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2021 Top Metal Builders May 1, 2021

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2021 Top Metal Builders
The pandemic defined the year, but the labor shortage continues

In the metal building industry, there is considerable confusion about terms. That confusion manifests itself in our annual list when we try to identify metal building contractors and metal building erectors. For the 2021 Top Metal Builder list, we tried to separate the erectors from the contractors. Our ultimate goal is to create two separate lists of Top Metal Builders and Top Metal Erectors, which we will start next year.

For this year’s list, though, we highlighted those companies that were erectors only. Our reasoning is that we are actually counting purchased steel twice. Since both contractors and erectors can be involved in the same building, and the tonnage is submitted by two companies, we’re double dipping.

We also expanded the number of companies on the list. This year, we have identified 114 companies on each list, compared to 100 in previous years. That addition accounts for the erectors on the list, and we chose 114 because there was a natural break in the data.

We also know that from year to year, there is a considerable churning of the companies who submit to the Top Metal Builder list. Typically, about 50 companies from the previous year don’t submit in the current year. For the Metal Construction News 2021 Top Metal Builders list, nearly 100 companies from last year didn’t submit this year.

Part of that is the nature of the industry. Companies that construct pre-engineered metal buildings will often have years when they do several of them followed by years without doing many at all. There is a natural ebb and flow within a contracting company. The exception, of course, is with contractors who specialize almost exclusive in metal buildings, such as Span Construction & Engineering Inc., Madera, Calif., which has been the largest metal building contractor for nearly three decades.

Over the last 10 years, there have been about 500 companies that submit to the Top Metal Builder Award, and over the last several years, the number submitting in any given year has increased. But this year, we saw a sharp decrease in submissions. Nonetheless, the average tonnage and square footage of 2020 projects reported by this year’s submitters weren’t significantly different than reported for 2019. The tonnage average actually increased about 1% while square footage decreased only 4.2%. Given what happened in the country and the industry because of the pandemic, those are remarkable numbers, but they can probably be attributed to the lack of participation from companies that saw sharp decreases in their construction activity. That’s normal. Companies tend to submit to programs such as this in good times and hold back their numbers in bad times.

Market Share: During economic downturns, it is axiomatic that large companies will increase market share while smaller companies shed it. A large company may see declining revenues but improve its market position. Interestingly, when we look at the market share of the top 10 companies compared to the 100 largest in terms of tonnage, we see a significant decrease this year. In previous years, the market share hovered between 55% and 60%, but in 2020 it dropped to 46.4%. That’s a significant change.

Biggest Challenge: It would be flabbergasting if the COVID-19 pandemic were not the biggest challenge the top metal builders faced in 2020, but perhaps what isn’t surprising is that it was not as dominant as we would have expected. The labor shortage—a perennial workhorse the challenges contractors face—was still identified by more than a quarter of our respondents as the biggest challenge they faced last year.

We broke down responses that identified COVID as the biggest challenge into two categories: people who identified COVID as the issue, which mostly included reduction in business, and those who saw the increased work requirements as the biggest challenge.

Of the remaining issues, rising material costs, supply chain issues, product shortages, almost all of them can also be attributed to issues related to the pandemic. Of particular interest was the issue of rising material costs. Last year, steel prices wasn’t mentioned by a single metal builder, yet, in previous years when steel tariffs were a hot topic it, rated much higher concern.

Article from: 2021 Top Metal Builders | Metal Construction News