Roofing, Siding, and Sheet Metal Work

SIC 1761

Companies in this industry

Industry report:

Special trade contractors primarily engaged in the installation of roofing, siding, and sheet metal work. Sheet metal work performed by plumbing, heating, and air-conditioning contractors in conjunction with the installation of plumbing, heating, and air-conditioning equipment are classified in SIC 1711: Plumbing, Heating, and Air-Conditioning.

Industry Snapshot

Construction services offered by the roofing, siding, and sheet metal industry include architectural sheet metal work; erection and repair of metal ceilings; copper smithing in connection with construction work; metal downspout installation; sheet metal duct work; metal gutter installation; roof spraying, painting, or coating; all roofing work, including repairs; siding installation; skylight installation; and tin smithing in connection with construction work.

Organization and Structure

The construction industry can be divided into three major divisions: general building contractors, heavy construction contractors, and special trade contractors, which include those who install roofing. General building contractors build residential, industrial, and commercial buildings, while heavy construction contractors build structures such as roads, highways, and bridges.

Special trade contractors usually focus on one trade and work under the direction of general contractors, architects, or property owners. Beyond completing their work to specification, special trade contractors have no responsibility for building the structure in its entirety.

Besides new installations or re-roofing, the market can be divided by type of roof, either low-slope or steep-slope. The low-slope market includes commercial and industrial buildings and some apartment houses. The steep-slope market is primarily residential.

Sometimes working in conjunction with architects, roofing contractors choose from a selection of materials that include thermoset single plies (e.g., EPDM, CSPE/Hypalon, PVC), built-up roofing (BUR) and fiberglass, and organic asphalt shingles. In the re-roofing industry, the contractor decides what type of roofing system to use and which manufacturer's product to install. With new installations, the architect usually decides which roof system to use, and, most of the time, the contractor still chooses the manufacturer.

Background and Development

For roofers who work predominantly on newly built homes, the state of the housing industry is crucial. The recession of the early 1990s hit the housing market and roofing contractors particularly hard. Renovation and repair increased slowly but steadily during the mid-1990s, reaching $69.5 billion by 1995. The recovery of the housing market led to significant increases in both re-roofing and new construction in the West (86.4 percent), with moderate increases in the Northeast (36.0 percent) and Midwest (16.8 percent). In the South, however, there was a 17.4 percent decline.

The state of the home remodeling industry also greatly affected roofing contractors, since a large percentage of their business derives from re-roofing projects. The residential repair and remodeling (R&R) market was once thought to be recession-proof. The recession of the early 1990s proved that theory wrong, but the market recovered and increased to about $113.5 billion by 1993.

Roofing contractors who worked in the remodeling sector stood to benefit from two major demographic factors. First, as baby boomers entered their high-income-producing years, they would be purchasing new or existing homes. Also, the U.S. housing stock became fairly old. Of the 100 million homes in the United States, nearly 60 percent were at least 22 years old.

Some roofing contractors rebounded from the recession with a booming roofing business. These contractors were re-roofing faulty plywood that was widely used in the eastern and southern United States in the 1980s. The chemically treated, fire-resistant roofing substance known as FRT deteriorated and lost strength when subjected to high heat and humidity, causing roofs to sag and leak. It was estimated that between 250,000 and 1 million roofs would need to be replaced.

According to the latest figures available from the U.S. Census Bureau, the U.S. roofing, siding, and sheet metal contracting industry comprises more than 30,000 companies and earns more than $24 billion in total revenues, the largest portion of which is generated by architectural sheet metal contractors, followed by carpentry contractors; heating, ventilation, and air-conditioning contractors; roofing contractors; siding contractors; and specialty sheet metal contractors.

Due to the economic downturn of the early years of the first decade of the 2000s, both the roofing and the siding industries felt the pinch of reduced commercial and industrial construction, despite the frenetic pace of residential construction. Based on estimates released by the Freedonia Group, demand for siding between 2002 and 2005 will grow less than 1 percent, reaching 109 million squares, worth $9.2 billion, in 2005. Fiber cement siding is expected to lead industry growth with 5 percent gains each year due to its increasing popularity over wood siding products. However, due to booming residential construction and remodeling, vinyl siding will likely remain the leading industry segment in terms of volume. Due to signs of recovery in the U.S. economy, the roofing industry expects increased sales in 2004, according to the National Roofing Contractors Association.

Despite the decrease in residential construction during 2007, the remodeling sector was projected to grow 8.2 percent to $173 billion with asphalt shingles and sheet metal roofing leading that growth. More importantly, industry watchers forecast demand for all roofing products to surpass $15 billion by 2010.

Elsewhere, global demand for siding was on target to rise 3.8 percent annually through 2010 to 5.1 billion square meters, valued at $69 billion. However, siding demand in the U.S. would remain relatively flat while the residential construction market recovers. Despite domestic spending in the nonresidential construction market, China is projected to surpass the U.S. and become the world leader in overall siding sales.

Current Conditions

According to industry statistics, there were an estimated 53,034 establishments engaged in the installation of roofing, siding, and sheet metal work in 2009, down from 63,174 companies in 2007. These firms had sales in 2009valued at $31,4, with industry-wide employment at 312,316 workers. States with the majority of contractors were centered in California, Florida, and Texas.

Roofing contractors dominated the industry with 54.7 percent in market share, valued at $19.62 billion in 2009, and employing 190,195 workers. There were roughly 6,747 firms (12.7 percent) specializing in sheet metal work, not elsewhere classified, that completed $3.47 billion worth of work. The 6,704 siding contractors accounted for 12.6 percent in market share or $2.23 billion in completed projects. There were about 4,977 contractors (9.4 percent) that installed gutters and downspouts with 18,543 employees contributing $1.24 billion toward the industry total. There were 1,554 contractors (2.9 percent) with their expertise focused on roof repair valued at $1.03 billion. Contractors installing skylights also fell within this industry with completed projects totaling $85.5 million. Additionally, there were specialty contractors that combined roofing and gutter work completing $440.2 million in contracts. Lastly, an estimated 236 firms specialized in architectural sheet metal work that completed $350.4 million in projects.

The roofing and siding industry was negatively affected by the downturn in the housing market during the late 2000s. New housing started fell each year between 2006 and 2009, declining from a record high of nearly 2.1 million new units in 2005 to a 50-year low of just 554,000 in 2009. In addition, the home improvement sector fell off as consumers reduced their spending during the economic recession. High asphalt prices kept the roofing industry ahead of the economy in 2007 and 2008, but the industry finally experienced a decline in 2009. According to companiesandmarkets.com, a research firm, the North American roofing industry was valued at $5.3 billion in 2008 but declined to $3.9 billion in 2009.

U.S. shipments of vinyl siding and soffit squares dipped sharply in the late 2000s as a result of the decline in the housing market as well as commercial and retail construction. According to the Vinyl Siding Institute, after reaching above 40 million squares(one square equals 100 square feet of siding, or enough to cover a 10-foot. x 10-foot. area) in 2005, shipments declined every year through 2009. Shipments, which totaled 31.56 million squares in 2007, declined to 24.39 millionsquares (ndash;22.7 percent) and 18.69 million squares (-23.3 percent) in 2008 and 2009, respectively.

The overall U.S. economy began to slowly recover during 2010. Although both siding and roofing saw periods of erratic activity, both segments of the industry looked to 2011 and beyond for actual recovery to come to their industries. The future, however, was expected to be promising as global demand for both siding and roofing was projected to increase once the economy righted itself.

Industry Leaders

The roofing industry typically consists of numerous small roofing firms and a few larger companies, which often operate additional construction and manufacturing businesses. Among the largest companies involved in the roofing, siding, and sheet metal industry, American Builders & Contractor Supply Co. (commonly known as ABC Supply), of Beloit, Wisconsin, increased its position in the industry when it purchased Bradco Supply Corp. of Avenel, New Jersey, one of largest distributors of building materials in the United States. The firm posted revenues of $3 billion in 2009 and employed 5,800.

Beacon Roofing Supply, Inc. of Peabody, Maine, was another significant firm within the industry. Beacon operated more than 175 branches in 36 states. The firm posted revenues of $1.61 billion and had 2,231 employees in 2009. Guardian Building Products Distribution, Inc. Privately owned Pacific Coast Building Products Inc. of Sacramento, California had roughly 3,800 employees.

Workforce

Workers in the sheet metal industry typically learn their trade through apprenticeship, including four or five years of hands-on training at job sites and at least 144 hours per year of classroom education. Others start as helpers, learning informally from experienced workers on the job and progressing gradually to more skilled tasks. They often study at vocational schools to supplement their practical experience.

On-the-job training is the most common way of entering the roofing industry, but some people learn the trade through a three-year apprenticeship that typically includes 144 hours of classroom education and at least 2,000 hours of hands-on training at job sites. Labor unions usually offer roofing and sheet metal work apprenticeship programs, often under the auspices of local union-management joint training committees.

According to the Occupational Outlook Handbook, roofers held approximately 96,550 jobs in 2008; self-employed roofers represented three out of every ten jobs and mainly specialized in residential work; some roofers were members of the United Union of Roofers, Waterproofers & Allied Workers; and average hourly earnings for roofers in May 2009 were $18.04.

Sheet metal workers held approximately 146,500 jobs in May 2009. Roughly 66 percent were employed in the construction industry, half of whom worked for plumbing, heating, and air-conditioning contractors. Most of the others worked for roofing and sheet metal contractors, and a few worked for other general or special trade contractors. Relatively few sheet metal workers were self-employed. Most were members of the Sheet Metal Workers' International Association. Average hourly earnings in 2009 were $21.58.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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