales for our survey respondents in 2017 was $6.93 million. Of that total, $4.54 millioncame from metal buildings, metal roofing, metal wall panel or light-gauge framing projects. Respondents from the Midwest showed the highest volume last year, but companies based in the East claimed the top spot for metal projects.

For several years, our breakout of types of contractors has held steady. This year, respondents were mostly general contractors (46.7 percent) or metal building contractors (21.7%).

Nearly half of our survey participants use design-build contracts, with the remainder roughly split between new spec work and retrofit/remodeling.

Close to 60 percent of respondents report that they work with architects and they anticipate that holding steady for 2018. The contractors based in the East (73 percent) and West (69.2 percent) were far more likely to work with architects than those in the South (40.4 percent) or Midwest (49.3 percent).

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

Company Location

Type of Firm

Average Annual Gross Contracting Sales Volume

Average Metal Project Sales Volume

Breakdowns 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 constant 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 and East—the number doing metal building construction doesn’t change much from 2016 to 2017, or projected into 2018. There is a heavy capital and intellectual investment in metal building contracting, so adding different services or moving out of the industry into other services is unlikely.

The breakdown of how many projects a contractor does in a year follows a roughly 60/40 split. Just over 60 percent of respondents did 15 or fewer metal building projects in 2017, while just under 40 percent did more than that. Only 13 percent report doing more than 50 metal buildings last year.

The average size of metal buildings increased 11 percent from 2016 to 2017, according to our respondents. Compared to last year’s survey, we see increases in participants constructing metal buildings in the institutional and transportation categories, and decreases in the agricultural, mini-storage and cold-storage. That shift may account for the increase in square footage. More than 50 percent of the buildings completed nationally were under 20,000 square feet with more than 30 percent of all buildings under 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 Metal Building Project Types in 2017

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 2017 at 49.3 percent. Respondents anticipate no significant change to that in 2018.

About 70 percent of companies did fewer than 10 metal roofing projects in 2017, while just under a quarter did more than 25. What is striking this year, though, is the optimism about 2018. Companies anticipate executing more metal roofing projects in 2018 than in 2017.

Metal roofing projects, unlike metal building projects, stayed about the same size from 2016 to 2017. Respondents say the size of the projects increased only about 1.9 percent year over year.

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 10,000 square feet, which is less than half the size of total metal roof projects completed. Our respondents this year were more likely to do this kind of work than those who responded last year, but the number also indicates this group was less likely to take on this kind of project in 2017 compared to 2016.

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

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. About 40 percent of our survey takers this year report doing metal wall panel projects. That is down from last year when nearly half of the respondents did this kind of work. That doesn’t indicate a decrease in metal wall panel installation, only a change in the make-up of the survey audience.

Thirty percent of contractors involved in metal wall panel construction completed five or fewer projects and half fewer than 10. At the top of the scale, nearly 30 percent of respondents said they did more than 25 metal wall panel projects in 2017.

Nationally, the square footage of metal panel projects completed was virtually unchanged from 2016 (12,816) to 2017 (12,837). There was some volatility in the reporting from region to region.

Respondents were more likely to do commercial projects (39.7 percent) than any other type, although 31.5 percent reported doing an industrial building. The remaining building categories were all below 20 percent of respondents.

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

About 20 percent of our respondents indicate they do some exterior light-gauge framing projects, and just slightly over that number do interior framing projects. As with the other metal project types, these percentages held steady from 2016 to 2017 and projected for 2018.

About 70 percent of respondents report doing fewer than 15 projects in a year, whether they are exterior or interior. We did have a few larger companies (14.3 percent exterior and 6.5 percent interior) who took on more than 50 projects in 2017. The respondents anticipate a significant increase in the number of projects they will take on 2018.

The size of the projects they completed increased slightly from 2016 to 2017. Light-gauge steel framing project sizes inched up 6.5 percent for exterior and 5 percent for interior.

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