Quarterly Market Index for Reroofing Survey Signals Strong Start to 2022

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June 3, 2022

The Market Index for Reroofing Survey for the first quarter of 2022 suggests that the US-Canadian reroofing industry remains on the upward trajectory established in 2021.

The survey—an industry-wide effort to collect information about the reroofing market—is spearheaded by a coalition of trade associations: IIBEC, Asphalt Roofing Manufacturers Association, Chemical Fabric and Film Association, EPDM Roofing Association, Metal Construction Association, National Roofing Contractors Association, National Women in Roofing, Polyisocyanurate Insulation Manufacturers Association, Roof Coatings Manufacturers Association, and Single Ply Roofing Industry.

Participant Profile

Approximately 200 industry professionals participated in this survey. Most (90%) were contractors; the rest were consultants. By comparison, contractors comprised 58% and 73% of respondents, respectively, in the Q3 and Q4 2021 surveys.

About half (49%) primarily worked in the low-slope industry; the rest primarily worked in either steep-slope (15%) or a combination of low- and steep slope (37%) reroofing. This breakdown is similar to the breakdown for Q4 2021: 47% for primarily low-slope roofing, 12% for primarily steep-slope roofing, and 41% for the blend.

Every US region and Canadian province was represented in the Q1 2022 survey, with the largest proportion of respondents (23%) being from the US South Atlantic region (Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia, and Washington, D.C.).

When participants were asked about their annual gross revenue, the most common responses were US$1 million to US5 million (30%) and US$5 million to US$10 million (27%). Other answers were less than US$1 million (10%), US$10 million to US$25 million (18%), US$25 million to US$50 million (6%), US$50 million to US$100 million (4%), and more than US$100 million (1%). About 6% of respondents declined to answer this question.

Industry-wide Business Activity Trends

Each time the survey is conducted, respondents are asked to share data on three aspects of their business activity: customer inquiries, project contracts, and project backlogs.

With regard to customer inquiries and project contracts, the trends for the first quarter of 2022 resemble the trends for the final quarter of 2021 (Fig. 1 and 2). In the Q1 survey for 2022, the data indicate that compared with the first quarter of 2021, most respondents were either experiencing growth in both inquiries and contracts or achieving the same levels of business. Inquiries declined for 20% of respondents, and 22% of respondents reported that their volume of contracts in Q1 2022 was lower than in Q1 2021.

Project backlog trends suggest that the proportion of companies with no backlogs in April 2022 (22%) was somewhat larger than in April 2021 (18%). However, the percentage of companies with substantial backlogs (more than 6 months) in April 2022 (13%) is nearly double the percentage from one year before (7%). See Fig. 3 for a snapshot of project backlogs by industry sector for April 2022.

Business Sector Insights

The survey analysts produced two indices, one for customer inquiries and one for project contracts, to evaluate expansion/contraction in the reroofing industry as a whole, as well as in the primarily low-slope, primarily steep-slope, and blended service sectors (Fig. 4 and 5).

To create the indices, analysts compared data from one survey with data from the same quarter from the previous year. An index score equals the percentage of respondents who reported increased business plus one-half the percentage of respondents who reported no change, with the total multiplied by 100. A score equal to or greater than 50 suggests expansion (optimism).

The indices demonstrate that the reroofing industry overall and all three sectors are experiencing expansion and optimism. Notably, in this quarter, the primarily low-slope sector achieved its highest-recorded index scores for customer inquiries (69.6) and project contracts (68.4).

In contrast, while index scores for the primarily steep-slope industry continue to demonstrate optimism, they have been declining for the past year. Index scores for businesses that offer both low-slope and high-slope reroofing for Q1 2021 were a few points lower than in Q4 2021.

Figure 1. Customer inquiries vs. same quarter previous year: trended comparison.

Figure 2. Project contracts vs. same quarter previous year: trended comparison.

Figure 3. Project backlog for April 2022.

Figure 4. Customer inquiries index: Comparison for first quarter of 2022 and fourth quarter of 2021.

Figure 5. Project contracts index: Comparison for first quarter of 2022 and fourth quarter of 2021.