W&D Weekly - April 30, 2008 | Vol 3, Num 18
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NAHB Economist Says Bottom is Near
Although he now projects a recession for 2008, David Seiders also sees new single-family home starts bottoming out by the end of the year ...
Although he now projects a recession for 2008, David Seiders, chief economist for the National Association of Home Builders also sees new single-family home starts bottoming out by the end of the year, with a recovery beginning in 2009. Speaking at NAHB's 2008 Spring Construction Forecast Conference on April 24, Seiders indicated some pessimism due to the large supply of unsold and vacant homes, but retained some optimism suggesting the worst may be nearly over.
"There is a lot [of supply]; there's no question about it," Seiders said. "The combination of persistently weak demand and high supply has house prices and values falling." Despite that reality, he expects single family home sales to end their slide in 2008, with some signs of recovery by the end of the year.
"Single family home sales have been falling like a rock since 2005," Seiders said. "Our forecast has them recovering by the middle of this year, which isn't far off."
He also projected the remodeling market to stabilize somewhat in 2009, with that market lagging slightly behind new home sales and starts.
However, Nariman Behravesh, chief economist and executive vice president for Global Insight, cautioned that those gains may come with some turbulence.
"What worries me most is that the recovery will be tepid," Behravesh noted. "The tax rebate checks are pulling growth from next year into this year, so the next low could be in early 2009."
"Recession" has been a somewhat dirty word among economists, many of whom have long projected a down year without explicitly using the term. Seiders acknowledged that he himself was a late convert to the possibility.
"About two weeks ago, I succumbed and slipped a mild recession into our forecast," Seiders said. "It's fair to say that economy performance and outlook have deteriorated. We expected the housing market to lose ground coming into 2008, but it's been worse than expected."
"I've certainly cut my outlook," Seiders added, later referencing a "feedback loop" of falling home values, declining mortgage qualities and tighter credit requirements for new buyers. "Where does it stop? You've got to get this under control somewhere."
Westech Closes NY Extrusion Operation
Westech Building Products closed its Holmes, N.Y. window and door extrusion facility on March 1. The company, previously known as North American Profiles Group, continues to extrude vinyl window and door components ...
Westech Building Products closed its Holmes, N.Y. window and door extrusion facility on March 1. The company, previously known as North American Profiles Group, continues to extrude vinyl window and door components at the company’s Calgary, Alberta and Evansville, Ind. facilities.
“Given the rapidly changing business conditions due to the housing and related building products industry we elected to close the facility,” said David Hansen, spokesman for Westech parent company Westlake Chemical Corp. “We expect to meet all of our customer needs through our Calgary operations.”
Hansen did not comment on how many employees were affected by the closure. The Holmes, N.Y., plant was once home to Fiberlux Inc., one of the first extruders of vinyl window products in the United States. Westlake acquired the Fiberlux assets in 2000.
Window Enterprises Moving to Super Spacer
Texas-based Window Enterprises LLC will manufacture all its insulating glass using Edgetech I.G. Inc.’s Super
Spacer ...
Beginning May 1, Texas-based Window Enterprises LLC will manufacture all insulating glass for its windows using Edgetech I.G. Inc.’s Super Spacer, the supplier reports. The residential window maker says the move gives the company another way to improve its product and processes in a down market.
“Everyone is moving toward energy-efficient, sustainable window systems that are better for the environment, and we see this as the perfect time to invest and get ahead of the competition,” says Ronn Croston, VP of operations for Window Enterprises. “Our objectives are to offer our customers windows that meet these needs at a lower cost. Adopting Edgetech’s Super Spacer is a key part of meeting these objectives.”
Led by Michael Mullarkey, CEO and owner, Window Enterprises employs over 200 people, with representation from California to Florida. The company’s operations are housed in a 110,000 square foot facility in Carrolton, Texas, and it has a builder direct sales office in Houston. The manufacturer got its start with the purchase of all the assets of Action Windoor Technologies at the end of 2007.
To assure the best overall efficiencies, Window Enterprises looked to Edgetech for product recommendations, as well as line layout designs and equipment options. “We have worked very closely with Window Enterprises to help them achieve their goals,” reports Ted Hoehn, Edgetech’s national sales manager in the Western United States, South America and Mexico. “We looked at their space and throughput requirements and put together a plan to get them up and running with Super Spacer as soon as possible. The Window Enterprises team is also receiving comprehensive training on-site prior to start-up to assure they will run smoothly and produce high-quality, energy-efficient products from day one.”
Investment Bank to Hold Industry Webinar
Jordan, Knauff & Co. will hold its Spring 2008 Window & Door Industry Update webinar on Thursday, May 15. ...
Jordan, Knauff & Co., an investment bank in Chicago, will hold its Spring 2008 Window & Door Industry Update webinar on Thursday, May 15. The online presentation will last roughly one hour, followed by a brief period for questions from attendees. Presenter Michael Collins will cover a variety of topics relevant to window and door industry executives, including an update of the firm’s research into competition from Chinese companies, and a comparison of the rate of growth of window and door imports with imports of other building products. Also included will be a review of statistics regarding recent window and door transactions and plant expansions and the outlook for continued transaction activity in the industry.
Those interested in participating can register at www.jordanknauff.com/webinar.
Anyone with questions can also contact Collins at 312/254-5904 or mcollins@jordanknauff.com.
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Housing Slump Brings Closing Of Lumberyards
From the Hartford Courant
For 20 years, home builder Robert DiGinnaro depended on the lumberyard in the center of town to supply him with plywood, windows, trim and doors.
But it wasn't much of a surprise this week when DiGinnaro and other customers arrived at the Stevenson lumberyard to pick up supplies and they found the front gates locked. ... read more
It's All About Experience
From BusinessWeek
Advances in manufacturing technology and the global reach of the Internet have leveled the playing field in the product marketplace. It wasn't long ago that time-to-market was two years, then 18 months, and then 12 months. Now, a competitor can knock off your "innovation" in six months or less. Many businesses understand that being "new" or "different" is no longer a differentiator. Countless companies are elbowing their way to the top with designs that are also "feature-rich" or "patent pending." Innovation in product design has lost its meaning and, therefore, its value. ... read more
Making Windows Twice as Efficient as Energy Star
From the Portland Press Herald
Congress wants to raise the average fuel efficiency for cars and trucks to 35 miles per gallon by 2020. That's fine, but Sean Flanigan is more interested in windows that do better than 0.35 today.
Flanigan is research and development manager at Paradigm Window Solutions in Portland. The company has just begun selling a high-performance window that's twice as efficient as the government's minimum Energy Star rating for Maine's climate, which is 0.35 U-value. ... read more
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