An analysis of the latest Economic Census data by NAHB economist Natalia Siniavskaia shows that, on average, residential construction establishments were able to cover their hard and soft construction costs and generate positive profits in 2012.
The 2012 data show that the direct costs of construction – consisting of construction payroll, costs of construction work subcontracted out to others, and costs for materials/supplies – vary from 65% of total revenue of specialty trade contractors to 87% of the business receipts of multifamily general contractors without land costs. For single-family general contractors (who build on land customers own), the direct costs of construction consume on average 81% of the total revenue.
For single-family general contractors, 7% of total business receipts go to pay wages of construction workers. Specialty trade contractors, who maintain larger construction payrolls and subcontract out a minimum amount of work, spend on average 19% of total revenue on construction payroll.
In sharp contrast, multifamily general contractors who subcontract out most of the work, spend only 3% on the construction payroll. Their biggest expenditure is the cost of construction work subcontracted out to others, 63% of the total revenue. This far exceeds the typical spending by single-family general contractors on subcontractors, which amounts to 36% of outlays.
Active HBA Remodeler members can expand their knowledge—and their businesses—by earning an NAHB educational designation with the generous support of Lowe’s ProServices.
The Lowe’s CGR Scholarship and the Lowe’s CAPS Scholarship help pay for the classes needed to earn the prestigious Certified Graduate Remodeler (CGR) and Certified Aging-in-Place Specialist (CAPS) designations.
First, interested participants must apply for the scholarships, which are offered on a first-come, first-served basis. The deadline for both scholarship applications is January 2, 2015.
CGR Scholarship recipients can take the Professional Remodeler Experience Profile (PREP) online for free until March 13, 2015. Results of the PREP guide individuals to the courses they need to complete to obtain the CGR.
If the PREP is taken prior to the 2015 NAHB International Builders Show® in Las Vegas, individuals can start taking Pre-Show courses at the show January 17-20.
CAPS Scholarship recipients can take the courses needed to obtain the designation at either IBS or at the Remodeling Show in Chicago, September 30 through October 2, 2015. Courses include Business Management for Building Professionals, Project Management and Design/Build Solutions for Aging and Accessibility (CAPS II).
Customers seek Remodelers with CGR and CAPS because these designees demonstrate passion for and commitment to being the best in the industry. And companies benefit too—as another indication of their professionalism, members with the CGR and CAPS report higher annual revenues than those without.
For more information, visit nahb.org/LowesScholarships or call 800-368-5242 x8153.
Are you an Approved Professional Remodeler? Have you thought it would be helpful to network with other remodelers that are not competitors and learn more about how other professionals run their companies?
The 20 Club program is forming the first new Remodeler 20 Club since 2006. It will be the second remodelers’ club established in the program’s 20-year history.
A two-day meeting focused on the club’s formation will be held at NAHB headquarters in Washington, D.C. later this year. A working agenda for the new club includes team building exercises and discussions like sales and marketing, customer service, company financials, and presentations from some of the most knowledgeable and well respected consultants in the construction industry.
The remodelers who are forming the new club are excited about being able to exchange ideas and best practices with their peers – a dynamic often referred to among existing 20 Club members as their own personal “board of directors.”
Statistics show that this high level of interaction and connectivity with peers helps 20 Club members double their net profits by the third year of membership.
Knowing that help for any situation is just an email or phone call away is one of the greatest benefits of being a member of a 20 Club. For more information on how you can join the club, visit nahb.org/20clubs.
The Remodeling Market Index (RMI) reclaimed the high-water mark of 57 in the third quarter of 2014, the sixth consecutive quarter for a reading above 50.
An RMI above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity.
“Most remodelers remain confident that the market is improving as home owners undertake renovations, large and small,” said Paul Sullivan, CAPS, CGR, CGP, of Waterville Valley, NH, chairman of the Remodelers Council of the National Association of Home Builders. “The consistency and longevity of positive RMI readings are in line with the gradual recovery of the housing industry.”
The RMI’s future market conditions index rose to 58 from 56 in the previous quarter. All four sub-components − calls for bids, amount of work committed for the next three months, backlog of jobs and appointments for proposals – increased or remained level with the previous quarter’s reading.
The current market conditions component of the RMI increased one point to 57 this quarter. A two-point gain was made among the categories of large additions as well as smaller remodeling jobs with readings of 56 and 58, respectively.
“The stabilization of the RMI in the mid-50s for more than a year demonstrates the slow, steady recovery of the housing industry that we expect to continue,” said David Crowe, chief economist of the National Association of Home Builders. “The major headwind to a stronger recovery is a shortage of qualified labor and subcontractors in some parts of the county, making if difficult for remodelers to employ carpenters and finish projects as quickly and economically as many of their customers expect.”
ATTENTION BUILDERS AND REMODELERS: If you have changed your mailing address since you have signed up with the program, please send us an email of your current/updated mailing address. All emails can be sent to Josh@HBArebates.com We look forward to writing your next rebate check!