Industry Spotlight: Damage Restoration Services in the US

The damage restoration services industry plays a crucial role in helping residential and commercial property owners recover from a wide range of disasters, from natural calamities like floods and wildfires to more localized events such as mold infestations or water damage. Operators in this industry provide essential contracting services to repair and restore damaged property, safeguarding both the functionality and safety of structures. Their work spans emergency response, cleanup, and rebuilding efforts, making them indispensable in the wake of environmental and man-made crises.

In recent years, the growing impacts of climate change have significantly increased demand for restoration services. Rising temperatures, stronger storms, wildfires, and flooding events have driven more households and businesses to seek these services. However, repeated high-cost disasters have prompted some insurance and reinsurance companies to withdraw coverage from high-risk areas, limiting funding options for property owners. The onset of the COVID-19 pandemic further disrupted the industry, as high unemployment, inflation, and rising interest rates led to the postponement of nonessential restoration work. As financial conditions improve, an uptick in consumer spending is expected to support industry growth.

The industry is heavily shaped by environmental and safety regulations, particularly those from the Environmental Protection Agency (EPA) relating to mold remediation. These guidelines dictate cleaning procedures, protective equipment requirements, and operational best practices to ensure safe and effective restoration. Compliance with these regulations is both a necessity and a differentiator, as customers increasingly look for service providers who meet rigorous safety and environmental standards.

Financially, the industry is stable with steady growth prospects. In 2024, annual revenue was estimated at $7.1 billion, with a projected average annual growth rate of 1.5% through 2029. The sector employs over 112,000 people, with job growth expected to average 2% per year over the same period. The number of businesses—currently about 60,020—is forecast to rise by 3.1% in the next five years. Profit margins have held steady at around 6.3%, translating to about $7,443 per business, with total industry profits reaching $446.7 million from 2019 to 2024.

Demand drivers include climate-related events, housing market growth, and general economic conditions that influence consumers’ ability to afford restoration services. An increase in housing activity typically correlates with higher demand for damage restoration, as newly purchased or renovated properties often require immediate or preventive repairs. The industry’s ability to quickly respond to these needs is a key factor in sustaining customer trust and market share.

Looking forward, the damage restoration services industry is well-positioned for steady growth but faces challenges tied to insurance coverage limitations, climate volatility, and economic fluctuations. Companies that can streamline operations, maintain regulatory compliance, and expand service offerings to meet emerging risks will be better positioned for success. Partnering with advisors like Blue Sky Exit Planning can help restoration businesses benchmark performance, identify opportunities, and strategically position themselves for long-term value creation.

For a deeper dive into the key takeaways and to see how your business compares to industry benchmarks, contact Joe at Joe@blueskyexitplanning.com.

Citation:Pigott, M. (2024). 56171 Damage Restoration Services in the U.S. Industry Report. IBISWorld Industry Reports. https://www.ibisworld.com/

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