Brad Bush, Senior Vice President, HUB International
The US roofing industry can expect to see continued growth in 2023 and further into the future. But even a healthy backlog of work won’t be sufficient to offset the forces keeping the squeeze on profit margins. Protecting the bottom line and building resilience for the long-term will be the challenge. Here are the forces facing the roofing industry in 2023.
Weathering the Squeeze
The predictable growth of the past – about 2.2 percent annually since 2017 – can be counted on to drive the roofing business into the future, as the size of the market holds steady at $56 billion. The majority of companies are small to mid-sized with a local or regional footprint and replacement services comprise 94 percent of roofing projects. As buildings age, the potential for work expands. However, the economic pressures in 2023 abound. Not only are workers hard to come by, but they’re more expensive, too – with labor costs easily up 10 percent in recent years. There continue to be shortages of roofing insulation and materials, although supplies are stabilizing from the long lead times in 2022.
Inflation is having an across-the-board impact on costs. Adding to the pain are ongoing boosts in interest rates, making revolving credit lines and other types of financing more expensive. All combined, roofers will have to manage more strategically in the face of these
risks as their profit margins are diminished. Read more.