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Who are NAHB’s Associate Members?

Special Studies, June 1, 2017
By Carmel Ford
Economics and Housing Policy
National Association of Home Builders
Report available to the public as a courtesy of HousingEconomics.com

Every year since 2008, the National Association of Home Builders (NAHB) has conducted an annual census that collects company and demographic data from its members. It subsequently publishes these results here in HousingEconomics.com.

This article updates previous studies with results from the 2016 annual census on the characteristics of NAHB’s associate members. Associate members are involved in a wide range of support industries and professions including, among others, trade contractors, manufacturers, retailers/distributors, designers, and architects. Builder members are defined as those whose primary business is single-family home building, multifamily building, residential or commercial remodeling, commercial building, land development, or manufacturing of modular/panelized/log homes. At the end of 2016, 81,512 associate members represented 68 percent of the total NAHB membership. Builder members make up the remaining 32 percent and an article highlighting them can be found here.

41% of Associate Members are Subcontractors/Specialty Trade Contractors

Associate members could self-identify as one of 42 specialties when selecting a primary activity. These activities are grouped into 6 categories: 41 percent of associate members are subcontractors/specialty trade contractors, 13 percent have a professional specialty, 11 percent are retail dealers/distributors, 9 percent work in financial services, and 5 percent are wholesale dealers/distributors. Twenty percent listed some other associate activity as their primary business activity, such as manufacturers, real estate, and utilities (Exhibit 1).

Exhibit 1. Share of Associate Members by Primary Business Activity - 2016

The share of associate members involved in any one activity shifted by 1 percentage point or less from 2015 to 2016 (Exhibit 2). When the activities are grouped into the broader categories, some trends can be detected over time. The share of associate members who are in subcontracting/specialty trade contractors has increased in the last couple of years, going from 36 percent in 2014 to 41 percent in 2016. During the same time period, the shares of associate members reporting their primary activity either as professional specialties, financial services, or as retail or wholesale dealerships/distributorships, have not changed significantly, while the share reporting “other” activities fell from 23 percent in 2014 to 20 percent in 2016.

Exhibit 2. Primary Business Activity – HISTORY

Approximately Half of Associates Have 10 or More Employees

In 2016, associate members had a median[1] of 10 employees on payroll, unchanged from 2015, but higher than the median of 9 employees in 2013 and 2014. Six percent of associate members had 1 employee, 18 percent had 2 to 4 employees, 22 percent had 5 to 9, 36 percent had 10 to 49, 6 percent had 50 to 99 employees, and 10 percent had 100 or more employees. One percent had no payroll at all (Exhibit 3).

Exhibit 3. Total Number of Employees on Payroll - 2016

The median number of employees on an associate member’s payroll varies significantly by the company’s primary activity. For example, for both financial services companies and wholesale dealership/distributorships, the median number of paid employees in 2016 was 22, compared to a median of 8 employees among those in professional specialties.

Median Dollar Volume Dips Slightly in 2016

The median dollar volume of associate members was $2.4 million in 2016, slightly lower than the median of $2.5 million in 2015. Twenty-three percent of associate members reported a 2016 dollar volume of less than $500,000, 16 percent reported between $500,000 and $999,999, 31 percent between $1.0 million and $4.9 million, 10 percent between $5.0 million and $9.9 million, 5 percent between $10.0 million and $14.9 million, and 15 percent reported their dollar volume in 2016 at $15.0 million or more (Exhibit 4 & 5).

Exhibit 4. Annual Revenue - 2016

Exhibit 5. Annual Revenue – History

Levels of revenue also vary widely across primary activity categories. For example, financial service and wholesale dealership/distributor members respectively reported medians of $12.7 million and $9.2 million in 2016 revenue, compared to $1.0 million for both subcontractor/specialty trade contractor and professional specialty members, $2.8 million for members involved in some other associate activity, and $4.3 million for retail dealership/distributor members.

Age, Race and Ethnicity

The median age of NAHB associate members in 2016 was 55 years. Twenty-two percent of associate members are younger than 45 years of age, 29 percent are 45 to 54, 35 percent are 55 to 64, and the remaining 14 percent are 65 or older (Exhibit 6). The median age of associate members has been trending upwards: it was 50 in 2008, 52 in 2009 and 2010, 53 in 2011, 54 from 2012 to 2014, and then 55 in 2015 and 2016 (Exhibit 7).

Exhibit 6. Age - 2016

Exhibit 7.  Median Age - HISTORY

The vast majority of NAHB’s associate members are White. Ninety-five percent of members identified themselves as White, alone; 1 percent as Black or African-American, alone; 1 percent as American Indian or Alaska Native, alone; less than half a percent identified as either Asian, alone; or Pacific Islander, alone; while 2 percent identified themselves as some other race. One percent of associate members selected more than one race (Exhibit 8). In terms of ethnicity, 4 percent of associates are of Hispanic, Latino, or Spanish origin (Exhibit 9).

Exhibit 8. Race

Exhibit 9. Ethnicity: Are you of Hispanic, Latino, or Spanish origin?

Half of Associate Members Have a Degree

Since 2008, the share of NAHB associate members with a college or advanced degree has been at or above 50 percent. In 2016, 2 percent reported that they did not finish high school. Fourteen percent completed high school, 8 percent have career technical training, 25 percent have had some college education, 39 percent finished college, and 11 percent have an advanced/graduate degree (Exhibit 10).

Exhibit 10. Education - 2016

The share of associate members with a college or advanced/graduate degree varies across companies’ primary activities. Eighty-two percent of professional specialty members have a degree, compared to 32 percent of subcontractor/specialty trade contractors, 50 percent of retail dealership/distributorship members, 56 percent of wholesale dealership/distributorship members, 61 percent of members in some other associate activity, and 69 percent of members in financial services.

Half Have Been Members for a Decade or More

In 2016, associate members reported belonging to NAHB for a median of 10 years. Twenty-five percent have been members for less than 3 years, 25 percent for 3 to 9 years, 24 percent for 10 to 19 years, and 26 percent for 20 years or more (Exhibit 11).

Exhibit 11. Tenure as NAHB Member - 2016

A profile for each category of associate member is available in the “Additional Resources” box at the top of this article.

[1]This article will use median values, as averages can be inflated by large companies. Medians are largely unaffected by these outliers because it calculates the middle most value, not taking into account how high the highest values are. An increase in a median’s value indicates an overall shift of all the associate members, not a change in a few large associate members.

For more information about this item, please contact Carmel Ford at 800-368-5242 x8503 or via email at cford@nahb.org.

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