Despite persistent cost pressures and labor constraints, a majority of roofing and exterior contractors are entering 2026 with cautious optimism, according to a new market report from ServiceTitan.

The 2026 Roofing & Exterior Market Report, released Jan. 14 by ServiceTitan, found that 75% of surveyed contractors expect revenue growth this year, while 74% anticipate higher profits. The study surveyed more than 1,000 residential and commercial roofing-focused companies offering services such as gutters, siding, windows, metal roofing, doors, garage doors and restoration.

However, profitability remains constrained across the sector. One-third of respondents reported EBITDA margins between 6% and 15%, underscoring the challenge of sustaining growth amid rising costs.

“Persistent cost inflation and labor constraints continue to challenge contractors as they look ahead to the new year,” said Vishal Laddha, senior director of exterior strategy at ServiceTitan. “To grow profitably in this environment, contractors have to adjust their playbook and focus on efficiency, smarter resource allocation, and technology that helps them do more with less.”

Cost pressures dominate contractor concerns

Rising labor and overhead costs were cited by 39% of respondents as the top threat to business growth, followed by skilled labor shortages (34%) and concerns about an economic recession (25%). In response, contractors are prioritizing cost controls, with 60% focused on optimizing labor expenses, 45% targeting material costs, and 41% working to improve marketing efficiency.

AI adoption lags despite efficiency focus

While efficiency is a top priority, the report found that most contractors have yet to adopt artificial intelligence tools that could help reduce administrative burdens and improve productivity.

Only 4% of surveyed contractors reported using AI features embedded directly into their customer relationship management (CRM) systems, and just 25% said they use external large language model (LLM) tools such as ChatGPT or Gemini. Nearly 79% reported not using AI or external LLMs at all.

Adoption is highest among mid-market contractors and companies operating for 15 years or more, but overall usage remains limited. According to the report, this gap represents a significant opportunity for contractors to leverage native AI tools that can analyze business data, automate workflows and improve decision-making.

Differentiation hinges on reputation and responsiveness

As competition intensifies, contractors say differentiation is increasingly tied to professionalism and customer experience. Reputation ranked as the top differentiator for 59% of respondents, followed by transparent communication (47%) and exceptional customer service (43%).

Speed of follow-up remains a challenge. Only 16% of contractors reported consistently following up with homeowners the same day on unsold estimates, even though fast response times are increasingly expected. While 67% have adopted same-day follow-up practices, nearly one-third have not, pointing to ongoing gaps in process and technology.

Technology investments shift toward operational scale

The report shows accelerating technology adoption, with contractors favoring platforms that reduce friction and support end-to-end workflow orchestration. The top decision drivers for technology purchases include robust production management features (47%), ease of use (29%), and workflow configurability (24%).

Diversification and insurance work shape growth strategies

Looking ahead, contractors identified customization (40%), expansion into new trades (36%), and digital transformation (34%) as the biggest growth opportunities in 2026.

Insurance work remains a significant but complex segment of the roofing market. Forty percent of respondents participate in insurance-related projects, yet many cited claims complexity (47%) and adjuster delays (36%) as major operational challenges—areas where the report suggests AI-enabled tools could help streamline estimates and reduce administrative delays.