20/20 Vision: Manufacturers and Dealers Have Positive Outlooks on New YearNovember 19th, 2019 by Editor
The U.S. fenestration market collectively remains optimistic as the New Year approaches, according to [DWM]’s sneak peek into the 2020 Door and Window Industry Outlook. The report, produced by [DWM]’s parent company, Key Media & Research (KMR), takes a detailed look into the state of the industry and the year ahead.
According to the Industry Outlook, sentiment among door and window manufacturers and dealers hasn’t changed from its positive standing a year ago.
As of the last quarter of 2019, 85% of industry companies say the current business environment is either very favorable or somewhat favorable. This is the exact same figure (85%) from the same time in 2018. Optimism may have increased ever-so-slightly, as the percentage of businesses in the “very favorable” category bumped up 1 percentage point, while a smaller share of companies (2 percentage points fewer) graded the current situation as unfavorable heading into 2020 compared to the previous year.
Points of Optimism
When asked what manufacturers were most optimistic about entering 2020, many cite the “good” or “strong” economy in general. Several note that low-interest rates are driving the market in a positive direction and that they are offering new products as demand for higher performance doors and windows increases.
Dealers echoed these sentiments, as well. While numerous dealers say they are seeing plenty of new construction, many are most optimistic about the opportunities in remodeling. One dealer in the South Central region says the “economy is good and people are spending on home improvements,” with another in the West region noting they are seeing “continued opportunities with older homes being updated to be more energy efficient.” Several dealers say their quoting activity shows the pipeline is strong.
Points of Concern
Manufacturers and dealers also share many key trepidations looking ahead to the next 12 months. Political strife and trade concerns top the list, as well as the possibility of a looming recession.
Labor is also a key issue among industry companies, on both manufacturing and dealer sides. “The lack of skilled employees available in the market has been most trying,” one manufacturer notes. Dealers say an increased cost in goods and longer lead times from suppliers are an issue, as well.
Bump in Production
Dealers’ concerns over lead times and pricing may be traced to an increase in production among manufacturers. According to KMR data, industry manufacturers were utilizing an average of 77% of their capacity in 2019, up from 76% the previous year. Looking ahead, they anticipate capacity utilization increasing to an average of 82% in 2020.
Additionally, 85% of manufacturers say they’ve increased prices in the last 12 months, though just over 50% affirm these changes have sufficiently offset increases in prices of their own materials
This article originally appeared as part of the feature titled, “20/20 Vision.” To read the full article, which originally appeared in the November/December 2019 issue of [DWM] magazine, click here.
To order the full report, click here.