Roofing Contractor asked a variety of industry insiders and other professionals to share their insights on key trends they’ve indentified in the commercial and residential roofing markets and offer advice on the key problems facing contractors in the year ahead. Representatives from manufacturers, distributors, contractors and industry associations were kind enough to respond and share their unique perspectives, and we’ve compiled them here in the State of the Industry Report.

The Low Slope Market

FMI Corp. forecasts a modest recovery in the construction market beginning this year and accelerating to 2015. But what are the expectations for the roofing industry? Some within the industry expressed cautious optimism, but almost all of them pointed to continued economic uncertainty.

Bob Wamboldt, vice president and general manager of roofing systems business for Johns Manville, said, “In general, US GDP assumptions continue to be cautious and commercial building products markets appear to have the same outlook as predicted in 2011. Times continue to be difficult for markets in general and our roofing contractors. Specifically for commercial roofing markets, single-ply systems will continue to grow. Modified bitumens are expected to grow slightly and BUR will be flat. We anticipate a temporary reduction of activity in the solar arena with government spending declining and rebates drying up. Longer term, the prospects for the roofing market are good and we could see a return to 2006 levels by 2016.”

Kent Tolley, vice president of Quality Tile Roofing and president of the National Roofing Contractors Association (NRCA), pointed to price increases and identified other possible bumps in the road. “Trends in 2012 are projected to be the same as 2011 or slight increase in growth of work,” he said. “Contractors should be aware that most manufacturers have received price increases on raw materials. This will translate to price increases on roofing materials. Freight costs continue to increase and a limited availability of truckers could mean delays in receiving materials to the jobsites. Supply and shortages of material in 2011 meant delivery of roofing materials were delayed in some cases up to 30 days after ordering. 2012 orders should not have the same delays if manufacturers increase their inventories.”

“The overall economic outlook for the commercial construction industry, and low-slope roofing specifically, is uncertain,” said Brent Fox, vice president of National Business Development, ABC Supply Co. Inc. “Some economists have predicted a slight uptick in growth this year compared to 2011, while others are saying the market will be flat. However, one thing is certain — new construction opportunities are a small fraction of the total low-slope market today, making re-roofing the key driver. Therefore, no matter which economic forecast turns out to be correct, those commercial roofing contractors who predominantly focus on selling their services to owners of existing buildings will fare better than those who are more dependent on new construction.”

Bob Tafaro, president and CEO of GAF, also commented on the increase in maintenance work and the implications for contractors. “Commercial roofing contractors who focused solely on ‘bidding’ new work or re-roofs have struggled in the last two years,” he said. “Maintenance has become even more important and has been a focus for many commercial contractors, not least because it reduces the contractor’s liability, maintains the integrity of the manufacturer’s guarantee, and keeps other contractors away from hard-earned clients.”

“Roofing contractors can anticipate an increase in roof maintenance spending,” said Chris Salazar, chief operating officer, Karnak Corporation. “Due to the continuing economic situation, there is an increased demand for prolonging the life of existing roofs through the use of reflective roof coatings, and roof maintenance systems. This allows building owners to reduce their costs and write off the entire expense at the end of the year, rather than spreading it over several years in the case of a new roof. Most low slope roofing companies have maintenance divisions that are taking advantage of this trend. If your business isn’t one of them, you are missing out on a great opportunity.”

Joseph W. Mellott, director of Business Development for The Garland Company and president of the Roof Coatings Manufacturers Association (RCMA), also pointed to growth in the coatings segment. “As the market migrates towards more reflective roofing surfaces, it is important to make sure that if you choose to use a coating that you are working with a recognized quality supplier with a history of producing performance grade products,” he said. “In any situation, when a market expands, you experience market entry from new suppliers, it is important to qualify these new companies by performance, not cost.”

Sustainable Commercial Roofs

Several experts pointed to the increasing importance of environmentally friendly products and systems in the commercial market. John Geary, vice president of marketing for Firestone Building Products, said, “The trend for green building solutions will only continue to grow, creating a great opportunity for contractors who are prepared to deliver high performance roofing systems. The Center for Environmental Innovation in Roofing and the Roofing Industry Alliance for Progress have worked together to develop the RoofPoint™ system. This is a voluntary, consensus-based green rating system that provides a means for building owners and designers to use in selecting roof systems based on long-term energy and environmental benefits. Savvy contractors can position themselves most effectively by helping building owners and designers better understand the cost and benefits of a long-lasting roof, rather than focusing only on the initial cost of construction.”

Reinhard Schneider, owner of RS Consulting, emphasized the role of the roof in overall building energy efficiency. “Roofs are becoming more energy efficient with higher R-values and more reflective cool roofs,” he said. “More roofs are being used as platforms for alternative energy systems and storm water retention. These photovoltaic and vegetative systems require more durable roofing substrates to handle the additional installation and maintenance traffic. Energy efficiency, durability and sustainability are being defined by organizations like RoofPoint and becoming more and more important to protect the added investment.”

Dan Piché, president, Mule-Hide Products Co. Inc., said, “Keepingpace with the sustainability trend is increasingly challenging, not just for new construction, but also for re-roofing and roof maintenance projects. Contractors can position themselves for growth by getting educated about this trend and embracing it — recommending and installing sustainable roofing solutions, such as those with recycled content and environmentally friendly performance benefits such as energy savings or storm water management.

Christian Madsen, president of Madsen Roofing & Waterproofing, indicated owners are embracing the concept of sustainability. “In an attempt to be more green, owners are accelerating recycling requirements for roofing materialssuch as thermoplastics, EPDM rubber and some insulations. As owners see longer term property ownership periods on their horizons, they appear to be interested in thicker membranes when specifying single-ply systems. Finally, it appears that the re-roof market is picking up a bit due to projects deferred at the start of the recession.”

Robert Reale, manager of Marketing Communications at Carlisle SynTec, expanded on the trend toward thicker membranes. “Savvy building owners are weighing life-cycle cost over installed cost,” he said. “A typical project involves costs for design, insulation, labor, and materials. A membrane upgrade only affects material costs. Thicker TPO or PVC membrane can be welded without changing the welder speed or temperature settings. EPDM makes use of the same seam tapes, regardless of membrane thickness. Detail flashings do not change based on the membrane thickness. With thermoplastic or elastomeric systems, labor and flashing costs should remain virtually unchanged. Increasing from a 45- to a 60-mil membrane typically adds as little as 5 percent to the cost of the roofing installation while increasing its life cycle by 33 percent.”

Richard L. Cook, Jr., Partner, ADC Engineering and president of RCI, Inc., pointed to key concerns regarding air barriers and insulation. “The low sloped roofing market is ever changing, but several recent trends/issues need to be considered, including (1) lack of coordination of the air barrier system of exterior walls with the roof system and (2) arbitrary increases in insulation thickness within the roof system without consideration of the effect on the systems — their attachment, fire and wind ratings, life cycle costs, and other significant performance factors.”

The Residential Market

The residential market was buoyed by storm work last year. Bob Feury Jr., CEO of Allied Building Products, cautioned that all the storm business last year makes it hard to predict how quickly the market will improve. “Overall the 2011 roofing market saw surprising growth over the previous year levels,” he said. “Storm activity certainly contributed to this growth and would pose a challenge to predict this year’s overall market. In both the residential and commercial space, the unexpected growth could be cause for over-optimism coming into the new year. One thing to keep in mind should be that it is too soon to rely on the economy to drive industry growth.”

Feury also pointed to possible price increases. “Asphalt continues to drive the price of related building products (shingles, built-up roofing, modified bitumen), and the instability as well as volatility remains a real issue for our contractors as well as manufacturers,” he said. “Overall raw material prices remain high, and could continue to escalate in 2012 based on preliminary reports.”

The housing market may still be tough, but one result is that people are staying in their homes longer, and this can provide incentive to invest in a higher-quality roof system. Kirk Villar, vice president, residential sales and marketing, Atlas Roofing, thinks these factors will help boost re-roofing work. “There will be a trend towards roof replacement as homeowners will be staying longer in their existing homes and will need to replace their roofs or upgrade the curb appeal,” he said. “There will be increased competition to offer better materials and better technology.”

Tafaro agrees. “In these challenging economic times, more homeowners are looking for products that have a high perceived value,” he said. “They want to feel that they are getting a durable, high-quality shingle from a reputable manufacturer. Leading manufacturers have made strides in producing higher-quality products with more robust warranty coverage, leading to a considerable increase in value for homeowners and contractors.”

“With shingles making up a significant amount of the home’s curb appeal, it is important to find a shingle that matches the overall style of the home,” Tafaro said. “The most successful contractors are educating their customers about the different options available. This is important, as in a recent third-party market research report (Market Decisions report, October 2009), 84 percent of homeowners said the specific shape and style of the shingle was important to their decision on what to purchase for their roof.”

“In the current economy homeowners understandably remain value-conscious about their home improvement choices,” said Sheree Bargabos, president of Owens Corning Roofing and Asphalt and president of the Asphalt Roofing Manufacturers Association (ARMA). “When it comes to making a roofing product selection, asphalt shingles are known to perform well and offer value. It remains a durable, reliable choice that offers a wide range of aesthetics. As a result, the sale of asphalt shingles continues to represent the core of the steep slope business.”

“Roofing manufacturers have seen an increase in popularity for residential designer asphalt shingles in recent years,” said Reed Hitchcock, executive vice president of ARMA. “Customers want to be able to choose from a wide variety of color shades, textures and styles when specifying a roofing system for their property. Today, homeowners can replicate the curb appeal of a slate roof or a wooden shake roof with the reliability and affordability of asphalt shingles. The different designer asphalt shingle trends are likely to be directly related to the architecture found in the various regions. The options are endless when it comes to designing an asphalt shingle roofing system, but some homeowners still try and imitate the appearance of non-asphaltic materials. However, asphalt shingles can give a homeowner a similar look and feel to alternative roofing materials but at a more affordable price and with superior safety ratings.”

Jonathan Wierengo, vice president of marketing for The Tapco Group, is optimistic that sales of composite shingles will increase in 2012. “Composite shake roofing has become very attractive to homeowners for a few reasons,” he said. “First is the style factor. Another reason is because many municipalities now prohibit replacing shake roofs with new wood shake because of fire risk. So we’re seeing it perform very strongly in the Northeast and Mid-Atlantic, as well as in areas like the West that have the fire risk concern.”

Metal Roofs

Rick Pogue, owner of Arrowhead Building Supply, agrees that the composite roofing segment will see gains this year, but he believes the outlook for metal systems is even better. “I have seen industry reports that forecast an increase in metal roofing systems as high as 20 percent over the next 5-10 years. That certainly does seem to be a possibility to me,” he said. “Historically, the Midwest is the slowest to accept industry changes and metal roofing is certainly trending upward in the heart of the country. My ‘crystal ball’ foresees that as the technology with metal roofing systems improves over time, metal will continue to grow, especially once you add the rising costs of asphalt roofing products to the mix.”

Todd Miller, president of Isaiah Industries, Inc., and vice chair of the Metal Construction Association (MCA), emphasized the growing number of options when it comes to residential metal roofs. “Homeowners are increasingly aware of the product type and color options available in metal roofing,” he said. “For that reason, it makes sense for contractors to learn all they can by taking advantage of available training programs, as well as by attending METALCON.”

Bo Hudson, CEO of DECRA Stone Coated Steel Roofing, also pointed to recent improvements in metal products. “One of the most significant trends is the development of easier-to-install metal shingles,” he said. “In general, both residential and commercial metal roofing has been perceived as costly and difficult to install. Metal was seen as a material you needed special training and proper tools to install, while asphalt can be installed by just about anyone. We’ve tried to keep this in mind when designing our latest products, making them easy to install with no special tools needed, fastening direct to deck. Additionally, improvements to product performance such as the ability to withstand stronger winds, larger hail, etc. will also continue.”

Jim Bush, vice president of sales for ATAS International Inc., emphasized the potential for growth in the metal retrofit market. “In both the commercial and residential sectors, I think contractors should be aware of the renovation and retrofit side of the business. I believe these opportunities should far exceed new construction. A contractor should also realize that, in this market, he can be viewed as a consultant on a project and identify additional value added elements into a project. This can include additional energy features, such as cool roof technology, including reflective painted roofs, above sheathing ventilation and photovoltaic systems. I think contractors need to realize that as consumers and building owners become better educated about roofing products, contractors must begin to consider themselves as consultants to their clients.”

Metal also has a good story when it comes to sustainability, said Chris Welch, general sales manager, Follansbee Steel, which announced at press time that the company would be closing its doors. “Sustainability will be a continuing trend, especially as building codes and standards become more stringent,” Welch said. “Since the roof is often the least energy-efficient part of a building envelope and energy costs are on the rise, there is a lot of opportunity here for contractors in new construction and retrofit projects. Metal roofing provides recycled content, recyclability and can save up to 40 percent on energy costs. For an even greener application, metal roofing is also a perfect substrate for building integrated photovoltaic solar panels and also may be used in conjunction with rain water management systems.”

New Technology

Many of the people we spoke with pointed to quantum leaps in technology and urged contractors to take advantage of the efficiencies they could provide. Richard Spanton Jr., CEO, AccuLynx.com, summed it up this way: “I believe steep slope roofing contractors need to be aware of new technologies offered to the industry. There are many business software solutions, aerial roof measurement companies, estimating tools and of course phone and tablet apps available. These tools can be used to greatly enhance efficiencies, profitability, and organizational structure. Technology can also tremendously reduce time and increase accuracy in a roofing business. Roofing contractors should research what options are available and adopt solutions to enhance their business model.”

Pat Nussbeck, CEO of Aspen Contracting, Inc. also pointed to technology as a way to increase profits. “Consumers and insurance carriers today expect a much higher level of service, accuracy and accountability,” he said. “The fact is, if you’re not willing to invest the time, money and effort it takes to keep up, you may not be in business very much longer. To insure immediate survival and long-term success, a contractor today has to be much more focused on technology and on implementing new inspection and estimating processes that allow field teams to accurately and reliably identify legitimate insurance claims.”

Ray Smith, Managing Director, AppliCad USA, used the example of metal take-off software to point out how technology can pay for itself. “Do not cut corners on this — it just costs you more money,” he urged. “Get the best software and use it well. It will make you money. The depressed economy is forcing many to accept lesser standards. A business must work hard to maintain and indeed improve standards. Use the slow time to develop and implement the best possible technology in their business — investing in the future.”

“Incorporating technology into everyday business practices has become a must for realizing increased efficiency and profitability,” said Chris Barrow, president and CEO of EagleView Technologies, which provides aerial measurement reports. “For any contractor who wants to remain competitive it is critical to not be afraid of technology and to be willing to try it out in their business,” Barrow stated. “With 75 percent of Americans accessing the Internet and using technology in one form or another, it is expected that the people they choose to do business with are technologically savvy as well.”

Challenges Ahead

Those in the roofing industry identified several key problems to keep a watchful eye out for in the year ahead beyond economic uncertainty, including increased competition, governmental regulations and code changes. They also gave advice on ways contractors could prepare themselves to combat those challenges.

“There are many obstacles for the roofing contractor today — more litigation, escalating insurance premiums, increasing cost of materials, etc. However, I see the biggest problem for many contractors is less work and more competition,” said Brian Lambert, director of products and systems, The Garland Company, Inc. “The roofing contractors who provide smart bids on the right projects, who refuse to sacrifice quality, who purchase materials wisely and control their overhead — these are the contractors who will thrive in this environment and will be well positioned for better economic times.”

Mike Huddleston, owner of Mike Huddleston Roofing Systems and president of the North Texas Roofing Contractors Association (NTRCA), points out that competition is one thing, but bidding against unscrupulous contractors is another. “I’m not sure if it’s the biggest problem, but one that is increasingly impacting the industry is that a portion of those calling themselves ‘roofing contractors’ are unscrupulous people with no insurance, no experience and no credit, clouding the market with low pricing, low quality and low service,” he said. “It is up to every roofing contractor to help create an industry we are all proud of and can remain competitive in. Consumers also need to be educated, and this is something we are committed to helping with at the NTRCA through our ‘Who’s on Your Roof?’ consumer awareness campaign.”

Ray Rosewall, president and CEO, DaVinci Roofscapes, concurs. “Unfortunately, these non-professionals entice the homeowner, who is coping with a high stress event, to make a quick decision,” he said. “They price the project to undercut the ‘Class A’ true professionals we rely on to sell, install and support our 50-year warranted roofing products,” he said. “What can be done about this situation? Ongoing advertising and communication that educates consumers on the importance of using a reputable contractor with strong ties to the community creates a barrier to entry. This type of education helps ensure that homeowners will make the smart decision when choosing a contractor — even during high stress situations that follow a severe weather event.”

Generating Leads

Increasing sales begins with generating more leads, and that’s been harder and harder in this economy. And if that’s not tough enough, contractors have to adapt to a changing consumer landscape, said Tom Smith, president of CertainTeed Roofing. “A significant issue facing professional roofing contractors is adapting to promoting themselves with homeowners who are increasingly utilizing the Internet and social media to obtain information,” he said. “While traditional word-of-mouth and yard-sign promotion will continue, given the dollar investment in a roof replacement, many homeowners are not comfortable to make the selection in a roofing contractor unless they have the opportunity to learn more about their company’s professional background and roofing credentials. Homeowners are clearly looking for contractors to provide examples of jobs, product educational information and, ideally, easy-to-understand presentations and videos. At CertainTeed, we are encouraging of roofing contractors to take advantage of our digital library of product marketing tools including high definition photography, and product education videos.”

Bargabos noted that Owens Corning’s research shows building trust is a key part of landing the job. “Homeowners are increasingly conducting online research to identify and vet potential contractors and look to consumer reviews, manufacturers and the Better Business Bureau sites as credible third-party information resources,” she said. “Owens Corning Roofing’s findings (Homeowner Behavior ZoomPanel Survey, July 2011) specifically found that homeowners are more comfortable reaching out for a quote when there is third party certification from other homeowners, manufacturers and/or the Better Business Bureau.”

Vaughn Bacon, business development manager of Residential for MBCI, agrees that building consumer confidence is crucial. “Take advantage of your time with a potential customer to present all applicable corporate insurances and licenses, employee safety training records, manufacturer’s certifications and company history,” he advised. “These items as well as past jobsite photos and customer testimonials, will be beneficial in building customer confidence. As an industry we must hold to the good business principles and ethics to provide our customers, not only what they are paying for, but what they ‘assume’ they are paying for. The customer will appreciate this ‘open-book’ approach and the fact that you are taking the time to sit down and address their concerns and answer their questions.”

Codes, Codes, Codes

Several respondents cited the difficulty posed by keeping up with changes to codes and governmental regulations. Hudson summed it up this way: “The biggest problem facing roofing contractors is keeping up with local, state and federal codes, including changes to ICC requirements and OSHA regulations. Many of our contractors cover all roofing scopes from commercial projects to residential new and re-roof construction. Knowing what codes to follow makes it difficult for training their employees.”

“More so than at any other time in our country’s history, small businesses — a category which includes most roofing contractors — are subject to a wide variety of uncontrollable forces,” Fox said. “Occupational Safety and Health Administration (OSHA), United States Environmental Protection Agency (EPA) and Department of Transportation (DOT) policies; changes to individual state and local building codes; the health care reform law; tighter banking regulations; and illegal immigration are just a few examples. Successful roofing contractors will make it a point to understand all of these outside forces, lead their companies successfully through the regulatory minefield, and use their knowledge as a competitive advantage.”

Piché urged contractors to be aware of regulations regarding volatile organic compounds (VOCs). “Contractors should be aware of the increasingly stringent regulations governing VOCs that are emitted by many of the adhesives and sealants used in the roofing industry,” he said. “At present, these regulations are either in place, pending or proposed in many states. Because these regulations vary by state — and in the case of California, can vary by ‘air district’ within the state — roofing professionals must educate themselves and their crews on the regulations that are specific to the markets they serve.”

“Our industry — the way we do business — is changing overnight,” said Nussbeck. “In the short-term, the biggest problem most contractors face is maintaining compliance with ever-changing state and federal regulations. The ‘Department of Everybody’ is searching for new and more revenue through enforcement of regulations. The IRS, OSHA, D.O.L., HIPPA, FMLA are all looking for contractors to pay more. Most roofing companies still run on a 1099 model. The transition to a legitimate and properly classified workforce in a W-2 model is a massive undertaking, and business owners are already overwhelmed with new regulatory responsibilities. To cope with these changes, you must first be willing to change, then hire experienced HR, legal, and accounting teams to help you navigate through it.”

OSHA

Recent changes in the residential fall protection directive and increased enforcement by OSHA generated a lot of commentary. Villar said the changes will mean one thing: more fines. “Contractors will incur additional overhead to provide fall protection and avoid exposure when accidents occur,” he said. :They’ll also spend more money in management and supervision to oversee their crews and ensure compliance with safety regulations. Their profits also may dip slightly if they work more slowly while using additional fall arrest systems, equipment and practices. Hopefully all the awareness will result in fewer injuries and the industry will become more safety conscious.”

“OSHA no longer accepts the use of slide guards as an option for fall protection on steep-slope roofs,” said Tolley. “All workers need to follow current OSHA Fall Protection methods, which would include roofers being fully tied off with a safety harness.”

“There are current discussions with OSHA to see if there can be other Fall Protection options that could be used for repairs or small jobs,” he continued. “At this time there is no agreement to make any changes to the current fall protection requirements. OSHA has been active in the enforcement and giving citations for contractors not following the new criteria. These citations include new increased fines over previous years.”

“It should be pointed out that even without the latest regulations, falls in construction have dropped dramatically in the past few years, a testament to contractors and roofing contractors specifically who are conscious of worksite safety more than ever,” said Dave Rowe, director of product management-building envelope, Englert Inc. “While the new regulations specify several different methods to protect against falls including temporary guardrail systems and safety nets, we suspect that contractors will continue to use personal fall arrest and personal fall restraint systems involving lifelines and harnesses as the dominant, most efficient and cost effective safety systems.”

“Where one contractor sees a problem, another one sees an opportunity,” Salazar stated. “The impact will be severe on contractors that are not up to date on the requirements or lack the resources to enact them and remain competitive. On the other hand, contractors that have those resources will benefit from less competition.”

Pogue believes the best way to cope with OSHA regulations is to be proactive. “Learn all you can about what is required of you and your workers by OSHA,” he advised. “Openly work with your local OSHA representative and do not shy away from them. Stop ‘living in denial’ about wearing fall protection equipment and, instead, make these new rules part of your business, or you could wind up out of business.”

The Green Monster

Many industry experts singled out the International Green Construction Code (IgCC), recently published by the International Code Council, as an important development to watch. While many pointed out that its effects will not actually be felt until it is widely adopted by state and local codes, others warned it could possibly result in profound changes in the way roofing contractors do business.

“The IGCC code will greatly affect the roofing industry as municipalities start to implement the code into their local code structure,” said Randy Adams, president, R. Adams Roofing. “Many aspects of the IGCC extend across regions of the country, so our nationwide industry will be confronted with code requirements in some areas but not others.”

He pointed out a couple of examples to demonstrate the complexity of this code:

• “The code requires that 55 percent of construction materials used must be of recycled content, recyclable, or for indigenous materials, recovered, harvested, extracted and manufactured within a 500 mile radius of building site. In many instances trying to purchase products manufactured within a 500 mile radius of the project site will be impossible.”

• “Projects’ construction documents must include a building service life plan for 60 years or 25 years in some circumstances. The service life plan includes provisions that roof coverings have a minimum design service life of 20 years based on the manufacturer’s reference service life data or other approved sources. While all manufacturers have products or systems designed for a service life exceeding 20 years, many times owners have chosen a shorter life to make their project financially viable.”

Adams concluded, “While the overall objective of the code parallel’s current societal goals to be ‘green,’ its implementation will place some projects beyond the owner’s ability to finance and construct needed infrastructure.”

Richard L. Cook Jr., partner, ADC Engineering and president of RCI, Inc., believes the IgCC could cause unforeseen problems. “Roof systems provide many benefits to our facilities (protection from snow, wind, rain, fire, hail, temperature, and aesthetics in some cases), but when we overemphasize one property (insulation value) without considering the effects on the other performance characteristics, we do an injustice to our facilities and our environment,” he said. “We must maintain a balanced, total performance perspective. Although the benefit and value of our environment and natural resources is unquestionable, a separate ‘green’ code will cause confusion and conflict with the requirements within the standard ‘I’ Codes.”

Others noted the code could drive changes in roof system design and products. “New products will enter the market to satisfy specific green standards,” said Mellott. “It is important to make sure that the products meet the function and durability of existing products prior to selection. The true sustainable solution is a long-lasting roof.”

Todd Kuykendall, director of product management, Georgia-Pacific Gypsum, agrees that durability is a key consideration. “As alternative roofing systems proliferate, such as PV or vegetative roofs, the value of a strong platform is critical to protecting the roof from increased foot traffic and heavy equipment during and after installation.”

Labor Shortage

Even with relatively high unemployment nationwide, many contractors cited finding qualified employees as their most pressing problem. “The number one challenge has to be the availability of good, reliable, willing to learn field employees,” said Tim Hershey, president of Thoroughbred Contractors. “The best advice that I would give anyone would be: if and when you get new, fresh, reliable and excited young workers, have high standards and expectations of them — just as you have with the core of your workforce to date — but take good care of them, because if you don’t, they will be gone in a moment’s notice.”

Ken Kelly, president of Kelly Roofing & Energy Saving Solutions, worries about labor price increases. “A phenomenon I call the trifecta of labor cost increases is occurring throughout our industry,” he said. “Immigration reform and the elimination of the H-2 (temporary visa) programs are limiting the availability of individuals willing to work on a roof. Even with our country’s high unemployment, finding roofing mechanics is difficult. Health care reform is also driving up the cost of labor. No matter what your political views are, we can all agree that the cost of health care isn’t going down. OSHA’s new enhanced enforcement tactics and recently reminded rules are decreasing productivity and increasing labor rates — a volatile combination. Added together, the trifecta of labor increases is adding significantly to the cost of roofing.”

Randy Giggard, Managing Director, Research Services Group, FMI Corporation, summed up the problem this way: “The design and construction industry has shed more than 2 million total jobs since the start of the recession. As odd as this may sound, the industry is facing an imminent craft labor shortage as recovery takes root. This recession has differed from those of the past, particularly in its duration. Many of these skilled workers were displaced three or four years ago. In most cases, these workers have retrained, struck out on their own, or developed a new career path. The bottom line is that they won’t be coming back.”

Giggard noted that FMI forecasts modest market recovery beginning in 2012 and accelerating to 2015. “The recovery will expand the value of construction put in place for all buildings from $617 billion in 2011 to $878 billion in 2015, a total increase of 42 percent,” he said. “Effects of the recession on the roofing industry have been moderated somewhat by the heavy mix of re-roof and repair work. But as new construction returns, FMI estimates that the market will demand 31,000 new roofers in the workforce by 2015. Given the lead time to train productive new workers, progressive roofing contractors need to begin planning now for who they will need and where they will come from.”

Education Is Essential

Ongoing education is essential to keep up with changes in codes and regulations, as well as new technology. Miller believes meeting these challenges can make the industry stronger in the long run. “Successful roofing contractors are professional companies working hard to be educated and deliver the best possible value to their customers,” he said. “This raises the bar for everyone, and it should. While this may challenge some companies in the short term, it is ultimately good for everyone. Roofing is such an important part of every structure. Being a professional roofing contractor is something of which those in the profession should be proud.”

Tolley wants to let contractors know that help is out there. “All problems are potential opportunities if you are properly educated and prepared,” he said. “Become educated in the requirements you face and comply with those issues that impact your company.”

“I am optimistic about the future of the roofing industry; however it means that we need to raise the level of our commitment to educate and be trained in dealing with the issues we face,” he concluded. “I would encourage roofing contractors to contact or join roofing associations, whether national, regional or local, and to participate and give their voice to address these issues.”