Challenges Ahead for Contractors

The report indicates that while contractors are hopeful about future revenue increases, they face persistent challenges related to cost management and labor shortages. “Persistent cost inflation and labor constraints continue to challenge contractors as they look ahead to the new year, and they likely won’t go away any time soon," stated Vishal Laddha, Senior Director of Exterior Strategy at ServiceTitan. He emphasized that to achieve profitable growth, contractors must enhance their efficiency and explore technological solutions to streamline operations.

Adoption of AI and Technology in the Industry

Despite recognizing the potential benefits, contractor utilization of AI and large language models (LLMs) remains low. According to the report:

• Only 4% of contractors utilize AI features in their Customer Relationship Management (CRM) systems.
• A mere 25% use external LLM tools like ChatGPT or Gemini.

This underutilization represents a missed opportunity for increased productivity, especially as many contractors report profits being squeezed by rising operational costs.

Cost Pressures Impacting Profitability

Survey data indicates that significant financial pressures are threatening contractor growth:

• 39% of contractors cite rising labor and overhead costs as major threats.
• 34% face ongoing skilled labor shortages.
• One quarter worry about an economic recession affecting their business climate.

In response, contractors are focusing on cost optimization efforts, with 60% prioritizing labor costs and 45% concentrating on materials.

Competitive Advantages in the Roofing Industry

Differentiation is key in the roofing market, where the top three competitive advantages identified by contractors are:

• 59% focus on reputation.
• 47% emphasize transparent communication.
• 43% highlight exceptional customer service.

Despite these efforts, only 16% of contractors follow up with homeowners on the same day for unsold estimates, indicating a substantial gap in customer engagement practices.

Investments in Technology and Future Trends

The report also underscores a shift towards technology adoption as contractors aim for improved efficiency. Top decision drivers for technology investments include:

• 47% prioritize robust production features.
• 29% value ease of use.
• 24% require workflow configurability.

Looking ahead, surveyed contractors see opportunities in customization (40%), expanding into new trades (36%), and advancing digital transformation initiatives (34%).

Conclusion

The findings from the ServiceTitan 2026 Roofing & Exterior Market Report reflect both optimism and challenge within the industry. As contractors navigate rising costs and labor shortages, leveraging AI and technology will be crucial for enhancing productivity and achieving sustainable growth. Those interested in a deeper dive into the report's findings can download ServiceTitan’s full report.

About ServiceTitan

ServiceTitan is a cloud-based software platform that empowers trades businesses with the tools necessary for operational success and improved customer experience. As an industry leader, ServiceTitan is committed to equipping tradespeople amid increasing technological demands.