Economic Uncertainty Characterizes 2001
Learn What Trends Window Manufacturers May Expect This Year
|When a group of people are gathered together to offer their ideas and input on a particular subject, often times vastly differing opinions are the end result. But just the opposite was true when representatives from the window and door industry were asked to lend their thoughts concerning window industry trends in 2001.
Many of our contributors forecast economic uncertainty and slower growth in 2001. Soaring energy and fuel costs will have a major impact this year. Additionally, a slight decline in housing starts is expected and money-conscious homeowners will likely upgrade their homes rather than buy more expensive ones.
Also, wood, vinyl and aluminum may lose some market share as many in the industry predict a rise in alternative materials such as PVC and fiberglass.
So, to find out how your company can prepare for the coming year, look to the following pages to hear from experts in the industry.
Market is Hot, Hot, Hot
by Jim Plavecsky
The Congressional Budget Office forecasts real economic growth at an average of 3 percent over the next two years declining to 2.7 percent per year beyond 2002. This reflects a deceleration in consumer spending and residential construction.
While the economy may be cooling, the demand for warm-edge spacers is as hot as ever. Back in 1990, warm-edge spacers accounted for only 20 percent of the spacer market. The majority of window manufacturers were using boxed aluminum spacer. By 2000, warm-edge spacers turned the window industry inside out, accounting for 80 percent of the market.
While the growth rate for spacers in general will follow the window industry as a whole, the growth rate of warm-edge spacers will continue to outpace window industry growth if only by a few percent. Energy costs are once again on the rise, and this is fueling a renewed interest in lower window U-values. Warm-edge spacers improve overall window U-values by cutting down on heat transfer that tends to occur at the edge of the insulating glass unit.
Less heat transfer at the edge also means warmer glass temperatures at the window edge on days when it is cold outside and nice and cozy inside. You see, with metallic spacers, heat is transferred from the warm side to the cold side of the window, and this makes the window edge cooler on the inside of the home. This cooler window edge allows moisture to condense upon the window edge surfaces, which obstructs our view and allows mold to form on window surfaces. This is more of an issue today because modern homes are better insulated with reduced air-exchange between indoor/outdoor environments. This traps humidity indoors, which leads to higher rates of condensation formation at the window edge. Window companies are in turn combating this by using higher performance warm-edge spacer systems, which reduce condensation by keeping the window edge warmer. This increases value to the consumer by providing a clearer view and a healthier indoor environment as reduced condensation cuts down on mold-formation on the window edge.
The Ducker Research Company is forecasting the residential window market to use 59.4 million windows in 2001 (WDMA Report, April 2000), a virtual dead heat with the 2000 usage. Given that the average window is made up of 20 lineal feet of glass and that 92 percent of all windows in North America are made with insulating glass, we have a residential spacer market adding up to 1 billion, 93-million-feet in 2001. Warm-edge spacers will account for roughly 900-million-feet of this market. Ducker Research is forecasting a rebound in the North American window market with residential window usage increasing 6 to 7 percent by 2003. Additionally, insulating glass usage is likely to edge up a few more percent in the coming years and energy conservation will be-come even more significant given these factors. I expect that warm-edge spacers in residential applications will enjoy a total market of well over 1-billion-feet by 2003.
Jim Plavecsky serves as vice president of marketing and sales for Edgetech IG, based in Cambridge, Ohio.
IG Sealants Evolve as Specialty Products; No Longer Commodities
Insulating glass (IG) sealants will continue to be influenced by numerous factors, most of which will be driven by IG fabricators. How the desires, needs and wants of the IG fabricator are met will be a function of the sealant producers’ resources, technical capabilities and strategic objectives.
Fabricators are placing greater expectations and demands on IG sealants. They are becoming less interested in a sealant’s specifications and more focused on the quality of the resulting IG unit. In response to these demands, some newer IG sealants are rapidly evolving as specialty products, moving away from the commodity sealant of the past 20 years. Fabricators desiring the ultimate in IG unit performance and ease of use in their production system, are rapidly changing to the specialty sealants.
IG fabricators need to continually educate themselves concerning the significant differences provided by specialty sealants and how they dramatically differ in traits and performance characteristics when compared to commodity sealants.
Specialty IG sealants will continue to be embraced by fabricators who desire to make the best quality unit and by those experiencing difficulties with their present commodity sealant. In the past, these fabricators have devoted significant resources in switching from one commodity sealant to another, without improving quality or lowering production costs.
Energy, Comfort and Aesthetics—
What’s to Come in 2001
by Jim Quinlivan
After a decade of growth in the window and door industry, we begin 2001 by looking into a cloudy crystal ball. It appears we are headed for leaner times in the upcoming year. While the best forecasts are for a soft-landing for the economy, a cautious approach is certainly worth considering as we enter the New Year.
A Look Back
A quick glance back at events of the past decade clarifies strategy for the future of our industry. While the window and door business has just experienced the longest growth period in history, a great deal of consolidation has taken place. There are certainly fewer, as well as larger, corporate players in our industry.
From a materials standpoint, there has been a great deal of growth in vinyl and fiberglass products. Many of the familiar trade names in the wood and aluminum fenestration products in-dustry now carry multiple window and door materials.
Industry code groups and testing organizations have received greater attention in the past decade. The National Fenestration Rating Council (NFRC), ENERGY STAR®, the American Architectural Manufac-turers Association (AAMA) and others have focused their attention toward improving fenestration products. Forced-entry resistance, life-cycle testing and corrosion resistance are key performance areas that are considered.
The trends from the last ten years create opportunities for our future, but also raise strategic concerns. Industry consolidation has reduced the number of manufacturers while broadening their product offerings. The ability of each organization to take advantage of their product strengths, while pruning the less desirable offerings, is critical. In addition, 2000 was the worst year in more than two decades for Chapter 11 filings and bankruptcies. Many of the suppliers to the industry were hit hard financially by these closings and remain cautious as we head into a declining market.
Materials for windows and doors have continued to change and improve during the past decade. Wood products use vinyl or aluminum cladding to help achieve no-maintenance. PVC products are using wood in the compound, or veneers, to help achieve the warmth of wood and allow for staining or painting. Fiberglass products have the strength of aluminum and the ability to paint or stain. These trends keep suppliers on their toes trying to create new products that will perform well
on any or all of these possible platforms.
The efforts of various organizations to improve the energy efficiency of fenestration products could not have come at a better time. Consumers look for windows and doors to keep us comfortable as well as protect us. While most of North America is experiencing the coldest winter in many years, we are paying two to four times more for heating and power than we did just a year ago. High-performance and highly-efficient products could not have arrived at a better time.
During the energy crisis of the 1970s, windows were considered the weak link in the building envelope and were limited in size due to energy loss. With advancements in glass technology and overall window performance, windows are considered almost as energy efficient as the walls. As a result, window sizes have grown larger causing requirements for components that will function under loads similar to the weight of a door.
Aesthetically Pleasing Hardware
Consumers are not only expecting to have aesthetically matching hardware for both door and window products, they want hardware to be visible yet fold-away from window treatments. This has caused the use of folding handles for casement and awning windows.
Fenestration products are expected to keep us safe and many consumers are now looking to multi-point locking systems for doors and windows to achieve that feeling of safety. Multi-point locks for doors and windows became common during the 1990s and continue to gain market share.
The final trend that is gaining momentum in our industry is the use of combination locks and tilt latches for hung windows. Our company has patented a concept that allows the consumer to unlock the window and tilt it for cleaning with a simple operation of the lock mechanism. This creative approach to an old product makes washing the window simple for the user.
Many challenges await our industry in the new millennium. Performance requirements will only become more important and easier to determine for the consumer. Differentiation with creative new products will certainly become more critical.
Jim Quinlivan serves as sales manager for Truth Hardware based in Owatonna, Minn.
PVC Windows Gain Ground
by Dave Byers
2000 was a year of growth and rapid changes. At L.B. Plastics, we are pleased with the successes our family of window and door fabricators are experiencing. They are expanding market share and broadening into new market segments.
2001 will give all of us some challenges. The current uncertainties of the economic climate will cause our industry to have slower growth overall. However, we also believe real gains can be made in window replacement as more homeowners will choose to upgrade their homes rather than move into more costly ones. Buyers are ever more savvy and will look for proven performance instead of relying on sales sizzle.
PVC in the Residential Market
Because of the improved knowledge of the retail customer and the builder, PVC windows should continue to gain market share in the new construction market. In particular, we see high quality PVC fenestration systems increasing their presence in the middle, upper-middle and upper-income housing markets. We have products that will meet the demands for this higher income market. PVC windows and doors will also gain in market share for the lower income homes.
An increasing number of builders will recognize the advantages of PVC when it comes to associated costs. In comparison to competitive products, PVC windows offer several advantages including customer acceptance, ease of installation, no painting or staining, availability of colors, building code acceptance, energy efficiency, National Fenestration Rating Council compliance, easy clean-up and low maintenance. These advantages will enable the builder to look at the true installed costs of the windows and doors versus their value.
PVC in the Commercial Market
We also believe that the attributes of PVC window and door systems will be increasingly recognized in the commercial market segment. This market will require a more professional selling system and require window fabricators to focus on products offering proven results through exhaustive testing and historical usage. Architects and building owners will only accept PVC fenestration products once they are satisfied the product will meet their demands for performance and installed product life.
Dave Byers serves as sales manager of the window and door division of L.B. Plastics based in Mooresville, N.C.
Alternative Materials–Waiting in the Wings
by Tom Wright
Most everyone associated with the fenestration industry realizes that for the last six to eight years there has been an overcapacity of window production in the United States. The booming economy allowed this capacity issue to continue without too much of a problem until the last half of 2000. This is when we saw several large window manufacturing companies file for bankruptcy, with several others on the verge.
New construction window sales will be down somewhat in 2001 because of the lower anticipated housing starts but the replacement window segment will be up. With higher interest rates and energy costs, homeowners will decide to stay put until the economy decides which direction to go. Past history tells us that when homeowners decide to stay put, they also decide to fix up. With higher home heating bills, they will make improvements to their home to save money, and usually doors and windows are at the top of the list.
Alternative material products will begin to make a greater impact in the door and window industry in 2001 driven by high energy costs, the demand for maintenance-free products and overall better performance, than current materials have to offer. Wood, aluminum and rigid vinyl have all, at one time or another, been touted as the best building material the industry has to offer. I believe an alternative material is waiting in the wings. Cellular vinyl, woodflour, a wood/plastic composite, or some other alternative material will begin to gain acceptance in 2001.
Tom Wright serves as national sales manager of industrial window products for Marley Mouldings, based in Marion, Va.
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