Market Survey: The Road Ahead

The Western Roofing Market is Looking Good for 2019

by Marc Dodson, editor


New roofing projects are on the rise and there are more reroofing jobs right now than any year during the last decade. Yes, the road ahead for the Western roofing contractor is looking very good indeed. Our annual survey of roofing contractors resulted in positive comments about the state of the Western roofing industry. According to our readers, the outlook for the 2019 Western roofing market is very good. As it has for the last few years, the construction economy continues to rise in the West and Western roofing contractors are reaping the benefits. With resale prices of homes increasing and mortgage rates stabilizing, the number of new building permits are on the rise.

         Architects are also reporting an increased amount of work on the boards, and more roofing jobs and construction projects are being started. Furthermore, homeowners are more willing to spend some cash to reroof their home and protect their investment. All Western roofing contractors, whether they specialize in new construction, reroofing, or recover, should see quite an upswing in their business during the coming year.

         A greater number of the comments we received from our annual survey were more positive than negative. Additionally, manufacturers were very optimistic about the construction economy for the coming year and several stated that the past few years have been the best in the past decade.

The vast majority of Western roofing contractors expressed that they were busy during the past year and expected the increase in business to continue. More high-end residential projects are being built. While new construction is on the rise, as always, reroofing, recover, roof maintenance, and service will still take the lion’s share of the market in both the residential and commercial sectors.

The single biggest problem mentioned by many roofing contractors continues to be that they can’t find enough trained workers, or workers willing to be trained in the art of roof application. This ongoing dilemma is limiting the amount and types of jobs contractors can accept and, unfortunately, it appears this will continue for the foreseeable future.

Rooftop Comments

Here’s what some Western roofing contractors have to say about the industry for the coming year.

Bill Baley, CI Services, Mission Viejo, California, said, “I think our business should show some modest growth in 2019. Our business mix should remain the same but with more emphasis on repair and maintenance this coming year. We’ve always been a strong service company, but the renovation of existing roof systems is very much in the minds of property managers and owners these days. I don’t think the economy in Southern California will be any better than everyone else’s. I believe everyone sees a recession on the horizon but are unsure of when. We’ll have to wait and see how that affects the 2019 revenue levels.

“I believe our industry is getting better in terms of roof systems, safety, and marketing, but we continue in the Southwest to struggle for willing and able laborers. In California, we will always have troubling state legislature issues, but labor has become the most immediate concern. The shortage of skilled labor is the single biggest reason for the root of our struggles. Solving that problem could radically change things for the better for all contractor.”

Leo Ibarra, Blue’s Roofing, Milpitas, California, and senior vice president of the WSRCA, said, “We anticipate business climbing in 2019. We’ll be using the same products and materials. Keep doing what you are good at. I think the economy will continue to grow and we need to take advantage of the good times.”

Pete Schmautz, Star Roofing, Phoenix, Arizona, noted, “Business will be up, but only to the capacity of our current work force. We will be using primarily the same products in 2019 that we have been using and we continue to see a rise in the single-ply market and a decline in the BUR and modified market. We’ll continue to strive towards reroofing, as opposed to the new construction market. We anticipate the metro Phoenix market will be on par or slightly ahead of the rest of the West. It’s a continuous struggle to find additional qualified installers.”

Brad Baker, Professional Roofing, Bellevue, Idaho, stated, “Even with employee shortages, 2018 was a record year for us. How did we do it? We paid boatloads of overtime to all who would work. Overtime is a good thing for about two months and then after that, they are too tired to work any more. When that happens, you have to beg and be really nice, otherwise the answer is no.

“Anybody that wants to be a roofing contractor is in the business right now because the customer just wants a roof this year, not next year, and price is not really an issue as long as you can get the roof done now not later. It’s hard to tell where President Trump and the economy are going next year, but it might not matter because half of our work next year is from recently deferred work. In a nutshell, it was a wonderful, stressful year. Employee’s pockets are full and owners should be happy.”

Ken Dillon, D&D Roofing & Sheet Metal, Sparks, Nevada, stated, “Our business revenues have remained relatively flat for 2018. We expect them to be up slightly for 2019, based on a strong backlog. Our commercial new sales are down for 2018 with the conclusion of Tesla’s Gigafactory, but we filled in nicely with increased commercial replacements. New commercial construction looks like it may tick up for 2019. Residential sales remain pretty steady from last year to this year, and should hold for next year. The northern Nevada/California economy is holding, with slight signs of softening. We had quite an increase in built-up roofing specifications over the last two years, but we have settled back to TPO. There has been a noticeable shift to thicker sheets in the single-ply market. With all of us having experienced some substantial downturns in the not-so-distant past, we are keeping an eye on the horizon.”

Steve Duchene, Bigham-Taylor Roofing, Hayward, California, said, “Spending growth in the non-residential roofing market will, without much argument, mirror the AIA’s Consensus Construction Forecast which includes predictions of a 4% increase in 2019 over the 4% 2018 increases.

“The recent Vistage® CEO Survey found 64% of construction executives planned to increase hiring, 72% expected higher revenues, and 31% expected an improved overall United States economy. More specific, however, is the recent Cushman & Wakefield report that expressed a less sunny outlook for commercial office and warehouse construction in 2019.

“No matter which view, quantitative or qualitative, the Northern California and Nevada regional commercial roof contractor must solve the issues of employee retention and new hiring. Forbes® Magazine pointed out in a 2018 article titled Construction Labor Shortage Creates Increasingly Lucrative Career Paths that college is not for everyone, student loan debt is a national problem, and labor shortages in the construction industry have forced employers to increase wages. This is not a news flash for the union or non-union roofing contractors in Northern California and Nevada. Solving the labor shortage issue is our first priority.”

Dennis Conway, Commercial Roofers, Las Vegas, Nevada, noted, “The industry is very healthy. A major area of concern for all roofing contractors is being able to find qualified roofing mechanics.”

Frank Lawson, Jr., The Lawson Roofing Company, San Francisco, California, and former WSRCA president and former NRCA president, noted, “Business is still very good and the construction economy in the San Francisco Bay Area is still very strong. The technology industry is still driving the economy, which means new multi-living housing projects are being built. We see built-up roofing continue to decline in market share and single-ply products taking over the majority of the market. The labor shortage continues to be a major problem. Our industry needs to do a better job of recruiting a younger workforce as we don’t see an influx of a youthful workforce coming into the trade.”

Johnny Zamrzla, Western Pacific Roofing, Palmdale, California, and former WSRCA president and former NRCA president, states, “Next year we fully expect to see our business growth to continue. With some rain, we expect more growth in the roof recover and replacement sector as well. The same and/or similar product usage will continue, as has been the case for the last couple of years. Dependent upon rainfall, our service, repair, and maintenance portion of business could be up.

“We expect our economy to be generally as good as it has been, but we don’t see growth without the need for travel. The water issue is in need of corrective action and major change must be faced in cleaning up the forest properties before rebuilding in the areas devastated by this year’s fires. There is a growing need to find additional laborers and replacements for our current workforce.”

Everett Martin, Empire Roofing, Billings, Montana, noted, “This past year was up and I believe we will see more work and moderate growth for 2019. We work with all types of roofing and waterproofing products and we expect to be doing less of the steep-slope standing-seam metal roofing and more of low-slope membrane roofing. We change our business mix according to the type of projects available for us to bid in our region. We’re seeing a continued upswing in the economy, but the available workforce is shrinking. The cost of labor will continue to rise and at some point slow the construction market if other peoples’ wages don’t grow with the economy. As always, we will need to develop a larger workforce to continue to grow with the economy.”

Ron Lloyd, Kokua Roofing Service, Kailua, Hawaii, said, “We expect our business to remain the same or slightly increase. We’ll be using the same products and doing more service work. The economy here is probably a little better than the rest of the West. Roofing in Hawaii is strong, the reroofing market is booming, and there are many new projects slated for 2019.”

David Montross, Montross Companies, Rancho Santa Margarita, California, said, “I’m thinking business will be the same as last year, but I have hopes that work will improve. We will offer the same services, but will also reach out to a broader group of users. It seems owners are holding onto their profits and looking to sell/hold properties, which affects their decisions for any capital expenses.”

Travis Nelson, Brown Roofing, The Dalles, Oregon, noted, “While 2019 is likely to be a strong year as compared to average, we have seen some early signs that things will be much more competitive in the roofing market in our area of Oregon and Washington. It doesn’t look like we will be expanding into new product areas in the coming year. There is still enough demand for the types of work we already are doing regularly. I suppose there might be more opportunities in sheet metal work. In the past couple years we had to do more sheet metal work than we are used to doing and now we have more contractors that are relying on us to meet their needs in this area. The economy will be strong overall in our area of eastern Oregon and Washington. As strange as it seems to say this, I am actually hoping that in the coming years the economy stays good but that the demand for roofing trends toward the more normal ranges. The super high demand we have had the last few years is a strain on the workforce. It would be nice to have a little more time to refocus on safety programs and other training, and also to get back to developing relationships with customers, building owners, and general contractors. For a few years now we were stretched a bit thin in those areas and it would be nice to get back to normal.”

Rob Winkle, Roof Asset Management, Thousand Palms, California, said, “We believe that our business will remain strong for 2019. We service all types of roofing systems, so the mix changes from year to year. Our economy is doing well, although California regulations, taxes, and other burdens create a more difficult work environment than other states. We’re experiencing contractors from other cities attempting to locate shops in our area and are under bidding projects to try and establish some business. This practice continues to lower the expectations of the actual cost of roofing and adversely affects the entire market.”

Bruce Radenbaugh, Bilt-Well Roofing, Los Angeles, California, stated, “Our business will remain the same as last year, very busy with both residential and commercial roofing. We’ll be using more coating and waterproofing plus high-end steep-slope products. It seems to be another stormy season for Southern California roofing and once again we have several months of backlog. The past recession created a need for reroofing due to little or no maintenance. We have an extremely dense populous in Los Angeles for our 85-year-old business and the city is loaded with new construction opportunities and a need to reroof residential and commercial properties. We have been on several jobs to repair and evaluate single-ply roofing projects and it seems that we have issues with uneducated roofing contractors installing thermoplastic membrane with little or no knowledge of how to apply the details.”

Michael Trotter, Front Range Roofing, Greeley, Colorado, stated, “Business is steady and it appears this will continue through 2019. Our local economy seems above average when compared to the rest of the West. The workforce will continue to be our biggest challenge.”

Dennis Ryan, Waterproofing Associates, Mountain View, California, said, “At the expense of sounding like a broken record for the last five plus years, we are currently experiencing another very fine year of business for Waterproofing Associates. Each year over the last five years, the market for our company has improved. The reality, I’m sure, is that a slow-down of sorts is somewhere in the future, but for now 2019 is looking like we are in store for more of what we have experienced in the last several years. I am hearing the same from other contractors in the Bay Area and Northern California in general. Backlogs are healthy and opportunities seem to be available.
“New construction and retrofits continue to be strong and 2019 could be equal to 2018. Even though it looks good at this point, we always have to keep a cautious mindset when it comes to future predictions because anything can happen. TPO and PVC single-ply, hot and cold BUR, sheet metal, tile, composite shingles, slate, and waterproofing are all in the mix right now for 2019.

“Our service department has grown considerably over the last three years. What used to be a one-man show now includes five service managers taking care of that end of the business. The service department’s contributions include leads that turn into larger projects that help to fill in the workload for the production side of the business. The service work for 2019 looks to be promising as well.

“Workforce development, immigration reform, and codes and regulations are all still hot-button items. It does seem that the roofing industry is very aware of the issues now and discussions are turning into action. Roofing Day in Washington, D.C., that took place in March 2018 is an example of that action. Another event is scheduled for April 3-4, 2019. If you missed last year’s event, I would recommend you check it out. It is a good experience and something good for our industry could come from it. The best of luck to all of us in the roofing industry for 2019 and into the future.”