42nd Annual Contractor Survey

by Paul Deffenbaugh | 1 March 2023 12:00 am

If you wanted to sum up the overall attitude among respondents to the 42 annual MCN Contractor Survey, you would use this phrase: “hold the course, and hope for better.” They report that 2022 wasn’t a great year, but it wasn’t a bad year. Across all the project types we survey—metal building systems, metal roofing, metal wall panels, light-gauge steel framing—the survey takers who report they do those kinds of projects remained relatively flat in 2022 compared to 2021. For example, 72.7% of respondents took on metal building construction in 2021 and 71.2% in 2022. That is barely a difference. The same was true in metal roofing: 51.5% in 2021 and 48.5% in 2022. It didn’t matter the type of project, little changed from 2021 to 2022.

But there was a significant change when those same people looked forward to 2023. With one exception, they anticipated being more involved in specific projects than they had been in 2022. The was an exception in metal building systems where 69.7% of respondents say they will do a metal building project in 2023, compared to 71.2% who did it in 2022. No change to speak of. But in metal roofing, respondents anticipate participation jumping from 48.5% to 56.1%. Metal wall panels from 45.5% to 54.5%.

It speaks to the characteristic of contractors we note every year: optimism. Contractors are almost always convinced the next year will be better than the last, which is a good thing. It’s a hard industry and pessimism about the future only makes it harder.

That seems to fly in the face of the overall construction market. Dodge Data & Analytics reported construction starts increased in 2022 by 17% over the previous year. That was much greater than the anticipated 6% increase. The total value of 2022 construction was $1.083 trillion. In its end-of-year report, though, the company says 2023 will be flat, with only a 0.7% increase in starts.

Part of the reason is the cooling residential market, which is already declining and the single-family market will probably drop another 6% in 2023, according to Dodge. However, multifamily will increase about 1%.

The real story is that 2023 will see flat construction growth only because of a huge increase in non-building construction (up 16%) due, in large part, to the money flowing because of the Infrastructure Investment and Jobs Act. According to Dodge, that increase will offset declines in commercial construction (-3%) and manufacturing (-43%).

General Statistics

In our annual survey, the South is always well represented while other regions do not participate as much. This year, the first part of that is true—36.1% of the respondents are from the South—but the second part is exaggerated, especially in the East, where only 14.8% of our respondents came from. Last year, 19.8% of survey takers came fromthe East. The Western region response rate was also down, with only 16.4% of respondents coming from the West, compared to 23.3% last year.

That low participation from the East in particular, shaped the results in multiple ways. Respondents from the East reported lower revenue ($8.17 million) compared to a national average of $9.9 million. Once metal project revenues are isolated, the difference became even more stark. Companies in the East reported metal project revenues of $2.56 million compared to the national average of $5.8 million. Throughout the report, you can see the East had smaller average projects and less participation by project type.

The breakdown of metal construction contracts was steady from year to year. In the 2022 survey, 46.5% of respondents used design-build contracts, 35.1% new spec work and 16.3% retrofit/remodel work. Those national numbers held steady among this year’s survey takers: design-build at 45.3%, new spec work at 25.7% and retrofit/remodel at 16%. (Survey takers from the East reported doing no retrofit/remodel work!)

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

Metal Buildings

Year to year, about 70% of the people who take our contactor survey are involved in metal building construction. They may be contractors or erectors, but their core business is working with metal building systems. Last year, the survey takers who worked in this field were a little higher than usual, 79.1%, but this year, the number has come into the normal range for the contractor survey.

Also as usual, the region most likely to be involved in this sector of the metal construction industry is the South (86.4%) while the region least likely is the East (58.3%). Those numbers are comparable to previous years, giving greater evidence to the differences among regions in the involvement of metal buildings.

The respondents to this year’s survey report that the metal building projects they completed last year were larger than those reported by last year’s survey takers. The average size of a metal building in 2022 was 37,704 square feet, which was a 15.5% increase over 2021. The rise in the construction of warehouses and other large buildings could account for this change.

Commercial projects are always the most common project for a metal building system among our respondents. This year, 86.5% of the survey takers said they took on a commercial job. Industrial work was second more common at 53%, which was significantly lower than reported last year (73.3%). One market segment to see growth was retail going from about 20% last year to nearly 27% this year. This matches U.S. Census Bureau reports on the overall increase in the retail market.

Metal Roofing

The average size of a metal roof last year was 19,952 square feet. That was a 2.6% increase over the average size in 2021 (19,449 square feet.) For new metal roofs on non-metal buildings, the average size was 17,233 square feet compared to 16,933 square feet in 2021, which was a 1.8% increase.

In our survey two years ago, we saw a huge jump in the number of respondents who reported they did metal roof construction. That percentage remained high both with last year’s survey and now this year’s. About half (48.5%) of the survey takers did a metal roofing project in 2022. Among this year’s respondents, that was a slight decline from 2021 (51.5%), but they report they anticipate doing more of this kind of work in 2023 (56.1%).

Most of the respondents (89.2%) do less than 25 projects a year, and about half do fewer than 10. The respondents to last year’s survey were much more likely to be heavily involved in metal roofing construction. More than 16% of them did more than 50 roofs a year, which would indicate they were likely residential roofers. That conclusion would be borne out by the change in square footage from last year’s urvey takers to this year.

As with metal buildings, the predominant market categories are commercial (78.9%) and industrial (50%). But agricultural and retail projects are also done by about a quarter of all respondents. Institutional, which would include educational projects, were done by the least number respondents (5.3%).

Metal Wall Panels

In a measure of consistency, respondents doing metal wall work were most likely to do commercial projects (75.7%), which mirrors the number reporting in metal buildings and metal roofing. Again, to remain consistent, industrial projects took up second place at 51.4%. About a quarter of the respondents to this year’s survey did an agricultural, retail or residential project. The incidence of respondents doing metal wall panel projects on residential work has held steady for the last few years, suggesting that this trend has leveled out. It is, though, much higher than it used to be. In 2016, only 13.6% of survey takers reported doing residential wall panel work in the previous year.

Our respondents anticipate doing a lot more work in metal wall panel construction in 2023 (54.5%). That’s up from the 45.5% who said they did that kind of work in 2022 and 43.9% in 2021. Unlike metal building systems and metal roofing, there were was only slight regional differences in the likelihood of doing metal wall panel construction. The South (59.1%) and West (54.5%) were both above the 45.5% national average, while in the East and Midwest only about a third of respondents did this kind of construction. Projecting to 2023, though, those differences were even slighter with the South topping out at 63.6% and the Midwest at 42.9%.

The average size of a metal wall panel project in 2022 was 22,856 square feet. That was 20.4% higher than in 2021 (18,986 square feet). Per company, the incidence of metal wall panel projects was greater than the incidence of metal roofing projects. In other words, our respondents were more like to do metal wall than metal roof. About half of the respondents did fewer than 10 metal roofs, but only 38.9% did fewer than 10 metal walls. And, on the top end, 13.9% of respondents did more than 50 metal walls compared to 2.7% who did more than 50 metal roofs.

Light-Gauge Steel Framing

Just over a quarter of our respondents expect to do an exterior light-gauge metal framing project but nearly 40% will do an interior one in 2023. The exterior projects is a decrease from the 31.8% who said they did one in 2022, but our respondents anticipate doing more interior light-gauge framing work when 34.8% did that kind of project 2022.

The average size for an exterior framing project was 7,973 square feet in 2022, which was nearly 50% larger than they report doing in 2021 (5,411 square feet.) None of the reporting companies anticipate doing than 25 projects in 2023, but more than 30% of them did so in 2022.

In a reversal of the trend for exterior framing projects, more than 25% of the respondents expect to do more than 25 projects in 2023. That’s up from 13% who did so in 2022.

Source URL: https://www.metalconstructionnews.com/articles/42nd-annual-contractor-survey/

---