W&D Weekly - March 19, 2008 | Vol 3, Num 12
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More Weakness Seen in Home
Improvement Market

A new report estimates declines of 2 percent for 2007 and another 1.5 percent drop for 2008...

The home improvement market hasn’t seen a decline since 1991, but a new report estimates declines of 2 percent for 2007 and another 1.5 percent drop for 2008. The continued downturn in the housing market coupled with slowing consumer spending is at the heart of these forecasted declines, which appear in the February 2008 market forecast update from the Home Improvement Research Institute and Global Insight.

U.S. Home Improvement Products Market
2007-2012

2007

2008

2009

2010

2011

2012

Billion Dollars

306.7

302.1

310.9

332.1

357.8

381.0

% Change

-2.0

-1.5

2.9

6.8

7.7

6.5


The estimate for 2008 home improvement sales was lowered by $13.5 billion from the previous forecast (August 2007) to $302.1 billion. The updated 2007 forecast for the market came in at $306.7 billion, a downward revision of $2.2 billion. Global Insight analysts point out, however, the long-term outlook for this market still remains quite strong and is estimated to average growth of 6 percent annually over the next 4 years, reaching $381 billion in 2012.

Looking at the economy in general, Global Insight sees the effects of the housing market downturn spreading more broadly, and says the weight of evidence now suggests that the economy has slipped into a mild recession. A confluence of factors has contributed to a slowdown in consumer spending–declining asset values, tightening credit conditions, weakening real income growth, and an erosion of purchasing power from higher oil prices. The recently enacted federal tax rebates will give a temporary boost to consumer spending in the summer, but it is expected consumer spending will be flat during the first half of 2008.

The report says the housing market situation has deteriorated significantly, but the latest HIRI forecast still predicts there will be the beginnings of a turn-around in mid-2008. Overall, it expects housing starts will decline an additional 33 percent in 2008, and existing home sales will fall another 16 percent, with the pace of recovery fairly slow through 2009.

Looking at the sales of home improvement products, the Global Insight report suggests the consumer market sales showed no growth over 2006 in nominal dollars and a 2.4 percent decline in constant prices. Based on data for the first three quarters of the year, it estimates that professional Market sales declined by 7.5 percent in 2007 or 10.2 percent in constant prices.

With the sharper than expected decline of housing market activity and the general slowdown in consumer spending, the analysts see adecline by 0.7 percent in nominal dollars in consumer market sales for 2008. Professional market sales, which have been hit harder by the housing collapse, are expected to be down another 4 percent.

Looking further out, the HIRI/Global Insight report sees sales of home improvement products rebounding 2.9 percent in 2009. A slow recovery in the housing market is expected to keep home improvement product sales growing below trend. A cyclical rebound will occur in home improvement product sales in 2010-2012, with growth averaging 7 percent in nominal dollars and over 5 percent in constant prices

Three Manufacturers to Receive
Energy Star Honors

The U.S. Environmental Protection Agency and Department of Energy have named Gorell Windows & Doors, Pella Corp. and ProVia Door as Energy Star Partners of the Year for 2008...

The U.S. Environmental Protection Agency and Department of Energy have named Gorell Windows & Doors, Pella Corp. and ProVia Door as Energy Star Partners of the Year for 2008. The awards recognize manufacturers and retailers for their efforts promoting and delivering Energy Star labeled products.

Pella is being recognized for the second year in a row as Partner of the Year in the window manufacturing category. “Pella has been committed to environmental stewardship and providing quality product solutions to our customers throughout the company’s 83-year history,” says Elaine Sagers, vice president of marketing. “Pella is proud to be recognized by the Environmental Protection Agency and the Department of Energy for providing ‘green’ energy-efficient products that help customers save money and conserve valuable natural resources.”

Both Gorell and Provia Door, previously known as Precision Entry, are being honored with Sustained Excellence Partner of the Year Awards. This award is given to organizations which have already won the Energy Star Partner of the Year award multiple times. Gorell notes this is the third year in a row it has received the Sustained Excellence Award and 2008 marks the fifth consecutive year that Gorell has been recognized by EPA and DOE.

“To receive the Sustained Excellence Award again—and to consistently be named Energy Star Partner of the Year—says a lot about Gorell and the products we make,” says Wayne Gorell, president and CEO of the Indiana, Pa., based vinyl window manufacturer. “More than an astounding 94 percent of the windows we manufactured in 2007 qualified for the Energy Star label because our windows are designed and made exceptionally well. We are committed to being a ‘green’ company—protecting the environment and partnering with Energy Star is an important part of this process.”

“ProVia Door is committed to helping protect the environment through our durable, energy efficient entry doors,” says Bill Mullet, president of the Sugarcreek, Ohio, based company, which produces all its entry systems as Energy Star qualified. “Our long standing partnership with Energy Star shows our organization’s commitment to energy efficiency. We understand that partnering with Energy Star is an important step in protecting the planet God has entrusted us with.”

Robert J. Meyers, principal deputy assistant administrator for EPA’s Office of Air & Radiation, commends all three companies for their achievements. “Pella’s efforts in manufacturing products that earn the Energy Star make them a leader in demonstrating that consumers can enjoy quality products that also protect the environment,” he states. Year after year, he adds, partners like Gorell and ProVia Door are “examples of the benefits of a long-term commitment to energy efficiency. Their actions are leading the way in saving energy and helping to protect the environment.”

All three manufacturer’s accomplishments will be recognized at an April 1 awards ceremony in Washington, D.C.

PGT Expanding in Commercial Market

PGT Industries is expanding its commercial business
operations...

Joining other residential window manufacturers looking to diversify, PGT Industries is expanding its commercial business operations. The Florida-based manufacturer now has formed a partnership with ASI Ltd. to provide unitized wall solutions.

The joint venture is designed to enable the two firms to compete for large-scale commercial projects. "By offering a one-stop-shop for unitized curtain walls to the commercial construction industry, we are offering the industry a way to save money and gain control over their projects by dealing with one team that is involved in every stage of the project as it moves from design to construction," says Wayne Varnadore, PGT’s vice president of architectural systems. "Customers will benefit from PGT's strength in manufacturing and supply chain management combined with ASI Ltd.’s extensive experience in sales, marketing, engineering and project management. This is another positive step in the expansion of PGT's Architectural Systems commercial product capabilities."

"We will be the only manufacturer of unitized curtain walls in North America that will control all aspects of manufacturing in-house,” adds Ken Smith, ASI president. “This work includes the manufacturing of tempered glass, laminated glass, insulated glass, and aluminum panels that will be integral to the units."

With operations in Venice, Fla., and Salisbury, N.C., PGT produces vinyl and aluminum windows and reports it is the largest manufacturer of impact-resistant products in the country. The company launched its Architectural Systems Series line last year to serve the needs of the commercial and residential high-rise window and door market, including condos, hotels, office, retail, education, among others.

Based in a new 180,000-square-foot manufacturing facility in Indianapolis, Ind., ASI supplies facade solutions to contractors throughout the United States, and operates an ornamental division that also produces metal panels, sun shades, and other ornamental shapes.

The joint venture was finalized in February, and the two companies already have one project in process: the 34-story River House apartment complex in Grand Rapids, Mich.

Simplex to Supply Window Manufacturer

Simplex Building Products North America Inc. reports it has signed an exclusive PVC window extrusion supply contract with a major window manufacturer...

Simplex Building Products North America Inc. reports it has signed an exclusive PVC window extrusion supply contract with a major window manufacturer. The name of the manufacturer was not disclosed and the company did not return calls for comment.

“Our window profiles will save this customer over $1 million annually," says Cliff Wright, Simplex president. "We anticipate a seamless transition period, with deliveries to begin in the third quarter of this year. Annual revenues from this multi-year contract should exceed $5 million.”

“We are targeting major window manufacturers for similar contracts as we firmly believe we can both lower our customers' profile costs and provide better service,” Wright adds. “Simplex will be purchasing and financing the tooling for the profiles in the next few weeks."

Simplex was launched by CMI Engineering, a product design and engineering services firm based in Lebanon, Ind. Approached by a group of vinyl window fabricators to investigate offshore cost-savings opportunities, Simplex announced plans in 2005 to gather an international team of companies that could design, tool and manufacture extrusions using a common engineering platform that could be shared by a network of fabricators around the country.

Late in 2007, Simplex was acquired by Herc International, National City, Calif. Herc, which provides water and wastewater infrastructure products and services, acquired Simplex to serve existing customers and expand into the consumer market, according to company officials.

Simplex will import its own proprietary building products from the Anhui GuoFeng Plastic Industry Co., a manufacturing company in Hefei, China, and supply these products to the North American market, the company reports. In addition to window products, the company supplies fencing, decking, and railing products under the Polytimber brand name.

More headlines...

...

AERT Plant Recycling New Building
Advanced Environmental Recycling Technologies Inc., a supplier of extruded building products made from reclaimed plastic and wood fiber waste, broke ground on a new plastics recycling plant in Watts, Okla. on March 14... read more

VPI Achieves ISO 9001:200 Certification
VPI Quality Windows reports it has achieved certification to the ISO 9001:2000 quality management system standard. The Spokane, Wash., based manufacturer’s certification, approved by BSI Management Systems Inc., states that processes are standardized, documented, and systematically improved throughout the company in order to maintain compliance with the international standard... read more

Keystone Quality Assurance Program Accredited
Keystone Certifications Inc. reports its quality assurance program is now accredited by the International Accreditation Agency. Accreditation means program participants can qualify for all major approval and evaluation programs, such as Florida Product Approval, International Code Council Evaluation Service reports, Architectural Testing Code Compliance Research Reports and others, the company explains... read more

...

Builder Confidence Remains Unchanged in March
from National Association of Home Builders
Builder confidence in the market for new single-family homes remained unchanged in March, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI held firm at 20, which is near its historic low of 18 set in December of 2007 (the series began in January of 1985)... read more

Special Tax Rebates Will Begin May 2: IRS
from CNNMoney.com
The IRS on Monday said it would begin sending out 130 million tax rebate payments aimed at boosting the economy on May 2... read more

Best Places To Get Ahead
from Forbes.com
Manhattan, Hollywood and Silicon Valley may boast some of the richest residents in the country, but these hugely competitive places don't necessarily boast the best job prospects for the average American... read more