Taking the Pulse of the Industry from Around the Country

by Tom Luby, owner of Profit Builders International

At the beginning of each year, Fence News USA asks me to assess the previous year and project what the future year might hold for fencers across America.

To that end I reached out to several fence industry friends and clients from different parts of America about how things look from their perspective. Below are unique views from their vantage point and helpful advice we can all take to heart.

“2023 has been another great year for Kansas Fencing. 2022 was a record year for us with sales up over 40% from 2021. So far, 2023 is a dead heat from where we were at the same time last year and with the current backlog, it appears we will match 2022 numbers when the year is done.

We have some nice projects lined up that should get us through the winter season and into the start of spring. We also have a handful of industrial projects that are pretty good size that we are in the running on. If we can land a couple of these larger projects, we should be in great shape for a strong 2024 season. Our profit margins have been steady at around 40% gross (18% net).

We are well diversified with the mix of residential, commercial, industrial, temporary fence, material sales, and automatic gate operators. If one area slows down, one of the other revenue streams always seems to increase making our sales volume stable. Industrial/commercial work is steady. Residential is down 4-6% and temporary fence and material sales are up around 20%. It's always a good sign with temporary fence increases. That tells us we should see an increase in industrial/commercial projects next year.”

Dirk Henderson
Kansas Fencing in Topeka, Kansas

“Business has done quite well over 2023. Not as busy as the “COVID years”, but still steady flow of work. Fence companies continue to pop up everywhere, so we just focus on setting our company apart.

We’re down to five crews for the winter months, but still holding a six-week backlog. I have a feeling business is going to continue to slow down due to inflation. We will most likely keep the downsize and try to cut expenses as needed to remain in a healthy spot.

Residential has slowed down a little bit, but commercial has been steady. Bufftech recently sold to Barette Outdoor Living so we’re still unsure where that ship is headed. We haven’t heard much besides “business as usual." I heard some products are being discontinued but hope there are no drastic changes. Vinyl and chain link seem to remain our most popular sellers. I don’t see that changing anytime soon. People like peace of mind having little to no maintenance.”

Kim Miller
Miller Fence in Worcester, Massachusetts

“The fence business overall sales have steadily slowed down compared to last year by 20%. In 2023, we are about the same as we were pre-pandemic in revenue, this is not considering the increase of cost from the suppliers (fence material costs have increased due to inflation, something that did not happen pre-pandemic), as well as fixed expenses such as rent, utilities, etc.

Another change we face is the coming and going of multiple unlicensed companies who undercut the market by giving unsustainable prices to which any established business cannot compete with. This leads to an apparent short-term solution for customers, but then they face after-the-fact installation problems. Most of these start-up companies are no longer in business. This results in a spike in repair requests. Our backlog is three to four weeks compared to six to eight weeks from last year. There is no question that sales are declining in the fence industry as well as other industries.

My projections are that suppliers will be forced to reduce their prices due to slower demand. This will translate into fence prices being more affordable for customers.

I expect sales volume to be lower in 2024 and if fence companies fail to adjust and evolve with the market, this could lead to business liquidity. It is important then, to strengthen the business from within to be better prepared, and to work on innovation that will ultimately benefit the customer.

I have not seen any major changes in the industry. In central Florida PVC/vinyl is the top seller followed closely by aluminum, chain-link and wood. 80% of our sales are residential, while the other 20% are commercial. The focus of residential fence is to keep the property secure, embellish it or keep small children and pets in the yard with no risk of running outside.”

Danny Rodriguez
Fence Depot in Orlando, Florida

“I consider 2023 to be a very solid year for us. We are currently 6% ahead of goal and have plenty of work on the books to finish the year strong, at above goal. Close rates for 2023 are also well ahead of goal, providing for a substantial backlog created in 2023 alone. Couple this with a very strong backlog coming into 2024 and we’re in a very good position.

We have started seeing residential demand slow down dramatically, paralleling the federal government raising of the interest rates. Since we focus more on commercial work, I’m confident we will be able to bridge the gap from a weak residential market, but we are going to have to be very intentional in doing so. It won’t come easy. Overall, I’m cautiously optimistic that 2024 will provide a solid year for us.

No real changes in product mix this year. PVC has softened with oversupply, which helps consumers make the jump from wood to PVC. Overall, commercial chain link seems to be the staple in our market.”

Bobby Batchelor
Seegars Fence Company,
headquartered in North Carolina

“We did ok in 2023. Our residential and private industrial work dried up so we are cautious in our forecast for 2024.

We are heavy in several segments that we expect to continue to do well but overall, we expect a flat to slower 2024, especially as it pertains to residential.

We are doing a lot of chain link and agricultural fence. Also, a fair amount of industrial steel. In backyards, we’ve seen a stable mix, no drastic changes.”

Kevin Hohe
CNI Fence in Chicago, Illinois

“We have done well considering the threats to our economy. We have moved more into commercial work this year, which has yielded high profit margins. Our residential market is down by 30% and overall, the number of jobs completed is down, but we will have a 10% increase in sales volume.

We are expecting a strong start to the new year as many commercial jobs are going through the bidding process. We are also starting to work with a few HOA management companies. I do see residential fencing continue to be slow.

As far as product mix, it has been the same. Residential sales down 30%, commercial work up 50%. With commercial work, chain link is strong. Wood and aluminum have always been our bread and butter.”

Gary Meyer
Accent Fence in Atlanta, Georgia

“Our business has been strong, and we were able to grow in sales numbers. We have experienced a major push on labor costs over the past year and at this time I do not see this getting better over the next year. Employees are seeing what the large unions are getting for pay raises since they are public. This is helping push wages up. We will have to readjust our labor rates again in the first quarter of next year.

Equipment costs have skyrocketed in the past year, and we will also have to watch where these items go. A skid loader that we purchased three to four years ago for $65,000 are now $105,000. This is also true with trucks. We have had to run our trucks longer that what we normally do, due to the fact new trucks have been extremely hard to get and the prices on these have gone from around $56,000 for a cab chassis truck to $79,000 to $83,000 for the same truck equipped the same way.

Our backlog is good for next year. We are seeing a good amount of work looking forward in the commercial side of the business and the residential work has slowed up by quite a bit in the past six months. Leads on the residential side are down by roughly 30 - 40%. This we expected as we experienced record years during COVID. The lower end residential customers are being priced out of the market on the lower end chain link fences but the higher end residential clients are still spending on projects so we are see the high end product lines moving better at the moment.

Residential sales are slowing in the lower categories such as galvanized chain link and vinyl coated chain link compared to the past two years, but that is what we expected for the year. The high-end products seem to keep going as these customers tend to have money to spend.

Commercial work is still strong and hasn’t showed signs of slowing down in the next year in most commercial or industrial market segments at this time although we have been starting to see some very large projects in certain segments of the commercial and industrial market get put on hold or a couple of projects got halted due to customers budget cuts in the past two months.”

Anonymous in Midwest

Thank you to everyone who participated in my fence industry inquiry. There are a lot of smart, talented and astute fencers out there and your input is much appreciated.

The COVID pandemic-driven residential windfall of work is all but over. Residential demand has softened while commercial and industrial work is on an uptick, and this trend will probably continue well into 2024 and beyond. It appears that residential work is off by roughly 30% across the board and commercial work may be up by about the same.

Naturally, a big factor for next year and beyond will be inflation and the overall health of the economy. I feel we have been living in an economic bubble for several years with the excess cash the federal government has plied into the US economy. I think that excess cash is finally being flushed out of the system and the economic recovery (as the physical pandemic recovery was) can and probably will be difficult. This next year will probably be a challenge.

I think Danny Rodriguez from the Fence Depot in Orlando put it quite succinctly when he advised businesses to strengthen from within and to promote innovation to benefit the customer.

God bless all our loyal readers and we wish you all a safe and prosperous 2024.

Tom Luby has helped hundreds of contractors within the fence industry achieve success with maximum profitability and efficiency. With over 25 years of experience consulting in the fence industry, he developed the “Roadmap for Success”, a program that can help contractors succeed. The program is available on CD, along with the sales and marketing guide “The Close” by contacting him at:

Profit Builders International
3421 10th Lane West, Palmetto, Florida 34221
www.profitbuilder.org | [email protected]
941-981-3677