Sealcoating-only sales for the 2023 Sealcoating 50 totaled $186,110,524 compared to last year's $150 million, and $108 million in 2021. This signifies the completion of sealcoating segmented sales recovery to pre-pandemic levels, even with a smaller qualifier list of 50 instead of 75 in 2020 that generated $161 million. This year's growth of $36 million (approximately 19%) isn't as high as last year's jump of $42 million in sales, but isn't so far off to be considered anomalous.
From a historical perspective, sealcoating-only sales have experienced very high peaks in the last several years. While this year's $186 million is the highest total in the last five years, it is dwarfed by the 2016 ($201 million) and 2015 ($249) sales totals. Those figures were seen a bit unusual, even at the time, and possibly due to adjacent market factors, but the current status seems to indicate a "normal" representation or ceiling of regular growth.
While the Sealcoating-only segmented sales previously sat in last place compared to the other 3 stand-alone categories, this year the Sealcoating 50 trail only paving and pavement repair. Listed form highest revenue per segment to lowest, paving only sales are at $913 million ($742 million last year), pavement repair-only sales is at $315 million ($247 million last year), sealcoating, and then, lastly, striping-only is at $129 million ($534 million* last year).
*Last year's reported striping totals were skewed by data later deemed inaccurate.
Total sales for all the work completed by the 2023 Sealcoating 50 was $1,590,214,734 in total sales compared to $1,601,293,233 in 2022. A small drop of approximately $11 million dollars, and a market contraction of approximately 0.7%, while still significantly topping the 2021 total of $930 million, potentially signaling the sector remains in a good economic state.
Interestingly, however, sealcoating-only sales represented just 22% of the overall sales of the Sealcoating 50, down from the previous two year's of 25% and 24% respectively. The remaining sales represent a diverse mix of pavement maintenance-related work including:
48 companies perform striping work
45 companies perform pavement repair work
44 companies perform paving work
None of the 50 qualifying companies on the list performs exclusively sealcoating work, however, three did generate 90% of sales from sealcoating-only work.
Big Boost To Profit Margins
Last year's report was that profit margins were relatively steady. The previous 4 stats on contractors reporting more than 15% margins were 39% (2019), 46% (2020), 44% (2021), and 43% (2022). This year the percentage of contractors reporting the highest margins rose by 13 points to 56%. This is a huge leap.
4% reported margins less than 3% (0% last year)
10% reported margins between 3-5% (6% last year)
8% reported margins between 5-10% (22% last year)
22% reported margins between 10-15% (30% last year)
56% reported margins of greater than 15% (43% last year)
Clearly, the two biggest shifts this year were at the top end, and right smack in the middle, 13 and 14 point shifts respectively. The other three ranges saw more modest changes. It's difficult to ascertain why these types of shift occurred, but, one thing is for certain, the sealcoating segment has become highly profitable for many more contractors.
Where the Sealcoating 50 Work
It's no secret, nor surprise that the vast majority of this work is located off-road, with every company in the Sealcoating 50 reporting at least some parking lot work. For that matter, 21 out of 50 companies (42%) reported that at least 90% of their time was spent working on parking lots. That has grown from steadily from 36% in 2022 and 24% in 2021.
The rest of the time, only 64% of companies reported generating sales from driveway work (up from 48% last year), 70% said they worked on streets (over the 52% last year), and 16% said they did some work on highways (rising from just 9% last year).
The Sealcoating 50's Customers
All 50 sealcoating contractors work for commercial/industrial customers
45 companies do work for multi-family residential customers
34 contractors work for municipal clients
23 contractors work for single-family residential clients
Replacing the Sealcoating 50's Equipment
In a somewhat surprising turn, 9 different companies reported they could replace their fleets for less than $500,000. That represents a fairly low level of capitol investment for a segment of the industry that is producing extremely high and consistent profit margins. The other 41 companies on the Sealcoating 50 said it would require more than $1 million, and 29 of those said more than $2 million to replace all their equipment.
