Growth was the buzzword at the summer meeting of the Northeast Window and Door Association (NWDA), held this week at the Minerals at Crystal Springs Resort in Vernon, N.J. IMG_2666

NWDA president Steve Chen of Crystal Window and Door Systems kicked off the meeting with a brief presentation on the state of the organization. He said membership has grown 18 percent during the past two years, with six new companies coming on board.

Chen attributed NWDA’s growth to expansion of the organization’s geographic region and an improved website, as well as intensive recruitment and retention efforts. He also cited NWDA’s booth at the Canadian trade show Win-Door, held in Toronto in November 2014, and  the group’s participation in the Window and Door Manufacturers Association’s congressional meetings in Washington, D.C., in March.

Code Update

Next, Joe Reed of Architectural Testing presented an update on what’s happening in the Northeast with building codes. There’s been growth there, too – but not much.

In 2015, Maryland and the county of New Castle in Delaware adapted IBC, IRC and IECC codes – and that was about it.

“There’s not going to be a whole lot of change there,” he said. “It’s sort of smooth sailing for the door and window industry.”

Next, Reed briefed attendees on delegated design, which is a project-specific requirement for the validation of performance conditions by engineering analysis. Reed said it’s often specified for glazing, window installation, storefront framing, cladding panels, sun shades and monumental skylights.

Reed said it’s generally used on high-value projects, but it’s not required unless it’s requested.

“It’s a mid-project deliverable,” he said. “It often can’t begin until shop drawings are complete.”

Reed called delegated design a form of insurance. He also said it can be a surprise cost and a “hot potato,” because manufacturers and contractors often disagree about who should perform the analysis.

Later, Scott Hanlon of the National Fenestration Rating Council gave attendees an update on Energy Star version 6, which went into effect on January 1, 2015.

Industry Overview

Mike Collins of Building Industry Advisors gave an overview of the door and window industry and how it fits in with the growing U.S. economy.

As the U.S. continues to recover from the recession that began in 2008, it has several advantages over other countries, Collins said. For example, the U.S. working-age population will increase for the next 80 years, while working-age populations will fall in China, Russia, the Eurozone, Brazil and Japan. (They’ll rise in India for next 30 years before falling.)  U.S. worker productivity also exceeds much of the industrialized world.

Collins said another big advantage for the U.S. is soaring oil production. Thanks to fracking, it’s outpacing petroleum giants Saudi Arabia and Russia in annual growth.

The U.S. is also dominant in equity markets. The total value of U.S. equities is up 244 percent since 2009, Collins said, and the combined value of the U.S. equity market represents 50 percent of total global equity.

Collins said other U.S. economic trends look positive for the door and window industry. For example, unemployment has dropped sharply, consumer confidence has surged and retail sales are increasing.

“We have significant tailwinds in this country,” Collins said. “This is the time to press, to hire that new salesperson or buy that new piece of machinery. The market is very solidly back.”

As of March 2015, total construction put in place in the U.S. was proceeding at an annualized rate of $967 billion, Collins said. “The fundamentals of supply and demand in the housing market are very strong,” he said.

The remodeling marketing is growing as well, according to Collins. “It was a huge help during the recession,” he said. “It’s carried a lot of companies.”

Collins then delved into specific trends in the door and window industry. He said selective distribution arrangements, which involve the private labeling of products, are growing. He said it’s an especially good idea for fiberglass doors and windows, and any products that require pultrusion.

Collins said the next round of Energy Star requirements will require greater creativity – and more lobbying on Capitol Hill.

“It could be argued that we are nearing the point where each additional increase in performance comes at a greatly increased cost per unit of improved energy performance,” he said. ”We’re starting to get less and less bang for the buck.”

Collins also said more companies are trying to become one-stop shops that offer deep product lines, and he cited Marvin’s recent acquisition of TruStile Doors as an example of that trend.

As for merger and acquisition activity in the door and window industry, Collins noted that it’s dropped for eight years in a row. He said there have been 364 acquisitions since 2000, with 76 percent coming from strategic buyers and 24 percent from private equity firms.

Plant expansions reflect more positivity for the industry, Collins said. He said there were 95 expansions from 2006-2014 and 88 plant closures in same period

“Expansions are going up,” he said. “That’s indicative of an ongoing recovery.”

Bankruptcies have also dropped sharply in the door and window industry since 2008 and 2009, Collins said. From 2008 to 2014, five companies emerged from bankruptcy, 14 were purchased out of bankruptcy, and 24 were closed or liquidated.

Collins said foreign competition in the U.S. for doors and windows is rising thanks to the ongoing housing recovery. Imports increased for the third year in a row to about $1.4 billion. Most of those imports are coming from Canada, but the strongest growth is from China.

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