Painting and Paper Hanging

SIC 1721

Companies in this industry

Industry report:

This classification includes special trade contractors primarily engaged in painting and paper hanging. Special trade contractors primarily engaged in roof painting are classified in SIC 1761: Roofing, Siding, and Sheet Metal Work.

Painting and paper hanging is a diverse, highly fragmented industry. In 2009, there were nearly 198,750,000 individuals working in this industry, according to the U.S. Bureau of Labor Statistics. Of these, 136,850 workers were classified as construction and maintenance painters, 3,410 workers were classified as paper hangers, and 8,950 workers were classified as helpers and assistants.

The painting and paper hanging industry was worth an estimated $18.4 billion in revenues in 2009, according to industry statistics. Nearly all of this amount was for construction work. Most of the establishments are small, independent contracting companies. In fact, nearly two-thirds of the industry's 81,433 firms (51,795; 63.6 percent) were sole proprietorships in 2009. In addition, 85.6 percent of firms employed less than five workers, and nearly 98 percent of firms had fewer than 25 employees. However, several large corporations were also active in the industry. In 2009, leading companies included privately owned Brock Enterprises, of Beaumont, Texas; Keenan, Hopkins, Suder & Stowell Contractors, Inc., of Anaheim, California; National Coatings, Inc., of Traverse City, Michigan; and Claremont Painting & Decorating Co Inc., of Fair Hills, New Jersey.

In most regions of the United States, individual contractors and contracting companies complete primarily industrial and residential contracts. Contractors involved in painting and paper hanging are often represented by one of several industry groups or associations, such as the Painting and Decorating Contractors of America.

The painting and paper hanging industry is closely linked with overall trends in the construction industry, since the painting of new and remodeled buildings account for most of the industry's business, which accounted for sustained growth in the early 2000s. Despite an economic slowdown in the United States, historically low interest rates kept housing starts growing steadily through the early 2000s. The number of single-family housing starts reached 1.84 million in 2003, their highest level since 1978.

The type of work done by painting and paper hanging firms varies by the type of construction being done. For example, new, detached, single-family houses accounted for more than one-quarter of all industry work. New office buildings were the next largest category for work completed, followed by industrial buildings, warehouses, and commercial buildings. While the painting and paper hanging industry benefited from the record level of housing starts in the early 2000s, it also was affected by reduced commercial and industrial construction.

A shortage of skilled labor in the late 1990s and early 2000s meant that competition was intense among painting and paper hanging firms for skilled labor. Increased wage expenses were another affect of the shortage, which also created quality problems, increased prices, and stretched schedules for many firms.

During 2004 and 2005, housing starts boosted the painting and paper hanging industry with 1.95 million starts and 2.06 million starts, respectively. However, by 2006, residential construction was beginning a decline as housing starts plummeted to 1.8 million, and dropped to 1.35 million in 2007. Despite the 25 percent decline in new residential construction, the remodeling sector fell only 1 percent in 2007 to $226.4 billion, with additions and alterations accounting for 76 percent of total remodeling expenditures at $171.6 billion.

In 2007, multi-family construction also began to decline, dropping 11.7 percent, with 198,000 unit starts during the first eight months compared to 224,300 units during the same period in 2006, suggesting further softening for the painting and paper hanging contractors following the weakened economy and financial crisis. According to McGraw Hill Construction Vice-President of Economic Affairs Robert A. Murray, in Engineering News-Record in September 2008, the financial chaos of mid-2000s that had been caused by the downfall of the subprime market was shaping the single-family housing sector. By 2007, the multi-family housing market was also affected by the U.S. economic downturn. In addition, industries that had been strong began to feel the impact of the declining U.S. economy, leading to speculation that the sustained growth of the painting and paper hanging industry in the early twenty-first century was likely to be reversed.

Current Conditions

An estimated 81,433 establishments were primarily engaged in painting and paper hanging, which generated $18.7 billion in 2009. Painting and paper hanging special trade contractors accounted for 72.5 percent in market share valued at $9.07 billion. The residential painting sector, including exterior and interior painting, held 13.9 percent of the market share with sales of $3.19 billion. Industrial painting, including aircraft, bridge, ship, and pavement marking painting, contractors held just 2.2 percent of the market in terms of the number of firms, but generated $2.18 billion in revenues. Finally, wallcovering contractors, including residential commercial contractors, accounted for 2.3 percent of the market and generated $386.1 million.

In 2008 the United States was hit with a banking crisis as a economic recession caused millions of Americans to default on their mortgages. In 2009 the number of new housing starts plummeted to a 50-year old of 554,000 units. In addition, as the new housing market declined, so did the remodeling market. According to a report by the National Association for Home Builders in the first quarter of 2010, the market index for remodeling ran below 50 since the last quarter of 2005. Any number below 50 indicates that remodelers believe that economic conditions are getting worse rather than better for the home improvement business. "We're hearing many remodelers have laid off workers because they have no jobs coming in and are struggling to survive," noted NAHB Remodelers Chairman Donna Shirey. "Remodelers are pounding the pavement to find work and stay open, including taking on smaller jobs and competing with unqualified contractors."

Although the economy began to show signs of recovery during 2010, the housing market remained stagnant. The home improvement index did, however, show some indication of renewed hope by contractors that the worst of the economic times was over and improved business conditions were on the horizon.

Industry wide, workers earned an average of $18.69 per hour in May 2009, according to the Bureau of Labor Statistics. Painters earned an average hourly wage of $17.48. Paperhangers earned an average of $20.60 per hour. Helpers earned an average of $11.37 per hour.

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