More Insights on 2012

 

 

 

Michael Hovan

 

Quanex Building Products

 

Houston, Texas

 

As Window & Door prepared its annual forecast issue, industry executives shared their thoughts and predictions for the coming year in much more depth than could be gathered together in one article. In "More Insights on 2012," we present their detailed answers to questions about the coming year.

 

First, let’s start with the most general question for a forecast piece. What do you expect 2012? Will 2012 finally be “the year” we start seeing some turnaround, or is recovery further off than that?

We’re expecting a flat 2012. Because the underlying economic issues are not resolved—high unemployment, banks not lending and lack of consumer confidence—this will not be the year where we’ll see a turnaround. All of these things, combined with 2012 being an election year, are not helping improve the current economic situation.

What do you expect the biggest challenges for the industry will be in 2012?

The biggest challenges for the industry next year will be the ability to introduce new, innovative products while managing through another flat year. Also, we’re getting pressure to drive new designs that will meet Department of Energy (DOE) and Energy Star requirements.

OK, let’s break it down a bit…What does new construction look like in 2012?

Because of the current economic situation, we expect new construction to be flat next year.

What about remodeling/replacement work? What is likely to drive business in this segment?

Overall, we expect a similar amount of business from remodeling and replacement that we saw in 2011. We will see a slight uptick for remodeling and replacement work for our window units, nearly a 1.75 percent increase from 2011.

What’s going to be happening with energy efficiency in the coming year? Is the industry focus on ramped-up Energy Star requirements?

In the first half of next year, the DOE will announce the new 2013 standards for energy efficiency. We’re expecting to see stricter standards for energy efficiency, and we’re prepared to support our customers and help them meet these new requirements.

While the industry is chasing ways to keep up with the required energy performance, mostly through triple-pane products, Quanex has double-pane products (EnergyCore and MikronWood) that meet the same required energy standards while passing along savings to the customer.

On a (hopefully) positive note, do you see any particular product segments or geographic regions outperforming the industry as a whole?

Not really, we see vinyl and composite materials gaining traction at the expense of wood materials.

How much of an impact does lending (or lack thereof) have on the business? The National Association of Home Builders is making financing-related discussions one of its top priorities this year—are they on the mark?

The banks’ lack of lending has had a continued significant impact on the industry. Because banks seem particularly restrictive in qualifying potential borrowers, the banks have crippled businesses and consumers who really need the money to continue. What’s even more frustrating is that the banks have the money to lend to those who need it, but are choosing not to lend.

We support the NAHB’s efforts and believe it is one of the keys to bring back the market and make a direct impact.

For those who are buying, what window and door products are they selecting? What features are important?

Customers are looking for competitively-priced window and door products that are Energy Star rated, meeting the required lower U-value. 
Quanex is focused on innovating and developing products that optimize energy performance and we have a number of solutions for this.

Is your company likely to be hiring, laying off, or maintaining the status quo in 2012?

We plan to maintain our workforce in 2012.

Do you have anything else to add?

Because Quanex is internationally diversified (UK, Canada, Australia, New Zealand, Asia), it has helped the company’s profitability and ability to invest in new technologies despite the poor economic environment. In the last year, Quanex has planned for the future with recent acquisitions and has taken the necessary steps to be more efficient, including adding a new IT infrastructure.

 

Window & Door's "More Insights on 2012" also features questions and answers about the coming year from the following people: