Deciding When the Time is Right
At times during this long, slow economic recovery, I’ve felt like someone hit the “pause” button for the window and door industry. We’re gearing up and moving forward for a little while, and then things seem to stop.
On page XX of this issue, we highlight the results of the annual market study prepared by Ducker Research for the American Architectural Manufacturers Association and the Window & Door Manufacturers Association. Its data reinforces that feeling. The market did improve in 2009 and 2010—bolstered largely by the stimulus tax credits—and then weakened last year.
Sales are not forecast to go down again this year, but growth is expected to be weak. The “pause” button continues to be engaged, while we wait for the more promising market projections for 2013 and 2014.
The sense that many companies are waiting can be felt when talking to equipment suppliers, as we did for this issue. They report that many window and door manufacturers are content to take small steps to upgrade their production operations these days. More are looking to retool or refurbish existing machines rather than invest in new lines.
I’ve heard other suppliers express similar sentiments. Manufacturers like new components or systems they’ve introduced, but are slow to embrace them.
We also talked to dealers as we focused on operations for this issue. We learned that they too are often more focused on smaller steps these days. In 2010, the introduction of the iPad, along with rapid growth in the use of smartphones, started a lot of buzz in the home improvement industry about whole new ways to do business. The number of companies that have fully embraced such technologies is still relatively small, however. With a few notable exceptions, the majority of dealers still seem to be testing the waters.
There are good reasons to move slowly—particularly when larger investments are required. Few of us can afford to get too far ahead of our markets. It’s also easy to sit tight for a little while. What’s tough is deciding when to “unpause.” When can we pull the trigger and hire more people? When’s the right time to gear up for the new product line? When’s the right time to get all our sales staff on tablets? If you move too early, there’s no payback on the investment. If you move too late, you can suddenly find yourself facing a competitive disadvantage.
There’s still a lot of hesitance out there, but I sense some companies have “unpaused.” In this month’s news, we report on Simonton Windows adding hundreds of workers. LaCantina Doors recently moved into a new plant. The right time, of course, will be different for every company—depending on the region served, the market and the product line—but there will be a right time.
The AAMA/WDMA market report certainly suggests there will be opportunities. Granted, we’re starting at a low level, but window sales for new residential construction looks to be up about 20 percent per year for the next three years. Remodeling/replacement sales may grow at a slower pace, but hit fast forward to 2015 and the market is almost back to its pre-recession peak.
That’s almost enough to give pause.