SIC 1796 Installation or Erection of Building Equipment, Not Elsewhere Classified

 
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SIC 1796

Special trade contractors primarily engaged in the installation, erection, or dismantling of miscellaneous building equipment make up this industry, which encompasses numerous firms that offer a wide range of services. Common activities include the installation, repair, and dismantling of conveyor systems, dumbwaiters, dust collecting equipment, elevators, incinerators, industrial machinery, power generation devices, revolving doors, and vacuum cleaning systems.

NAICS CODE(S)

235950

Building Equipment and other Machinery Installation Contractors

Businesses classified in this industry include more than 4,500 establishments, according to the U.S. Census Bureau. Most contractors in this industry rely heavily on new commercial, industrial, and institutional construction. Industrial buildings account for nearly one-third of the value of construction work done by this industry, followed by office buildings and other commercial buildings.

When building markets boomed during the mid-1980s, most specialty contractors realized healthy growth in billings and profits, and demand for items such as industrial machinery, elevators, and revolving doors increased. Contractors in this business, however, have to cope with the extremely cyclical nature of the nonresidential construction market. For example, industrial building construction expenditures in the United States advanced from $15.0 billion in 1987 to $23.8 billion in 1990. However, from 1991 to 1993 this category fell annually, bottoming out at $19.5 billion in 1993. During the mid-1990s the industrial building market bounced back, reaching $21.1 billion in 1994 and $24.1 billion in 1995.

A decade later, all commercial construction was rising after having been dwarfed by housing starts from 2003 to 2005. All nonresidential building activity edged up 0.3 percent, to a record annual rate of $303.5 billion in 2005, and was projected to increase further by 12 percent in 2006, surpassing $343.0 billion. Office construction spending increased 13 percent in 2006, topping $50 billion, but starts increased only marginally because the office market vacancy rates remained around 16 percent, as they had been since 2003. Between 1999 and 2003, office vacancy rates jumped from 8.9 percent to 16.5 percent, and spending on office building construction slowed from $47.5 billion in 1999 to $39.0 billion in 2003.

These cycles profoundly impact contractors in this...

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