PPG

Construction Business Climate

by Linda Schmid

Shield Wall Media recently closed its mid-year Construction Business Climate Survey. Despite all the doom and gloom we hear on the news, the results are surprisingly good.

We divided respondents into three categories: Building Contractors, Roofing Contractors, and Building Material Dealers or Manufacturers.
We believe you’ll find the results of interest.

How does your year over year gross sales, including backlog (Q1) compare to 2021?

• 50% of roofers that are up compared to Q1 2021.

• 67% of respondents are up across all business types.

How does your overall Q1 profitability compare to 2021?

• 75% of roofers report profitability to be the same or better when compared to Q1 2021.

• 86% across all business types report profitability to be the same or better. (2021 was a record year for many!)

How does your units sold year over year, including backlog (Q1) compare to 2021?

• 63% of roofers report unit sales being the same or better than Q1 of last year.

• 76% are the same of better across all business types, while 24% are down slightly across all business types.

How will your overall profitability in Q2 compare to 2021? (best guess)

• 75% of roofers estimate profitability will be the same or better.

• 90% of respondents (across all categories) are the same or more profitable than they were in Q2 2021.

What challenge is exerting the greatest impact on your business?

#1  Challenge: 

• Shortages of workers is the #1 challenge for Building Contractors and Dealers/Distributors/Manufacturers. roofing contractors. It was a tie between material shortages and material costs.

The #1 challenge for Roofing Contractor: It was a tie between material shortages and material costs.

How will your Q2 year over year gross sales, including backlog compare to 2021? (best guess)

•75% of Roofing Contractors estimate Q2 sales will be the same or better than 2021. 81% across all sectors report gross sales will be the same or better.

+ Comparing the numbers for Q1, Q2 and 2022 as a whole (best guess) sentiment drops slightly for Q2 and slightly more for the year as a whole. 

Sentiment seems to be declining, but is still generally positive. 

2022 General Outlook

38% of Roofing Contractors estimate that 2022 will close better than 2021.

 As Suppliers See It…

In general, commercial construction remains busy and has shown some incredible resilience to the dynamics of the market of the past two years. We have witnessed some of the most challenging times our industry has faced and we expect many of those challenges to continue, including first and foremost finding and recruiting great people into all of our businesses and preparing ourselves for future expected growth. The pendulum will swing back and forth, and we will continue to be challenged to respond to changes in the marketplace. 

Mike Weis, Vice President Sales & Marketing, PAC-CLAD | Petersen 

Our clients tell us that professional metal roofing takeoff software has been a critical tool in helping them manage their material costs effectively. By reducing wastage and allocating labor efficiently, they have been able to keep their margins up and avoid shortages. We’re proud to help our clients stay ahead of the curve and continue providing great quality products and services. 

Ray Smith, Managing Director, AppliCad Software 

The climate of the Construction Industry has seen unprecedented growth despite the supply issues that dealers, distributors, and manufacturers have had to overcome. The import supply chain has been greatly affected by the rising costs of containers, delays in deliveries and even partial shipments, which has left the domestic manufacturers to fill the needs of the increased growth despite dealing with the rising costs of raw materials, transportation, and labor during this unique period. The consensus in many sectors is: How long can we sustain this unparalleled growth before the shortages in the supply chain impact the Construction Industry as a whole? 

Mike Green, Western Canadian Sales Manager, Leland Industries 

S-5! distributor orders are up significantly over 2021. However, shipments are flat due to backlogs caused by supply chain issues and raw material availability. Our advantage is our distribution model. S-5! products are on shelves nationwide–always. 

Labor shortage is rarely a problem. We have a reputation in the industry for doing things The Right WayTM. We are a privately held company with a comfortable working environment, and values that attract great talent and retention. 

Rob Haddock, Founder and CEO, S-5! 

The construction and renovation markets are growing and changing at a pace we have rarely seen before. Factors such as inflation, rising gas prices, and labor issues normally lead to a cool down within the industry. We are experiencing quite the opposite however, with an increase in demand and a strong desire for innovation within our markets despite the somewhat unstable economic environment. 

Scott Lowe, Sales Manager, ProVia 

The metal roof industry is going to thrive through a recession. Homeowners will continue to invest their money in a product that’s going to take them to the grave. The labor shortage isn’t getting any better. We’re addressing the increasing backlog and labor shortage with labor-saving technology and devices. There’s a big learning curve coming because newer workers don’t know anything, but they have to be efficient on day one. They need safety equipment that thinks for them. That’s why we developed the Ridgeline Safety System – to keep workers safe so they can do the job from the start.

Todd Meinhold, Ridgeline Safety System 

Finding and retaining employees is the key to success in in any climate, especially now. We, here at Levi’s Building Components believe company culture matters, and it is proving to be a valuable part of our formula for success. We are living our core values of Integrity, Quality, Service, Collaboration and Growth. To our employees and customers it is known at the Levi’s Experience.

Mike O’Hara National Sales Manager, Levi’s Building Components 

What a year so far! The word which comes to mind is “Adaption.” While supply chain and upward cost pressures continue, we as an industry have learned to adapt. This has served us well and will continue to moving forward. It is a testament to the quality people in our industry. 

Generally I am seeing business remain strong. Some slow down may be occurring but this can be expected after the unprecedented past couple of years. What we may see as a slow down can to some degree be attributed to a normalization of an unsustainable growth pattern. 

I remain very positive about the metal roofing and post frame building industry where I live. 

Randy L. Chaffee, Source One Marketing, LLC 

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