The current state of affairs

State of the Industry - The State of the Demolition Industry

September 17, 2018

According to our State of the Industry survey, continued economic expansion and investment in the building sector has opened up new opportunities for demolition contractors. And while global changes in trade policy, specifically from China, have made finding end markets for some materials a challenge, a steady pipeline of work has helped business owners weather the disruption.

This growth is reflected in the number of jobs demolition contractors have tackled in the last year. According to our survey, 57 percent of contractors said the number of projects completed by their company in the previous 12 months increased from the 12 months before that, 27 percent said the number of jobs stayed the same, while only 13 percent said they saw a decrease.

“The global economy is robust, and the U.S. economy is extremely robust,” Jim Graham, executive vice president at Peachtree Corners, Georgia-based Winter Environmental, said during the State of the Industry roundtable. “There has to be a need and a demand, and right now, the need and the demand for new space, renovated space and expansion is extremely vibrant and robust. We’ve got more opportunities than we have resources to be able to support these projects, and we’re forecasting the same for the next three to five years.”

Backing Graham’s sentiment about projected future growth, 52 percent of contractors who were surveyed said they expected the number of demolition projects they participated in to increase in the future, as opposed to 33 percent who expect to do the same volume and just 11 percent who expect volume to decline in the future.

Although contractors are tackling more jobs these days, some business owners note they’re having to be more judicious in the jobs they solicit because of competition creating a climate of lower bids, opting for quality over quantity instead.

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“I think we’re seeing the federal space as the space that we want to be in right now,” Scott Knightly, president and CEO of Epping, New Hampshire-based EnviroVantage, said. “We’re finding that the general contracting and the public bid projects right now are becoming more difficult to attain. What we’re seeing is people are splintering off larger companies and starting to grab up some of the smaller work, the low-hanging fruit, and we’ve been very leery of going out and trying to do that public bid stuff because it’s about how low you can go.”

The increased activity across the country has also allowed contractors in certain markets to strike while the iron is hot for the jobs with the greatest demand.

“Through the years, we've gone in cycles of going from being a local contractor, to working all over the country, to being back to local again,” Scott Homrich, vice president of estimating at Carleton, Michigan-based Homrich says. “We're in a cycle right now where the city of Detroit has been a declining city for so many years, but is on a huge upswing right now, and so the vast majority of our stuff has been local. We've basically just adapted to doing anything and everything in that market that we can do. We used to do a lot more total demolition. We're doing more and more renovations as these developers are coming in and redoing all the downtown work.”