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Architecture, Engineering, and Related Services [NAICS 5413]
Architecture, Engineering, and Related Services [NAICS 5413]
Architecture, Engineering, and Related Services [NAICS 5413]
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<strong>NAICS</strong> <strong>5413</strong>50-BUILDING INSPECTION SERVICES<br />
<strong>NAICS</strong> Description:<br />
This industry comprises establishments primarily engaged in providing building inspection services.<br />
These establishments typically evaluate all aspects of the building structure <strong>and</strong> component systems<br />
<strong>and</strong> prepare a report on the physical condition of the property, generally for buyers or others<br />
involved in real estate transactions. Building inspection bureaus <strong>and</strong> establishments providing home<br />
inspection services are included in this industry.<br />
From the US Census<br />
SMALL BUSINESS MARKETPLACE<br />
The marketplace for Building Inspection <strong>Services</strong> can be bifurcated into commercial building<br />
inspection (18%) <strong>and</strong> residential home inspection (48%) (Culbert, September 2011). Although these<br />
two industries fall under Building Inspection <strong>Services</strong> they are very different <strong>and</strong> one should be<br />
careful when speaking generally about Building Inspection <strong>Services</strong> (Personal communication with<br />
Claude McGavic (Executive Director of National Association of Home Inspectors), April 23, 2012).<br />
Housing inspection covers residential buildings up to 4 units <strong>and</strong> is often performed by individuals<br />
who own their own business (sole proprietorships represent 70% of the industry (Culbert,<br />
September 2011) or are part of a small firm. Many home inspectors are males between 45 <strong>and</strong> 65<br />
<strong>and</strong> for many this is a second career. In many states there is little if any regulation of home<br />
inspection <strong>and</strong> a home inspection report is not a pass/fail but instead a description of the dwelling<br />
<strong>and</strong> its status (Personal communication with Claude McGavic, April 23, 2012).<br />
Conversely, commercial building inspection covers larger buildings that are commercial in nature or<br />
that house many persons. Commercial building inspection is often performed as a service by larger<br />
architectural or engineering firms as well as municipalities or municipal contractors. State <strong>and</strong> local<br />
regulations are stronger in the commercial space.<br />
INDUSTRY OUTLOOK<br />
As the national housing market begins to improve <strong>and</strong> liquidity returns to the market, new<br />
construction <strong>and</strong> existing homes sales will help drive dem<strong>and</strong> for building inspection services.<br />
Overall, the Building Inspection <strong>Services</strong> marketplace is expected to grow at a rate of 5.5% through<br />
2016. Job growth is expected to be 18%, which is average <strong>and</strong> total revenue in 2011 was $2.3 billion<br />
(Bureau of Labor Statistics, 2012; Culbert, September 2011).<br />
CHALLENGES<br />
For the Home Inspection sub-industry the main challenges being faced are because of the industry’s<br />
heavy dependence on the health of the housing market <strong>and</strong> the value of homes. Because housing<br />
inspectors primarily inspect houses prior to sale, during the housing market crash <strong>and</strong> subsequent<br />
recession, the industry has been very turbulent <strong>and</strong> this has increased competition thereby lowering<br />
20
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