2020 Vision: A Look Ahead for the Roofing Industry
Embracing national certification efforts and innovative new technologies in 2020 will help increase efficiency and cut costs for roofing contractors.
(Embracing national certification efforts and innovative new technologies in 2020 will help increase efficiency and cut costs for roofing contractors.)
The roofing industry is growing and evolving faster than ever, and 2019 served to underscore the importance of embracing and adapting to changes in order to thrive within such a dynamic industry. We now look back on the major events, trends, and factors that impacted the roofing industry in 2019, and look ahead to developments and trends the industry should anticipate in 2020.
From a bird’s eye view, the U.S. economy as a whole continued to grow during 2019, but the rate of growth slowed significantly throughout the year.
The first quarter of 2019 saw a hearty 3.1% growth in GDP, cooling to 2% GDP growth in the second quarter. The numbers remained virtually steady through the third quarter, which showed GDP growth of 1.9%. However, U.S. economic growth was expected to nearly flatline in the final quarter of 2019 with experts forecasting fourth quarter GDP gains to come in at just 0.3-0.4%.
This downward trend in economic growth is expected to continue into 2020 and beyond, with 2020 expected to end with only 1.7% GDP growth overall. Economists believe the downward trend is powered by the 2020 presidential election, global economic weakness, and trade uncertainty. However, the U.S. economy continues to be bolstered by a strong housing market, low unemployment, and strong job growth.
In the construction industry, total spending for the U.S. is forecasted to end with 1% overall growth for 2019, compared to 3% growth in 2018. This slowdown in growth is predicted to continue into 2020 and beyond. In its 2020 Construction Outlook, Dodge Data & Analytics forecasts total U.S. construction starts will fall 4% in 2020 in an “orderly pullback,” but does not believe there will be a recession. The main causes cited for the slowing pace of overall construction are the skilled labor shortage and mounting trade tensions.
Despite these predictions, roofing contractors by and large remain optimistic, with tax cuts, low interest rates, and the steady housing market fueling industry confidence. Respondents in RC’s 2019 State of the Industry Report and Survey stated that they still felt good about the overall state of roofing in terms of sales volumes and revenues, with two-thirds of respondents stating that they expect sales growth in 2020 and beyond. While there’s no reason to expect the construction industry to experience a major downturn into recession, it seems safe to say that overall growth in the industry has plateaued and roofing contractors would be wise to temper any unrealistic expectations as we move forward into 2020. With these considerations in mind, let’s review some of the key issues that will affect the roofing industry in 2020.
The Unresolved Immigration Debate
The ongoing skilled labor shortage and the rising cost of labor continued to be predominant issues facing the roofing industry in 2019, and these workforce woes show no signs of letting up in 2020. In RC’s 2019 State of the Industry Report, nearly three-fourths of all respondents reported that they had experienced an increase in labor costs over the year prior, with that increase, on average, totaling nearly 13%. Only 3% of survey respondents reported lower labor costs over the previous year.
Meaningful https://www.roofingcontractor.com/articles/93722-ribble-asks-more-of-trump-immigration-reform-plan is seen by many as perhaps the only truly viable method for solving the skilled labor shortage in the long term. Industry advocates have long urged lawmakers to create and improve policies that would provide the construction industry with the same access to foreign-born workers that the U.S. agriculture and high-tech sectors already receive.
Little progress was achieved on this front in 2019 and 2020 does not look to be much different. President Donald Trump has announced plans to “double down” on illegal immigration in 2020, and the lack of any clear direction from congress on immigration reform is not expected to change, as lawmakers’ attention will likely be monopolized by their election year campaigns. Thus, roofing contractors should expect the available pool of workers to continue to be insufficient to meet the demands of the industry and must seek out innovative new strategies for attracting and retaining needed employees.
National Roofing Certification Efforts Take Off
Aimed at helping alleviate the labor crunch, the National Roofing Contractors Association’s (NRCA) national roofing certification initiative, ProCertification, was successfully launched in 2019. ProCertification is expected to see tremendous growth in 2020, as 63% of roofing contractors responding to RC’s 2019 State of the Industry Survey reported that they will likely participate in NRCA’s ProCertification program. It’s anticipated that the ProCertification program will help combat the lack of skilled workers joining the construction industry by creating skillset industry standards, outlining a career path for roofing professionals, and improving the perception of the industry as a whole.
Besides the benefits ProCertification provides through increased employee training, know-how, and investment in their jobs, companies requiring their employees to become ProCertified can also expect to see a direct return-on-investment as more and more customers use this distinction as the deciding factor when choosing a roofing contractor to hire.
Drones and Artificial Intelligence Emerge
The construction industry continues to make significant advancements in technology relative to other industries. RC’s 2019 State of the Industry Report highlighted recent technology trends within the industry including drones, on-the-job mobile devices, cloud computing, augmented and virtual reality programs, and artificial intelligence (AI).
Of these new technologies, drone usage was the most common roofing contractors reported that they are starting to use in their day-to-day work. About 22% of all respondents in the report indicated they’re currently using drones, while nearly half said they’re likely to use drones for business purposes within the next two years. Respondents indicated that they were using the drones for various reasons, primarily for before-and-after photos for clients, roof inspections and marketing. Fewer respondents reported using drones for taking measurements and performing thermal inspections, but industry experts expect this to change as drone technology continues to become more effective, affordable, and understood.
More and more roofing contractors are also exploring the various capabilities and improvements that AI can add to their operations. For example, one common use of AI among roofers is the automated damage detection capabilities that are customarily included in many kinds of drone inspection software. Automated damage detection uses AI to analyze roof inspection images in order to pinpoint missing shingles, hail hits, and other kinds of damages.
Summary
In 2019, the roofing industry experienced positive growth overall, but saw the rate of growth decline significantly throughout the year. In 2020, we expect to see growth essentially plateau relative to previous years, as trade tensions and the looming U.S. presidential election cause the economy to slow overall. Embracing national certification efforts and innovative new technologies in 2020 will help increase efficiency and cut costs for roofing contractors. With the help of these emerging tools, roofing contractors may still experience the same growth they have seen in the past and can help propel the roofing industry forward into the next decade.