Can We Just Be Optimistic?

John G. Swanson
December 17, 2012
COLUMN : Opening Remarks | Management

New housing starts are expected to be up nearly 20 percent in 2013, and it's anticipated remodeling and replacement will see double-digit growth rates in the first and second quarter. Ten years ago, that would have made window and door executives giddy about the year ahead.

I’m not looking for giddy now. The past six years have been rough on most of our businesses. Dysfunction in Washington lingers on. But I think there’s reason for optimism. And I think perhaps, we need to focus on that more. We can be too guarded or too cautious. We need to make sure doubt doesn’t limit our ability to act.

In a report discussing the 2013 outlook for the building products industry, L.E.K. Consulting emphasizes the importance of acting at the right time in the coming year. Predicting the shape of the recovery remains difficult, the firm notes, but its researchers are increasingly confident that the industry is recovering. Higher volumes will likely drive “unprecedented levels of profitability” for many companies in the building products industry, they predict.

A big question for manufacturers, L.E.K. consultants suggest, will be when to add capacity. For dealers, the question might be when to add employees—whether salespeople or installers. When and how a company positions itself for growth is key, not only for taking advantage of the increased opportunity in the market, but also for gaining market share.

Of course, it takes more than people to be prepared. You need to have the products the market wants or demands. Many companies already have products that meet the next version of Energy Star criteria. Others are making changes now.

But is that enough? Are those new Energy Star products going to be priced competitively with others in the market? Do you need a line that exceeds those performance levels? Being too cautious—doing just enough to have a product line that meets the latest criteria—could hurt in the long run.

The same is true for product options. Window manufacturers have added an expanding palette of interior and exterior finish options in recent years. Entry doors are available in more styles with an array of glass options. Patio doors no longer just swing or slide.

Builders might demand a window and door package that includes bi-fold doors so they can create the dynamic indoor/outdoor space more buyers are looking for. Homeowners might look elsewhere if you can’t offer replacement windows that are hunter green on the outside and cherry on the inside.

In covering this industry for more than 25 years, I can say that these are the kind of opportunities that used to excite window and door entrepreneurs. The market is growing, and demand for value-added products is increasing.

You can still find the same kind of enthusiasm among some executives, but I think it’s hard for many. That’s understandable. Sales levels aren’t what they were for many of us. Friends we used to work with are no longer around. And we know, even as the market recovers, it is still very competitive out there.

Still, I wish more of us could just be optimistic and less guarded in our outlook. The next few years are likely to see significant growth in window and door sales. We don’t need to throw caution to the wind or act rashly, but let’s focus on the positive, and less on the challenges and obstacles ahead.