The façade contracting industry is facing a slowdown in backlogs across several key markets. Navigating these challenges, maintaining profitability, and securing future revenue lies in diversification.
In certain regions, such as the Canadian high-rise market, the slowdown is apparent. Busy markets like Toronto are experiencing reduced project backlogs, with many predicting a rebound in 12 months. Meanwhile, other markets, such as low-rise commercial or podium construction, are showing steady activity.
The consensus is that façade contractors must act now to adapt their strategies, particularly with the challenges they face:
Diversification isn’t just a buzzword; it’s a necessity. Here’s how façade contractors are diversifying across markets, products, and talent:
Particularly in the Canadian market, contractors are aggressively entering the U.S. Places like New York, California, and Texas. By leveraging existing relationships with general contractors and expanding regionally, contractors can fill gaps in their pipeline.
A recent example we’ve seen is a Canadian unitized façade contractors, shifting to deliver stick-built and modular wall systems, adapting to local market demands. Moving markets and locations isn’t easier, but the world is certainly a smaller place post-COVID.
High-rise specialists are exploring low-rise commercial projects, podium construction, and alternative façade systems like rain screens and modular walls. Diversifying into lower-value projects can sustain pipelines and keep operations running efficiently.
Expanding your capabilities into similar product lines is an obvious choice.
The talent challenge is critical, especially when backlog shrinks. Contractors are:
Some companies are taking diversification to a global level, acquiring businesses in Europe, the Middle East, and the UK. By expanding internationally, these contractors mitigate risks tied to a single market’s slowdown.
The UK contracting market has faced significant challenges, with well-known names like Charles Henshaw and Norman Underwood entering administration. Yet, opportunities remain for those willing to think differently.
Italian and Eastern European contractors like Permasteelisa and Staticus are thriving by leveraging high-end engineering and design teams based abroad to deliver in London.
UK contractors should consider relocating design and engineering bases to talent-rich, cost-effective regions to gain a competitive edge.
The façade contracting industry in 2025 is at a crossroads. Contractors who embrace diversification, invest in global talent, and adapt to market changes will emerge stronger. Whether you're looking to expand into new regions, diversify your offerings, or optimize your operations, the time to act is now.
If diversification is part of your 2025 strategy, let’s talk. Our team is ready to help you develop a tailored plan to achieve your goals. Contact us today.