Introduction

2025 was a year set out for transformation, though it was not in the way any of us expected. Workload-wise, it wasn’t the year we had hoped for and it proved to be anything but predictable. 

January set the tone with catastrophic fires consuming Southern California. Those were caused by the “perfect” conditions. Shortly after, we saw additional fires spread across the United States well into the late spring and early summer. Then came the flooding. We usually associate spring with rain, but we saw regions hit that generally don’t see torrential downpours, let alone catastrophic flooding. With the first seven months of the year behind us, we prepared mentally, operationally and maybe even financially for an intense hurricane season, but the Saharan Dust had other plans.

We did not see a single hurricane this season in the United States. The activity we did see was minimal, and some called it hopeful, until we saw Hurricane Melissa hit Jamaica, Cuba and several other islands with Category 4/5 strength. 

Despite this year not being anything we thought it would be, we had roughly a $101B disaster year. Challenges still emerged. We saw workflow disruptions, layoffs, mergers and acquisitions and some businesses closing their doors. Though we saw some hardships, we were able to pivot and redefine who we are, what we do and why one of our greatest strengths is staying resilient.

As we look ahead, growth and market expansion remain at the forefront of the restoration industry’s future. It’s driven by technology adoption, evolving business models and new compliance requirements. 

Growth & Market Expansion

Our market size is still a bit unclear, but there are several data points that estimate the restoration industry is currently between $7.1 billion and $80 billion. We’re growing between 4% and 6% Compound Annual Growth Rate (CAGR). While this year was anything but a “normal” year, we’re still on track for strong growth. The global outlook projects us upwards of $100+ billion by 2030. That’s up to 8x of where we sit today. While we may have a hard time seeing that come to light, it’s possible. This year was a year that let us reflect on and redirect a few things like where we are going, what we are doing, how we do it and most importantly implementing and embracing new technology, AI and platforms.

 “I personally believe we will surpass $100B by 2030.” – Alex Duta, Albi

Key growth drivers for the restoration industry include capital investment, technology adoption and diversification into the commercial space and specialty services. We saw growth in the urban markets that are driven by property management compliance requirements and Environmental, Social and Governance (ESG) mandates. We saw consolidation amongst mid-sized firms and succession challenges that pushed several strategic exits.

Natural disasters were not what we expected this year. Natural disasters are inevitable, which is one of the most unfortunate parts of our line of work, but this year was anything but “regular”. If we have learned anything in the last five years, it’s not to bank on one season. 

“The pattern mirrors what’s happening across other home-service industries: more internal transfers and a struggle to prepare the next wave of leaders for ownership.” – Shauna Parsons, Violand Management Associates

Passing the Torch: A New Generation of Leadership

The restoration industry was built on the hard work of its founders. Today, aging ownership is driving a major shift — the transfer of responsibilities to a new generation. According to the Restoration Brokers of America, 65% of restoration business owners are baby boomers, with 80% of their wealth tied to their businesses. This isn’t just a transaction or simply handing over their business; it’s their life, legacy and identity.

Only 7% of restoration owners pass the torch to family, compared to 30% of family-owned businesses. The remaining 70% transitions to outside buyers, investors, or, occasionally, a loyal employee. Change isn’t a bad thing, but it can be disruptive, and our staff and customers are generally the first ones to feel it.

Industry data shows that 73% of small businesses plan to transition their ownership within the next 10 years, and generational ownership is projected to drop from 30% to a staggering 12% over time.

Generational Shifts & Workforce Trends

It’s no secret that Gen Z is reshaping the way we recruit. They’re bypassing traditional degrees for trade careers, valuing financial stability without debt and tech-enabled work environments. Their priorities are flexibility, purpose and rapid advancement, which often clash with their employer’s expectations. Industry events and conferences now spotlight strategies to bridge these gaps through culture, training and communication.

“Technology and AI aren’t just coming to restoration, they’re already here. The challenge isn’t adoption, it’s proper use. AI won’t instantly fix everything; it takes training, time and integration into workflows. Owners also need to recognize their team’s concerns, many fear AI is coming for their jobs and they may resist to protect themselves. As leaders, it’s our responsibility to facilitate safe adoption so teams feel empowered, not fearful.” – Jeff Diem, LEVLR

Breakdown by Service Type:

• Water Damage Restoration/Mitigation: Is still the largest revenue driver of the industry, but margins have tightened year over year. 
• Fire & Smoke Damage: With climate-driven wildfires and insurance complexities we’ve seen an uptick in demand for fire and smoke damage services.
• Contents & Specialty Cleaning: We’ve seen significant growth in forensic cleaning, contents cleaning/restoration and biohazard services due to the rise and awareness in health and safety standards. 
• Emerging Services: With heightened awareness, we’ve seen environmental remediation, ESG-driven waste management and sustainability consulting growing rapidly. 

Challenges we continue to see are the rising cost of materials, insurance pullbacks in high-risk regions and regulatory hurdles impacting the industry’s profitability.

As our services evolve and margins continue to tighten, technology is no longer optional. It is a necessity. From documentation and workflow automation to AI and digital platforms, we as an industry are reshaping how restoration businesses operate. 

Technology Innovations Driving Change

• Remote Monitoring & Documentation: Tools like Clean Claims, Kahi, Phoenix Dry and Tramex enable real-time job tracking, reducing disputes and improving compliance.
• Workflow Automation: Platforms like Albi, JobSight and JOC Analytics streamline scheduling and compliance, cutting cycle times.
• Estimate Accuracy: Tools like LEVLR and Rebuild leverage AI and image recognition to benchmark estimates and reduce friction with carriers.

“Remote monitoring isn’t just a tool—it’s the future of our industry. By combining live, unaltered Wi-Fi-based remote monitoring data with an easy-to-use field documentation software, teams can manage jobs in real time, increase transparency, reduce disputes and close data gaps. It’s a tech-forward approach that turns information into action and makes every project smarter and more efficient.” — Paul Silliman, Clean Claims

Once the documentation and compliance challenges are addressed, streamlining project management and scheduling help reduce cycle times. 

Workflow Automation

Platforms like Albi, JobSight and JOC Analytics streamline project management, scheduling and compliance while providing actionable data to reduce cycle times. However, technology is only as effective as the data entered, “Garbage in, garbage out” remains true. Missing critical job details or budget planning can derail your seamless workflow and delay claims.

Estimate Comparison & Accuracy

Estimating accuracy became a big focus in 2025. Tools emerged that allowed contractors to benchmark estimates against carrier versions and industry norms, flagging discrepancies instantly to help reduce friction during negotiations. Platforms like Rebuild leverage image recognition and predictive modeling for water, fire and mold damage scenarios, speeding up estimate creation.

One thing that won’t change even with technology is the human-centered estimating services we have in the restoration industry such as Elkmont Estimates, Encircle and Epic Estimates. They complement automation, bridging the gap between speed and accuracy and most importantly handle the administrative tasks associated with the claims process.

Emerging Trends & Outreach

• Rising deductibles are reshaping homeowner decisions.
• States like Colorado are pushing back against carriers excluding smoke, soot and odor damage during wildfires.
• Customer outreach is gaining momentum allowing us to bridge the gap with communication and customer expectations. 

AI & Outreach Automation

AI-powered platforms like KAS and Genius Outreach automate follow-ups, appointment scheduling and personalized outreach, freeing contractors to focus on production while maintaining high-touch communication.
 

“In 2025, artificial intelligence moved from a buzzword to an everyday tool for many small service businesses.” — John Monroe, Violand Management Associates

AI Adoption Trends

• AI use rose from 39% in 2024 to 55% in 2025 (Thryv).
• 58% of small businesses now use generative AI, and 82% of those increased workforce size (U.S. Chamber of Commerce).
• 68% of small businesses regularly use AI, with 28% using it daily (QuickBooks).
• Productivity gains of 15–40% in scheduling, dispatching and marketing (Cube Creative).

AI is now essential. From finance platforms like QuickBooks and Sage to CRMs like Albi, ServiceTitan and HubSpot, AI supports workflows, error correction and customer engagement. Training remains critical key for success, that means your teams need to stay up to date on the latest and greatest.

Compliance & Workforce Pressures

Labor shortages and compliance expectations are reshaping the restoration industry. In 2024, 94% of construction firms reported open positions, and the need for 501,000 additional workers (AGC/Arcoro). Restoration businesses now differentiate themselves through documented ethics, ESG alignment and verifiable compliance, not just capacity.

Procurement priorities have shifted. According to Deloitte’s 2025 Global CPO Survey, risk management and regulatory compliance have overtaken cost savings as top priorities. 

Carriers and property managers now require auditable proof of:

• Vendor licensing
• Insurance coverage
• Health & safety practices
• Environmental performance
• Ethical governance

Major carriers (Allianz, EMC, Lloyd’s, Liberty Mutual, Zurich) and property managers (CBRE, FirstService Residential, Greystar, JLL) enforce ESG standards and credential programs before the work ever begins.
 

“ESG has moved from corporate language to operational reality, defining how restoration firms manage waste, safety, labor fairness and transparent business conduct on every job site.” — Rob Curran, Violand Management Associates

Safety & Risk Management

Why Safety Matters

As the jobs we face grow to be more complex, with advanced drying systems, hazards and chemical exposure, risk management must remain a top priority. Implementing proactive safety audits, digital incident reporting and hazard prediction tools can help restoration contractors stay ahead of regulatory requirements.

OSHA data shows persistent gaps, even with growth and progress. Understanding these trends is critical for not only reducing injuries but avoiding costly citations.

OSHA’s Top 10 Most Cited Violations (FY 2024)

1. Fall Protection (1926.501): 6,827 violations
2. Hazard Communication (1910.1200): 3,121 violations
3. Ladders (1926.1053): 2,789 violations
4. Respiratory Protection (1910.134): 2,698 violations
5. Lockout/Tagout (1910.147): 2,655 violations
6. Powered Industrial Trucks (1910.178): 2,440 violations
7. Fall Protection – Training (1926.503): 2,243 violations
8. Scaffolding (1926.451): 1,959 violations
9. Eye & Face Protection (1926.102): 1,929 violations
10. Machine Guarding (1910.212): 1,676 violations

One thing to be aware of is that OSHA penalties can exceed $16,000 per violation. Not only does that lead to delays and carrier disputes it can also damage your reputation. 

Preventing The Risks

Most of the violations we see stem from a lack of preparation, not complexity. A Job Safety Analysis (JSA) or Job Hazard Analysis (JHA) should be the first step on every project. JSAs identify site-specific risks, outline strategies and ensure teams understand hazards before work begins. Routine safety audits combined with JSAs can prevent injuries, delays and even loss of life. One thing I personally learned this year is JSAs aren’t necessarily a key part of the day-to-day operations for people, which means this is one of the gaps we need to fill immediately. Staying proactive means, we can prevent things like workplace accidents and injuries from happening. 

Emerging Safety Technologies

• IoT Wearables: Real-time tracking of air quality, noise exposure, vital signs and more.
• Integrated Safety Checklists: Embedding JSAs into project management tools that help standardize your safety protocols.

These tools help reduce injuries, strengthen audit readiness and align your safety processes with ESG mandates.

Workforce Development & Training

To no surprise, labor shortages remained a major challenge, driven by inflation, generational shifts and evolving job expectations. Even though we didn’t see an active hurricane season, we still had catastrophic fires and flooding in the first seven months of the year. Which means, we need to have our teams filled and ready to work. On the other side of staying staffed we saw a demand in pay increased. Competitive pay is not always easy, it can be tough, construction and extraction industries saw a 5.8% wage increase, averaging $26.21/hour.
 

“Employers are struggling to balance pay expectations with profitability.” — Doug Hoffman, NORMI

Upskilling & Retention Strategies

Companies are investing in micro-trainings for both technical and soft skills, keeping their technicians in the field longer and still gaining the skills they need.  Industry certification program still remains a top priority, but with slowing down this year, cost and time were factored into the pivot in micro-training. 

AI-powered onboarding platforms like KnowHow provide step-by-step guides to help ensure SOPs are utilized and implemented consistently and they also help support career path initiatives. Retention strategies now highlight and focus on culture, employer branding and performance-based incentives.

 “A slower CAT season late this year in 2025 sparked renewed interest in training, particularly around technology adoption and financial literacy.” — Ben Justesen, DocuSketch

In 2026, we will see continued momentum around virtual and short form training sessions that help keep restoration contractors competitive. Beyond the initiatives within your business, there are legislative changes that are shaping the future of both the industry’s workforce development and training in the industry.

Restoration Industry Advocacy: 2025 Wins That Matter

2025 was a landmark year for restoration advocacy, delivering wins that strengthened workforce development, elevated professional standards and protected emergency services. From legislation that opens new career pathways to the formal recognition of our industry standards, these efforts reflect a growing commitment to compliance, consumer protection and contractor rights.

Workforce Development: A Game-Changer

The Freedom to Invest in Tomorrow’s Workforce Act, now law, allows 529 savings plans to cover certifications and credentialing programs, including licenses and testing costs. This positions certifications as viable career investments and opens new pathways for young professionals to enter restoration without incurring college debt.

 “This legislation positions certifications as viable career investments, opening new pathways for young professionals to enter restoration without incurring college debt.” – Robbie Bradshaw, IICRC

Recognition of Industry Standards

The IICRC secured a huge win with the ANSI/IICRC S520 Standard for Professional Mold Remediation codified into Virginia law. In total, there were eight pieces of legislation that referenced the IICRC Standards or Certifications in 2025, an all-time high. This formal recognition elevates the industry’s professionalism and ensures a consistent quality of care.

Consumer Protection & Licensing Reform

This year, several states tightened the licensing requirements and continuing education mandates, while others shifted toward public-private partnerships that help reduce fraud and litigation risk. These reforms protect both the consumers and contractors while promoting science-based guidance.

Emergency Services & Contract Reform

Extended cancellation periods in states like California and New Jersey posed risks for the need of urgent restoration work. RIA successfully amended NJ A551 to allow consumers to waive cancellation rights for emergency services, safeguarding contractors’ ability to respond immediately.

Carrier Collaboration

Carrier relationships remained a challenge this year. RIA launched its Carrier Relations Task Force, led by Mark Springer, CR, to foster the relationship and dialogue between restorers and carriers, aiming for fair practices and improved collaboration.

“In 2025, RIA’s advocacy work delivered real, measurable wins for restorers—protecting emergency services, preserving fair compensation and elevating the restoration profession at a time of mounting regulatory and financial pressures.” — Kristy Cohen, RIA

Industry Advocacy in Action Key Highlights

IICRC Advocacy Wins:

• Testified before multiple state legislative committees.
• Met with over 50 lawmakers nationwide.
• Hosted its 3rd Annual Educating the Advocates Symposium.
• Director of Government Relations, Robbie Bradshaw, ESQ., named to the National Institute of Lobbying and Ethics’ Top Lobbyists.
• Secured the inclusion of the ANSI/IICRC’s S520 Mold Remediation Standard in the National Defense Authorization Act, requiring its use for mold remediation in U.S. military housing.

NORMI Initiatives:

• Supported licensing frameworks and certification alignment for mold and IAQ professionals.
• Formed a strategic alliance with Change The Air Foundation to promote legislation confirming the value of credible training and certification.
• Formed its Medical Advisory Board in April to help enhance mold remediation standards and address health concerns in indoor environments. 

RIA Advocacy Highlights:

• Shaped the NCOIL model legislation on “fire chasing,” ensuring emergency restoration rights remain intact.
• Submitted a formal request for a dedicated NAICS code for emergency restoration services to improve data accuracy and policy development.
• Released the first-ever Prompt Pay Position Statement to accelerate fair payment practices in Canada.
• Launched VoterVoice Advocacy Hub, empowering members to influence legislation directly.

Restoration Industry Resilience Redefined

2025 proved that restoration is more than a business, it’s a lifeline for communities in crisis. From the unpredictable weather patterns to economic uncertainty, this year tested our industry, and some may say it pushed us to our limits. Even in the face of adversity, we saw the power of innovation, advocacy and adaptability.

Restoration contractors far and wide embraced AI-driven workflows, remote monitoring and compliance automation, proving that technology is essential. Workforce development surged with virtual and short form education/training, AI-powered onboarding and legislation like the Investing in Tomorrow’s Workforce Act. This opens doors for the next generation of restoration professionals. We saw safety start to evolve from reactive compliance to predictive prevention. 2025 provided us with a new lens, new mind set and new goals. 

Resilience isn’t about weathering the storm; it’s about building stronger systems before the storm ever hits. As we turn the page to 2026, the restoration industry stands at the intersection of technology, training and trust. This is how we define the future of the restoration industry. We lead with innovation and integrity. Moving from a fight or flight to a proactive mindset. 

Here’s to a year of transformation, and to the amazing opportunities that lie ahead.