December 01, 2007

The Performance of Remodeling Contractors in an Era of Industry Growth and Specialization

Abbe Will, Kermit Baker

W07-8: Professional remodeling contractors have not experienced the same flurry of consolidation as in the national homebuilding industry in recent years. The home improvement industry remains fragmented with many small contractors that focus on local markets and are highly susceptible to failure with each new cycle of remodeling activity. This paper analyzes the structure, performance and survivorship trends of professional contractors serving the remodeling industry using data from the U.S. Census Bureau’s Economic Census of the construction sector and Business Information Tracking Series, as well as Qualified Remodeler magazine’s Top 500 Remodelers. While remodelers are finding efficiencies in becoming more specialized businesses, there is little evidence that specialization leads to higher or less volatile growth. In fact, more diversified firms, such as full-service remodelers may be better equipped to handle the cyclical nature of the industry…

Category: Working Papers

Read More About: Housing Markets & Conditions, Remodeling