2023 Commercial Roofing Trends Report | Roofing Contractor

Many businesses — even entire industries — felt the impact of a strained economy punctuated by record inflation, spiking interest rates and overarching fears of a national recession in 2023. Still, commercial roofing contractors didn’t appear to be among them. Both anecdotally and undergirded empirically by data compiled late this year, commercial roofers are confident about their chances for success in 2024 and beyond.

“Business is gangbusters right now,” said Dave Reginelli, president and CEO of Tecta America. The international commercial roofing contractor led RC’s 2023 Top 100 List with a record $1.2 billion in revenue last year. “Supply chains have loosened, up we’re hitting on all cylinders, and our backlog isn’t at record levels, but it’s very close.”

Like Tecta, commercial roofers, influenced by the material shortages and price volatility that followed the global slowdown brought by COVID-19, essentially saw conditions improve by the third quarter in most markets.

While other negative factors threatened the overall economy, commercial roofing stayed resilient and on par with the broader construction and repair/restoration fields. As those segments returned to full swing, opportunities continued for roofing contractors that had the capacity — and crew — to keep pace in a new world of work. Some pundits predict commercial roofing itself could exceed $10.3 billion in revenue domestically next year.

Yet, challenges remain, particularly in the aforementioned "pinch point" of labor availability, where commercial roofers are getting bold in their continuous hunt for skilled employees to help clear backlogs while building a pipeline of jobs for the future.

Once again, with the help of experts from Clear Seas Research — the survey and research arm of RC’s parent company, BNP Media — roofing contractors nationwide told us about the year they had and expectations for the future with our annual roofing survey.

The series of questions designed and circulated last fall helped parce the challenges encountered during this year into perspective while pinpointing trends that may help lead the way to success in 2024. Respondents consisted of roofing contractors that subscribe to RC and are registered on roofingcontractor.com.

The commercial roofing contractors who responded represent companies that generate more than 50% of overall annual revenue from commercial projects — whether that be in roof replacement, repair or new construction. The majority were men, at 69%, and nearly 35% were between ages 40-49, the largest age group of respondents this year.

The South led the geographic breakdown at 38%, followed by the Midwest at 31%, the West at 18%, and the Northeast at 13%. Roughly four-in-10 respondents identified themselves as corporate/executive management, and another 20% identified themselves as general managers.

Survey results show growth in commercial sales of metal roofing systems; the expectation of metal accessories use indicates growth in 2024 compared to data from the previous two years.

Roofing sales in the commercial space continued to surge this year as the overall economy picked up steam. Roughly three out of four survey respondents indicated sales increased or remained flat in 2023, and 26% said they projected sales to greatly increase year-over-year.

About the same number of contractors, 74%, said they expected annual sales volume to increase next year, and 85% said sales should improve over the next three years.

Nearly 10% said they expected to see a decrease in sales volume this year, including 4% anticipating sales to decrease significantly. About 7% anticipate further drops in 2024 and over the next three years. Those numbers remain relatively consistent with results from previous surveys.

Of those displaying optimism, the majority, 53%, said revenues would just slightly increase in 2024, and even more, 68%, expected slight increases through 2026. Geographic headquarters appeared to have little influence in the reporting: in the regional breakout, more than half of all contractors spread across the Northeast, Midwest, South and West anticipated sales growth at year’s end.

At least 60% or more contractors across the same territories expected sales increases in 2024, extending throughout the next three years. Roughly 73% of contractors in the Midwest and West said sales volume would grow through 2026.

If there were complaints from contractors displeased with sales this year compared to last, they likely weren’t in single-ply roofing. The go-to commercial installation system again dominated the survey field, with 81% of respondents using it. Single-ply also accounted for the highest percentage of revenue generated by commercial roofers in the survey at 36%.

The data showed that 41% of contractors installing TPO systems drove single-ply sales, followed by EPDM at 30%, PVC at 17%, and KEE at 10%. On average, nearly half of low-slope asphalt sales, 48%, are comprised of modified bitumen-SBS, with modified bitumen-APP at 27% and built-up roofing not far behind at 25%.

Nearly three-quarters of respondents, 71%, said they use low-slope asphalt, accounting for roughly 10% of revenue; similar figures involving contractors using single-ply roofing indicated they expect commercial sales to increase in 2024.

Coatings use among respondents, at 59%, dipped slightly from last year, but polymer-synthetic roofs, 41%, and slate roofs, 37%, demonstrated double-digit gains in popularity among commercial roofers represented in the data. Coatings sales among contractors already using them remain strong. More than half, 54%, said sales boosted in 2023, and 60% expected sales to increase next year.

Results show growth in commercial sales of metal roofing systems; the expectation of metal accessories use also indicates anticipated growth in 2024 compared to data from the previous two years. Growth in both slate and solar is more bearish, with expected declines in each category.

About 79% of respondents said they install metal roofs, accounting for 13% of their overall revenue.

Breaking it down by product, architectural standing seam projects accounted for 40% of commercial sales, while roof edge and gutters were not far behind at 28%. Structural standing seam projects were next, at 23%, followed last by metal architectural shingles and tile.

On the sustainability side, nearly 72% of contractors involved in solar said sales increased in 2023. Only half, however, said they expected solar sales to increase in 2024. About one-third of respondents, 33%, said garden roofing sales should increase next year, as did a similar number of contractors, 32%, that use wood shake on some installations.

Survey data indicates despite an overall increase in popularity, only 48% of commercial contractors expect sales to increase in 2024.

Along with all the positive sales indicators, the survey data reflects some significant challenges contractors will have to overcome to be successful in 2024. It starts with perceptions of the overall U.S. economy, which has shown consistent job growth but continues to flail due to inflation and record-high interest rates. Just more than half of commercial roofers, 51%, cited the "current economy/inflation" as a chief concern this year. That number jumped from 38% in the 2022 survey and grew for the second consecutive year.

Keeping pace — also at 51% — were increased building material costs and a lack of qualified workers. In all, more than 40% of total survey respondents said current economic conditions, material costs and workforce were a concern, followed by more than 37% worried about lowball pricing.

Supply chain problems and material shortages rounded out the top five at 22% among commercial roofers. That represents a significant drop from last year’s survey results, where nearly three-quarters, 71%, noted increased building material costs and more than half, 56%, said supply shortages were top of mind heading into 2023.

While there exists concern nationally about reduced occupancy rates in retail and commercial spaces, fears about people’s changing work habits in a post-pandemic world are not impacting demand for commercial roofing work.

“It doesn’t seem that the low occupancy is affecting demand at this juncture because the insurance carrier is still requiring inspections on roofs whether the building is occupied or not,” said Kyle Johnson, sales director of Florida-based R/J Group Inc.

However, Johnson has heard from building owners who said they cannot secure ancillary insurance products like a wind rider or coverage for wind events unless the building is occupied or has a lessee in place.

Despite more offices closing as people work from home, anecdotal evidence suggests commercial roofing inspections and business are still high.

Workers aren’t just becoming more challenging to find, but they’re also costing more, data shows. Roughly 70% of respondents reported higher labor costs since January, with an average increase of about 17% among commercial roofers.

The majority of work, 60%, is completed by full-time employees, while 31% of commercial roofers rely on subcontractors; part-timers round out the remaining work.

Some roofing contractors, however, are getting creative and are taking a long-term approach to building a workforce from within. California-based Madsen Roofing & Waterproofing recently purchased a separate building intended for dual uses — warehousing materials and multi-faceted training. One side of the facility operates like a classroom with flexible seating and also has an open space that’s ideal for hands-on demonstrations and practice.

The idea is to pair less-experienced or less-skilled crewmembers with a foreman in an environment where they can practice proficiency with certain materials they’ll use on the job site.

“We’ve had some really good success with that, and the crew members, they love it,” said Madsen Roofing CEO Christian Madsen. “They feel like we’re investing in them and their future, and it gives them the ability to earn higher wages.”

Survey data showed more than half of respondents rely on formal, in-house training, as well as manufacturer training. Another 53% use training provided by industry associations, and 35% use apprenticeships to build up their crews.

With supply-chain issues fading from view, the sales data from this year’s survey shows that commercial roofing contractors are pushing hard to maintain a pipeline of jobs, justifying a high level of optimism when it comes to demand. Still, the industry’s workforce woes continue and seem exacerbated by a post-pandemic "new reality" economy. Roofers said it is impacting scheduling, but that’s not always a negative, some pointed out.

One positive aspect for commercial contractors dealing with an absence of readily available labor has been that companies focusing on sales while sustaining an available backlog can extend roofing demand further into the future.

Ensuring steady work can help stabilize budgets and planning, but survey data shows it’s becoming just as important as safety to commercial roofers in terms of employee retention.

Roofing contractors like the R/J Group are ready to capitalize on that strategy by investing in growth opportunities and customer care. Johnson said they’ve already added a national accounts manager and a dedicated service manager who will act as a roofing “liaison” to help customers navigate through roofing issues — whether aiding in budget projections, technical details or general inquiries.

“There is a ton of optimism in the industry for the foreseeable future pertaining to demand,” Johnson explained. “Commercial roofing is a niche market, and few companies do commercial roofing with high quality, and we’re projecting the demand for such services to be quite strong.”

Getting more competent workers into the field is a must for contractors to capitalize. The majority of companies represented in the survey indicate employee referrals are the most common way to identify and recruit roofing job candidates.

About 70% of commercial roofers use online job posts or social media to recruit. The other top strategies for employee retention include incentive pay and bonuses, the ability to ensure future work, and prioritizing safety.

Commercial roofing contractors are also driving the surge in estimating, enterprise and accounting software flooding the industry. They will need all these tools moving forward as the commercial roofing market puts a premium on efficiency and stays cautious about costs.

Editor’s Note: Information contained within this article comes from Clear Seas Research. 2023 Roofing Contractor Commercial Roofing Report. Oct. 2023.

Clear Seas Research is a full service, B-to-B market research company focused on making the complex clear. Custom research solutions include brand positioning, new product development, customer experiences and marketing effectiveness solutions. Clear Seas offers a broad portfolio of primary, syndicated research reports and powers the leading B-to-B panel for corporate researchers, myCLEARopinion Panel, in the architecture, engineering, construction, food, beverage, manufacturing, packaging and security industries. Learn more at clearseasresearch.com.

Art Aisner is Editor-in-Chief of Roofing Contractor and Roofing Supply Pro. He spent the bulk of his career as a multi-media journalist for newspapers and television stations before joining the RC team in 2015. He is the driving force behind the publication’s content development, editorial strategy and other initiatives that serve growing audiences in the roofing space.