Another Year Before Window Sales Recover

Residential product shipments expected to decline once again in 2009, with gradual upturn beginning in 2010
A presentation from the American Architectural Manufacturers Association and the Window & Door Manufacturers Association
June 10, 2009
FEATURE ARTICLE | Statistics

Continuing on the downward trend that started in 2006, window sales are expected to drop another 23 percent this year, according to a new report from the American Architectural Manufacturers Association and the Window & Door Manufacturers Association. Although stimulus programs on both the new construction and remodeling/replacement side may have an impact, the latest study does not see the residential market growing until next year.  

The nonresidential market, meanwhile, is expected to continue weakening into 2010. Prepared by Ducker International, the AAMA/WDMA 2008/2009 U.S. Industry Statistical Review and Forecast sees demand in that segment slipping about 15 percent this year and another 13 percent  in 2010 before it begins rebounding in 2011.

RESIDENTIAL MARKET
Total housing starts were at their lowest level in nearly 40 years in 2008, but 2009 looks worse, according to Ducker. Starts are expected to drop by nearly 42 percent as both single and multifamily starts decline significantly. Some improvement is expected beginning next year, but the total starts are not expected to break the one million mark until 2011, and they remain well below the peak levels of 2004 and 2005.  

Single family starts showed the largest drop in 2008, declining by 40.5 percent, according to the AAMA/WDMA report. Multifamily housing starts and manufactured home shipments were down, but the drop was not as dramatic. Regionally, the West has seen the steepest declines, followed by the Midwest and South, while the Northeast has shown the most resilience.  Even that market has declined, however, the report shows.  

The remodeling and replacement market also continues to sink, according to Ducker. It points to declines in sales of existing homes, double digit declines in home values, and more stringent credit requirements for mortgages and home equity loans continuing to have an adverse impact. The study points to projections from the Harvard Joint Center for Housing Studies, which foresees residential improvement expenditures falling 14 percent this year, after a 12 percent drop in 2008. Like new construction, this market is projected to improve in 2010.

WINDOW AND DOOR SHIPMENTS
With both the new construction and remodeling/replacement markets continuing to weaken, the AAMA/WDMA study foresees window shipments declining more than 20 percent this year, coming in at 36.8 million units (Table 1), just over half the 70 million unit peak level in 2005.  Improvement is expected next year, but total shipments are expected to be well off the highs seen earlier in the decade throughout the forecast period.


Table 1Source: Ducker International, FForecast

According to the report, there continued to be some marginal shift in market share away from wood and aluminum to vinyl. Much of that is attributed to greater weakness in the new construction market than remodeling and replacement activity. Fiberglass continues to grow despite the downturn, it is noted, as these types of windows are becoming more available to and accepted by consumers and builders. Other types of windows are also seeing some growth on the remodeling side.  

While there are some variations, residential entry, patio, and interior door sales follow patterns similar to those seen in residential windows, Ducker notes. Entry and interior doors are expected to decline by approximately 16 and 22 percent respectively in 2009. Patio doors are forecast to drop more than 24 percent. As with windows, sales of all these products should begin to recover somewhat in 2010 (Fig. 1).


Fig. 1Source: Ducker International, FForecast

Steel remains the dominant product for entry doors, while vinyl leads the patio door market and wood remains strong for interior doors.  For entry doors, fiberglass share continues to gain market share and is anticipated to continue to do so, though at a somewhat slower pace. Wood doors have found a niche in high-end construction which has slowed its loss of market share to fiberglass, the analysts suggest.

Other residential products included in the study are skylights and storm doors.  As the new construction market has weakened, builders have looked for ways to cut costs, the report notes.  As a result, discretionary products like skylights have seen a more significant drop than entry doors and windows.  Skylight sales are estimated to have decreased 22 percent last year, compared to an 18 percent drop in window sales.

The storm door market has declined in recent years, and will continue to do so this year, before sales begin to grow again in 2010.  Ducker analysts note that while conditions will improve, the increasing energy efficiency of entry doors and continued trends toward decorative entry doorlites may limit overall growth.

NONRESIDENTIAL MARKETS
While the residential market started to decline in 2006, the nonresidential window business continued to see gains into 2008, according to the AAMA/WDMA report. It is now expected to decline through 2011, although the drop won't be as steep as it was on the residential side.

Ducker bases its nonresidential projections on contract awards, which reflect activity related to new construction and major additions to existing structures. Actual fenestration demand typically lags contract awards by up to one year or more, it notes. Contract award totals were up marginally in 2007, but declined 13.5 percent in 2008 with further deterioration expected in 2009. This is expected to adversely impact the nonresidential window market. Overall, nonresidential glazing demand is predicted to retreat from a high of 542 million square feet in 2008 to just over 400 msf in 2010.   

Due to weakness in office and retail construction, storefront and site-fabricated products are forecast to see the biggest declines. Shop-fabricated, or true architectural, windows are projected to decline by the smallest margin of 5 percent as institutional categories, such as schools and public buildings, are expected to remain the most resilient during the downturn.

Nonresidential entry and interior door sales are expected to follow a similar similar pattern, declining in 2009 and 2010, before recovering in 2011. 

The AAMA/WDMA study features historical data for 2003 through 2008 and forecasts for 2009 through 2012, based on projections of construction activity and appropriate usage factors developed by Ducker International. The database for the study's information has been compiled from a number of sources, including the Census Bureau, and association member and non-member companies.

More Comprehensive Market Data Available

The 2008/2009 U.S. Industry Statistical Review & Forecast highlighted in this article is an annual report prepared by Ducker International as part of a comprehensive, bi-annual project jointly sponsored by AAMA and WDMA. The annual statistical review features national overview data on a variety of residential and nonresidential products. Information about purchasing the report, offered in PDF format, can be obtained by contacting:

In addition to the annual study, a more comprehensive market report is produced bi-annually. Last published in 2008, this full report includes the Study of the U.S. Market for Windows, Doors and Skylights, and The Distribution of Residential and Nonresidential Windows and Doors in the 2007 U.S. Market, as well as individual Statistical Review and Forecast market overview reports for each of the 11 major U.S. regional markets. These reports include exhaustive data on a wide range of market segments, including in-depth reports on demand for windows, patio doors, entry doors, interior doors, skylights and architectural products by material, type, etc. The Distribution Report provides data on sales volumes to different types of dealers and distributors, as well as to end users, including builders, remodelers and homeowners. The full report also includes the "Summary of Findings Regarding Installation Practices and Procedures 2007 Market." The full study is available for $3,300 by contacting AAMA or WDMA.