New Report Shows Mostly Positive Outlook for Residential Fenestration in 2021January 14th, 2021 by Editor
Despite the negative impact the COVID-19 crisis has had on many other parts of the economy, the residential fenestration products industry—encompassing doors, windows and related components—is carrying positive momentum into the New Year. This is according to the 2021 Door and Window Industry Outlook from Key Media & Research (KMR), parent company of [DWM] Magazine.
(The newly released report is available here. Use the promo code DWM20 for 20% off.)
Growth in Demand
KMR reports that the value of construction activity specific to residential fenestration continues to trend upward year-over-year, albeit at a slower pace than in recent years.
New single-family construction starts, a fundamental indicator of door and window demand in new construction, are still on the rise. Each U.S. region has experienced year-over-year increases in new single-family construction starts in most years over the past decade. At the same time, new multifamily housing unit starts have flattened in recent years after a major post-recession surge in the early 2010s.
Remodeling activity, a key indicator of door and window replacement demand, has increased in most quarters since the end of 2017 and will continue through 2021 at a slower rate. Additionally, the average expenditure of door and window replacement projects has increased substantially over the past two decades.
Outlook of the Industry
Dealers and manufacturers enter 2021 with a less positive outlook than in the previous two years. However, a majority still view the current business environment as favorable. Meanwhile, dealers and manufacturers have collectively enjoyed year-over-year sales increases over the past three years, and they expect that to continue in 2021.
KMR analyzed survey data of dealers’ sales expectations, and applied weighting based on company size (by annual revenue) and application. According to the firm’s analysis, dealers of fenestration products anticipate mid-single-digit increases in sales for both new residential and replacement in the coming year.
Material Price Trends
KMR’s Fenestration Materials Price Index shows from the end of 2010 through 2020, fenestration material prices have increased by well over 20%. Prices have since stabilized, though manufacturers in the industry continue to report price increases from their suppliers, so the Index may be back on its way up in the coming quarters. In fact, a majority of manufacturers say they raised their prices in 2020.
Year-over-year, manufacturers continue to increase the utilization of their full production capacities. All three company size categories (small, medium and large) have steadily increased their capacity utilization, albeit at different rates. At the same time, many industry manufacturers expanded their footprint by adding square footage in 2019. 2020 was less active in terms of expansions, but several major companies did begin or complete expansion projects during the year.
This article was adopted from the Executive Summary of the 2021 Door and Window Industry Outlook. Click here to order the report, or contact director of research Nick St. Denis at email@example.com with any questions.