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Roofing in North America: Where Do We Stand?

state of the industry

2022 has been quite a unique year to navigate for commercial roofers and their customers. As an industry, we started with massive backlogs caused by labor and material shortages due to the COVID-19 outbreaks. Roofing contractors were placing orders in fear of material shortages, driving material sales up 300% while the market was only experiencing 15% growth. Customers were faced with extensive lead times on roofing projects and often had to focus their strategy on repairs or coatings.

So, where do we stand now? A recent Quarterly Market Index Survey1 for reroofing (2022 Q2) by a coalition of industry trade associations, including manufacturers, contractors and consultants, shows a positive trend overall. 

Across all regions of the US and the majority of Canadian provinces, respondents reported general improvement in low-slope reroofing opportunities compared to 2021 Q2. However, there was an indication of some uncertainty in the steep-slope roofing market. Most of this feedback came from roofing contractors (80%) and some from roofing consultants (20%). Let's take a glance at those numbers:

Customer Inquiries:

  • 40% of survey participants reported an increase in customer inquiries.
  • 31% of participants indicated the volume of customer requests did not change
  • 29% of respondents noticed a decline in customer inquiries

Project Contracts:

  • 43% of participants indicated an increase in project contracts
  • 34% reported no change
  • 24% confirmed a decline  

How optimistic are the roofing industry professionals about the future? The responders were presented with a 0 to 100 grading scale to determine their outlook and expectations of what's to come. A score of 50 or above indicates optimism and growth, while 0-50 scores indicate a pessimistic view of the future. Let's look at those scores:

Customer Inquiries Index Score:

  • 61.6 for the low-slope reroofing market
  • 41.2 for the steep-slope
  • 50 for a blended low+steep slope

Project Contracts Index Score:

  • 66 for the low-slope reroofing market
  • 50 for the steep-slope
  • 51 for a blended low+steep slope

So it looks like Q2 has shown an improvement for the roofing industry and the backlogs are starting to ease. But we are not out of the woods yet. The costs of roofing projects are still rising, and this could be our most expensive year yet. Coldwell Banker Richard Ellis (CBRE), the world's largest real estate services and investment firm, has predicted a 14% YOY increase in US construction costs by the end of 20222. The financial factors driving that trend include inflation, labor shortages, supply chain issues, ongoing Covid-19 outbreaks and Russia's invasion of Ukraine. It is the most significant jump since 2007, when CBRE initiated the cost forecasts. The firm predicts the material deficit, extensive material delivery delays, labor shortages and scarcity of components will continue.

Nicolas McNamara, the Director of Cost Consultancy for CBRE, stated"The construction industry thrives on predictability, but we continue to grapple this year with numerous challenges and volatility, making estimating and managing costs more difficult. Labor shortages and wage pressure -- combined with supply chain disruption -- have contributed to a sharp increase in costs. But demand for new projects remains strong. Understanding the levers moving construction costs, which are analyzed in this report, is key to navigating this challenging environment."

As a roofing customer, how can you maneuver through the uncertainty of this year and beyond? By being proactive:

  • Educate yourself about the condition of your existing roof through routine roof inspections and address all issues as soon as possible.
  • Schedule roof inspections after major inclement weather events to catch and repair any damage early.
  • Look into maintenance plans to extend the life of your roof.
  • Don't postpone roof repairs to prevent minor damage from growing into an expensive roofing job later.
  • If you are considering reroofing, look into the contractor's ability to deliver. Are they financially stable? Will the warranty cover both materials and labor? Do they have established partnerships with material manufacturers? These factors may drastically affect the overall cost of your project.

CentiMark is here to help you navigate the current roofing climate. We are a family business with over 50 years in commercial roofing, 95 locations from coast to coast and a large talent pool of more than 3500 associates. We focus on educating customers about their roofs to help them make the best decisions for their facility. Our highly trained crews and strong partnerships with manufacturers of roofing materials allow us to deliver consistent results and expertise every time, everywhere. Whether you are a small business or a nationwide corporation - we are here for all your roofing needs.

 

 

References: 

1. "Trade Association Coalition Announces Q2 Findings from Market Index Survey for Reroofing,"  

National Roofing Contractors Association, Aug 5, 2022

https://www.nrca.net/press-room/press-release-archive/trade-association-announces-reroofing-market-index-survey-q2-findings

2. "Construction Costs Expected to Post Largest Increase in Years Due to Pressures From Both Supply and Demand Sides"

CBRE, August 24, 2022

https://www.cbre.com/press-releases/construction-costs-expected-to-post-largest-increase-in-years

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