There is Optimism Out There

John G. Swanson
April 18, 2012
COLUMN : Opening Remarks

Most window and door manufacturers and dealers talk very cautiously about the future. The downturn in the economy, coupled with some false starts on the road to recovery, has produced a significant change in attitude to our industry.

In the ’80 and ’90s, there was always an underlying optimism—even when economic forecasts were less than rosy. That optimism grew and grew as we began a new century until the housing bubble burst in 2007 and the near-economic meltdown of 2008.

Times got tough. I would hate to say this industry’s optimism disappeared, but it has seemed almost dormant at times. Now, I’m happy to report what I consider real optimism among at least one segment of the industry.

In preparation for a plastics industry conference scheduled in June, we surveyed vinyl window and door manufacturers to get a sense of where they saw opportunities ahead. We were somewhat surprised. Given the weakness in traditional vinyl window markets, we expected to learn more would be diversifying, targeting commercial and larger multi-family projects. What we found were expectations for growth ahead, both in remodeling and replacement and new construction.

I won’t claim our survey results are statistically valid. We don’t have all the resources and expertise of a market research firm but I can say we received responses from about 30 different vinyl window makers. About a third of them, I would estimate, had sales of more than $50 million and about the same, I would say, market their products nationally.

Among this group, more than half expect to see their sales of vinyl windows in the residential remodeling and replacement market grow more than 10 percent per year over the next five years. One in five expect growth of more than 20 percent per year. Those sound like pretty good prospects to me.

These manufacturers aren’t quite as enthusiastic about the new home market. About a third see their sales of vinyl windows in low-rise residential construction growing more than 10 percent per year over the next five years. Only one in 10 expect growth of more than 20 percent per year. Still, the prospects can’t be too bad. Overall, three-quarters of these companies predict growth of more than 5 percent annually.

These manufacturers don’t plan to sit and wait for the market to recover. Most see new initiatives as the primary reason they will enjoy sales gains in the coming years. Energy efficient upgrades rank first among steps to be taken, with 80 percent of respondents planning to offer higher-efficiency glass packages and nearly half offering or planning to offer triple-glazing within the next five years.

Slightly more than half expect to add new paint and coating options, while just under a half say they will be adding laminate finish options. Nearly 45 percent say they’ll add new vinyl window types and nearly 35 percent say they will add new door types.

One sign of the window and door industry’s resiliency in recent years—even as we’ve been hit by a significant downturn in our markets—has been the fact that product development activity hasn’t stopped. On the energy efficiency front, many manufacturers responded quickly to develop products to meet .30/.30 stimulus criteria, the 2010 Energy Star criteria and then R-5 criteria established by the Department of Energy.

As noted in this issue, companies are now planning for new, more stringent Energy Star criteria expected to go in effect in 2014. Others are looking at ways to stay ahead of the pack.

And the product development isn’t confined to vinyl, I know. One can point to the emerging business of folding and sliding multi-panel doors, which to date are primarily made of aluminum and/or wood. When I went to the international window and door trade show Fensterbau recently, I had the pleasure of meeting a group of owners of small custom wood shops. They see opportunities at the upper end of the residential market and are planning to develop a tilt/turn wood window system.

Are there reasons to be cautious in today’s economy? Certainly. But there are reasons for optimism too, and I am very glad to see evidence that companies are looking ahead more positively.