Window Sales Tumble From Record Highs

While nonresidential market sees gains, declines in new housing and weakness in remodeling and replacement hit residential product sales
A presentation from the American Architectural Manufacturers Association and the Window & Door Manufacturers Association
June 15, 2007
FEATURE ARTICLE | Products

With new home construction down and residential remodeling expenditures flat last year, window sales tumbled 5.3 percent in 2006, according to a new report from the American Architectural Manufacturers Association and the Window and Door Manufacturers Association. Weak market conditions are expected to produce a further 9.4 percent decline this year, before sales pick up again in 2008.

Prepared by Ducker Research Co. Inc., the AAMA/WDMA 2007 U.S. Industry Statistical Review and Forecast sees better times ahead for the nonresidential window market. There, demand jumped 9 percent last year, with further increases expected this year and next. The curtain wall segment has enjoyed the biggest gains thanks to a trend toward more open spaces and natural lighting in buildings, the study notes.

RESIDENTIAL MARKET
Following six years of growth that helped push window and door sales to record levels, housing starts dropped severely in 2006. Ducker points to rising new home inventories following a decrease in new home sales in the second half of 2006 contributing to a 14.6 percent decline in single-family housing starts for the year. Multi-family starts declined by 4.8 percent during this same period.
Table 1
The study foresees the steep drop continuing, as builders work to reduce their current inventory levels. Single-family starts are projected to decline another 16.1 percent in 2007, while multi-family starts will likely drop another 4.6 percent. Next year will see some improvement, the report suggests, but analysts don’t see a rebound to recent highs for the foreseeable future. 

The window and door industry has long enjoyed steady growth in replacement and remodeling activity, but even there, the study suggests times are tough. Pointing to data from the U.S. Census Bureau and the Harvard Joint Center for Housing Studies, Ducker states that residential improvement expenditures only saw 1.6 percent growth in 2006. Declining sales in existing homes and the reluctance of homeowners to make significant home improvements in a weak housing market took their toll in the second half of last year and will continue to do so. Overall, residential improvement expenditures are expected to decline by nearly 2 percent in 2007 and show a slower level of growth over the next five years.

WINDOW AND DOOR SHIPMENTS
After breaking the 70 million mark in 2005, residential window shipments declined to an estimated 66.7 million units in 2006 (Table 1). Weak market conditions mean that number is expected to decrease again this year, and this pattern is evident for residential doors and skylights as well.

In the window arena, wood products suffered the biggest losses last year. Vinyl’s share continued to grow marginally, but vinyl window sales also declined by 3.5 percent, the AAMA/WDMA study notes.

Starting with significantly lower market shares, alternative materials fared better, with fiberglass growing by 6 percent in 2006 and composites and other types of products growing by 2.5 percent. Ducker sees this share of the market continuing to grow as consumer and builder awareness of these materials increases, but they are not expected to surpass a 5 percent market share level overall through 2010.
Fig. 1
Fiberglass is making more progress in doors. In fact, while most residential products will see declines this year, fiberglass entry door sales are expected to grow in 2007. Ducker sees these sales growing over the next few years, primarily at the expense of insulated steel units.

Overall, the weak new construction will push door sales down, however. Unit volume for entry doors was estimated to be down 4.6 percent in 2006, with another 7 to 8 percent decline predicted for this year (Fig. 1). Interior doors were down 3.8 percent in 2006 and also projected to be down about 7 percent to 8 percent in 2007.

Patio door shipments correlate closely with window shipments, but regional trends and usage trends lead to some variations between these markets, the study notes. For 2006, total patio door volume declined by 5.4 percent, with a 9 percent drop seen on the new construction side and remodeling and replacement market off 2 percent.

The study notes that vinyl and fiberglass both continued to grow market share in patio doors, primarily against aluminum and, to a lesser extent, wood. That trend is expected to continue, but overall patio door sales are forecast to decline 6.5 percent for 2007.

Storm door shipments declined about 5 percent in 2006, while storm windows decreased by 9 percent. While other residential products are expected to see some rebound in sales in 2008 and beyond, Ducker predicts both storm door and storm window usage declining steadily over the next five years.

The residential skylight market has been hit not only by the slowdown in new home construction, but also by decreased preference for skylights in key regions such as Florida, the study notes. While window and door sales slipped about 5 percent in 2006, residential skylights fell by about 9 percent. Skylight sales, however, are expected to begin recovering in 2008.

NONRESIDENTIAL MARKETS
While the residential window business peaked in 2005, the AAMA/WDMA report sees the nonresidential glazing market peaking in 2008. Total sales, measured in square footage of vision area for this segment, jumped 9 percent to 505 million square feet in 2006 and are expected to increase 5 percent this year, and another 2.5 percent in 2008.

The study divides the nonresidential market into four segments: curtain wall, storefront, site-fabricated windows and shop-fabricated windows. As noted, curtain wall outpaced the market with a 16 percent increase last year, the storefront and site fabricated markets grew by roughly 8 percent. The shop fabricated window market grew by 6.5 percent last year, but the study sees it beginning to outpacing nonresidential products with a projected 7 percent gain for 2008.

Doors are following a trend similar to windows in the nonresidential market. A wide mix of materials is used in both the interior and exterior markets. In both arenas, the report suggests wood and “other” type doors are gaining share versus steel and aluminum.

The AAMA/WDMA study features historical data for 2002 through 2006 and forecasts for 2007 through 2010, based on projections of construction activity and appropriate usage factors developed by Ducker Research. 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

    The 2007 U.S. Industry Statistical Review and Forecast highlighted in this article is an annual report prepared by Ducker Research as part of the North American Industry Market Study, a bi-annual project jointly sponsored by AAMA and WDMA. It features national overview data on a variety of residential and nonresidential products. Every other year, the organizations produce a full study, which features exhaustive data on a wide range of market segments, including in-depth reports about demand for windows, patio doors, entry doors, interior doors, skylights and architectural products by material, type, etc. The most recent addition, issued in 2006, also contains expanded regional statistical reviews and a Channel Distribution Report that provides data on sales volumes to different types of dealers and distributors and to end users, including builders, remodelers and homeowners.

    Information about purchasing the Statistical Review & Forecast or the full 2006 study can be obtained by contacting AAMA at Suite 550, 1827 Walden Office Sq., Schaumburg, Ill. 60173 (847/303-5664, www.aamanet.org) or WDMA, 1400 E. Touhy Ave., Des Plaines, Ill. 60018 (847/299-5200, www.wdma.com). The $3,300 2006 study and $100 2006 Statistical Review & Forecast are offered on CD with information supplied in Adobe Acrobat files.