NAHB Study Allows Remodelers to See Where They Rank Against the Competition

The Remodelers’ Cost of Doing Business Study –which has been published periodically since 1990, to assess the growth and overall vitality of the industry– is now available in an updated 2020 edition. When used side-by-side with a 2018 income statement, a general or design-build remodeling business can gauge their own success by measuring against an array of benchmarks, gathered from the financials of other members nationwide.

The newly-released study shows that the average gross profit margin for surveyed remodelers increased from 28.9 percent in 2015 to 30.1 percent in 2018, which was the highest such number in almost 30 years.

The average net profit margin was essentially unchanged during the same period (around 5.2 percent), largely due to higher operating expenses.

“The new version of this publication, offers remodelers a great way to benchmark their business financials in comparison to other similar businesses across the country,” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J.

NAHB predicts that over the next few years remodeling expenditures will continue to grow, but at a more gradual pace.

To conduct and complete the study, NAHB’s economics and business management experts collected and analyzed financial statements for fiscal year 2018 from remodelers across the country. The study provides detailed information on important indicators, including:

• Gross and net profit
• Assets and liabilities
• Owners’ equity
• Financial ratios

The analysis also compares remodelers’ performances based on business model, such as general remodeler versus design-build remodeler.

[Editor’s Note: Editors who are interested in receiving a complimentary copy of the 2020 edition of the Remodelers’ Cost of Doing Business Study to review for their publications should contact Patricia Potts at ppotts@nahb.org]