An investment banker and a partner in Building Industry Advisors, Collins is an expert in the door and window industry who educated attendees on the latest trends and growth areas in the commercial market. He also serves as a columnist and blogger for DWM magazine, USGNN.com’s sister publication.
Collins started by highlighting many key commercial and economic indicators that all have posted impressive upward trends in recent months. He pointed out that strong consumer sentiment finds its way into increased spending and, on a lag basis, additional commercial building investments. Retail sales are also increasing and “strong retail sales lead to remodeling and new construction of retail facilities,” he says.
But its residential markets that, as a whole, are seeing the most growth, Collins says.
“On a percentage basis,” he says, “the residential market is seeing stronger growth right now. Skeptics will point out that the residential segment is growing off of a very low base. That is true, but the residential market segment is far larger, so it’s important that we’re seeing growth there. The commercial segment is growing as well, just not as much as a percentage.”
But Collins says that perhaps the most telling sign of all about the nation’s slow economic recovery has been watching residential new construction outpace the number of residential modeling projects.
“It’s been so long since anyone could possibly have said that that it’s jarring to hear,” Collins says.
Commercial growth continues to be slow, but steady, Collins says. He anticipates the industry’s biggest advances between now and 2017 to come in the office segment. Quite simply, as the unemployment figures continue to improve, the industry will see less of the underinvestment in office space that has characterized much of the last six years.
Citing numbers from Reed Construction, Collins foresees other areas of growth in government buildings, hospitals and clinics, libraries and museums.
“Some of these types of projects were stronger during the Troubled Asset Relief Program (TARP) spending period and we saw somewhat of a vacuum after that spending ended,” he says. “Now these groups have secured alternate financing and have begun building and remodeling again.”
Collins sees the reshaped market as ready to provide ample new opportunities for growth, particularly for residential firms seeking to expand more into the commercial side.
“The most common move we’re seeing residential companies make into the commercial arena concerns mid-rise, mixed-use buildings,” he says. “On these buildings, there will typically be storefront on the ground floor, light-duty commercial windows for a few floors and multi-family residential windows on the upper floors. While aluminum windows have dominated projects like these in the past, we’ve seen vinyl window manufacturers make meaningful inroads here. In particular, companies that are able to supply aluminum windows for the commercial floors and vinyl windows for the residential floors are particularly well-positioned to win new business. By using strong glass packages, they are able to meet all of the energy requirements and blending vinyl windows into a previously all-aluminum project helps control costs.”
Collins says it means that business owners need to recognize the changing market conditions and act accordingly.
“Now is the time for companies to push to capture their share of business,” he says. “Most projections call for growth in both market segments to decelerate to long-term norms in a few years.”