Plowing Forward: Annual Industry OutlookFebruary 16th, 2022 by Nathan Hobbs
Fenestration Market Taking on High Demand Despite Economic Challenges
By Nick St. Denis
This time last year, the door and window industry hoped the COVID-19 pandemic would soon be behind us. Unfortunately, that has yet to come to fruition. Add to it rising inflation, supply chain issues and labor shortages, and one would expect an understandably pessimistic view from dealers, manufacturers and suppliers.
But according to preliminary results from [DWM] and Key Media & Research’s annual industry outlook research, the fenestration market flourished in 2021 and has its sights set on another strong year of growth.
Current Business Environment
Inflationary pressure on both the consumer and producer sides of the economy has been a significant challenge across the board in recent months, yet the door and window industry appears unfazed thanks to continued strong demand. Well over two-thirds (71%) of Industry Outlook respondents—including door and window dealers, manufacturers and suppliers—view the current business environment as favorable.
One respondent of a large-scale manufacturer notes, “Demand is high, mortgage rates are still low, and the housing market is not in a bubble.”
Another small manufacturer adds, “With so many competitors sourcing materials needed for production from offshore companies, we see the opportunity for domestically sourced materials to substantially aid our ability to supply our customers with reliability and peace of mind.”
The industry is still concerned about supply chain issues, lead times and skyrocketing material prices. One Midwest dealer also points to additional challenges that plague 2022, such as “increased operating costs including employee pay, and availability of skilled workers in the industry—including experienced sales people.”
2021 Sales vs. 2020 Sales
Residential remodeling and new construction were clear bright spots in the economy in 2021, and the door and window industry reaped the benefits. Seventy-two percent of Industry Outlook respondents saw a sales increase of 10% or more, and another 10% of industry members increased sales to a lesser degree.
One Northeast dealer says that changes brought on due to the pandemic have reshaped the way people work and live, and that this has had a direct impact on demand. “I believe people are viewing their homes differently post-COVID,” they say. “Their home is for family, school, work and entertaining. Home is checking all the boxes for people. In lieu of this, people are investing in their homes with much more depth, thought and money to be spent.”
A door and window manufacturer asserts that the multifamily segment has been very strong, but that supply chain and pricing issues are troublesome. “The supply chain is extremely volatile, causing disruptions to material availability and customer timelines,” they say. “Also prices are unstable causing difficulty in quoting and profit margins.”
2022 Sales vs. 2021 Sales
Looking ahead, the fenestration industry is expecting another year of stellar growth.
More than half (51%) of Industry Outlook respondents expect a sales increase of 10% or more, and another 30% anticipate sales will increase, albeit by less than 10%.
Strong housing demand and a continued increase in remodeling spending are among the key factors cited by industry members.
Even those with a less-than-optimistic view of the general business environment have high expectations. One dealer in California that primarily focuses on new construction rated the current business environment as unfavorable, citing expectations of increasing interest rates and supply chain/pricing. However, that respondent still expects double-digit sales increases this year thanks to a strong pipeline of work and the company’s largest backlog ever.
“We have learned and are confident on how to sustain and grow business in a COVID environment,” the respondent says, noting substantially more activity in the high-end segment and all-time high home prices.
More to Come
[DWM] is wrapping up its industry outlook research, and the 2022 Door and Window Industry Outlook report will be available for purchase in
February at www.keymediaresearch.com/research. Stay tuned for that announcement.
Nick St. Denis is the director of research for [DWM] magazine parent company Key Media & Research.
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