Manufacturers and Dealers Optimistic For the Year Ahead

By Nick St. Denis

As the economy chugs along and the residential construction market continues to expand, manufacturers and dealers in the door and window market say they’re on a roll. Looking back over the last year and forward to the year ahead, both segments of the industry have benefited from heightened sales and will continue to do so through 2019.

According to the 2019 Door and Window Industry Outlook report produced by Key Media and Research (parent company of Door and Window Market magazine), businesses attribute the state of the economy as a whole and confidence among consumers as key drivers in the market.

Nearly nine out of ten manufacturers categorize the current business environment as either very favorable or somewhat favorable, and most anticipate an increase in production in 2019. Door and window dealers, meanwhile, collectively expect sales increases in 2019, in similar fashion to 2018.

Following are a few key figures from the Benchmark Report (available in mid-November 2018), as well as the most prominent points of optimism—and concern—within the industry.

Points of Manufacturer Optimism

Several door and window manufacturers say they are optimistic, because the economy is “stable” or “strong.” Here are a few points they use to back those notions:
• “The introduction of Chinese tariffs has brought us new business from distributors that are trying to avoid the price increases that have followed suit.”
• “Automation to increase capacity.”
• “Continued strong repair and replacement market … Exciting new markets/platforms.”
• “Robust building construction in 2019.”
• “The building industry will continue to thrive.”
• “Rich people are richer and feeling confident.”

Points of Manufacturer Concern

That’s not to say that, even amid what’s viewed as a stellar economy, that door and window manufacturers don’t have their concerns. Labor costs and material costs were the two most prevalent among manufacturers. Here are several others:
• “Trade wars.”
• “The growth of South American door manufacturers distributing their products in North America, as they have not been tariffed yet.”
• “Unknown disasters.”
• “Economic collapse due to too much borrowing and too many tax cuts.”

Points of Dealer Optimism

In the Report

The 2019 Door and Window Industry Outlook report features benchmarking data collected from nearly 200 manufacturers and dealers, aggregated and broken down by company size. From this data and other relevant sources, figures and topics covered in the report include:
• Micro and macro outlook of market
• Manufacturing facility footprint
• Capacity/production trends
• Merger and acquisition activity
• Overseas sourcing practices
• Material pricing concerns
• Sales expectations of manufacturers and dealers
• Market confidence of manufacturers and dealers
• Regional outlook of dealers
• And more.

The report is available for purchase at www.keymediaresearch.com/research.

Several door and window dealers cited the “economy” or “booming economy” in general as a point of optimism, as well as confidence spurred from the current administration’s policies. Multiple respondents also cited population growth in their markets as a key driver of business. Here are some additional points provided by dealers:

• “We’re already quoting projects for next year.”

• “Pent-up demand.”

• “The local economy is chugging along—plenty of repair, replace and remodeling.”

• “Our ability to create leads … we get better every day. We are quite diversified in our marketing efforts.”

• “The consumer base is very optimistic and willing to move forward on projects.”

• “The high-end, luxury home market continues to thrive, along with the economy. We see no signs of slowdown in this segment.”

• “Hurricane awareness.”

Points of Dealer Concern

While dealers express great optimism in the current business climate, a few key concerns are shared among many. A handful of respondents noted labor shortages and lack of availability for qualified installers as major reasons to take pause. Tariffs were also mentioned on multiple occasions.

Here are a few points of concern from dealers:
• “Increased cost of goods sold and mortgage interest rates.”
• “A market crash and tighter cash supply.”
• “Suppliers who open up too many other dealers—leads to drop in margin.”
• “Shifts toward a stronger centralized federal government weakening the economic engine powering our economy.”
• “Having political parties fighting each other and not making choices as Americans. This can affect business climate more than anything else.”
• “Rising cost of manufacturer goods is out of control and may slow building until market can correct itself.”
• “Large ‘sales’ organizations flooding the market with poor quality products and workmanship.”

What lies ahead is yet to be seen, but with an economy and housing market that remains robust, the balance tips toward optimism heading into 2019. Despite some concerns, the door and window manufacturers and dealers surveyed say they’re expecting another stellar year. The full report will be available in mid-November at www.keymediaresearch.com/research.

Nick St. Denis is the director of research at Key Media and Research, parent company of DWM magazine. He can be reached at nick@keymediaresearch.com.

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