Volume 13, Issue 9 - November/December2012

What's News

national news
Analyzing Sandy: What Impact Will She Have on the Industry?

When Hurricane Sandy first hit, those in the door and window industry wanted to make sure their friends and colleagues were safe. Tyson Schwartz, vice president of sales and marketing for Thermal Industries, based in Pittsburgh, even said it was difficult to get back to work while worried about its dealers in those areas who were affected. Others such as Chuck Scalzott, chief operating officer, Vytex Windows in Laurel, Md., spent the days during and following Sandy worrying about his son who lived in New Jersey and his own home in Brigantine, along with dealing with issues at the plant such as delayed deliveries due to the storm and concerns about worker safety.

Crystal Windows and Doors based in Flushing, N.Y., Northern Building Products in Teterboro, N.J., and Ideal Windows, with three plants in Bayonne, N.J., also suffered some delays due to the storm but made it through relatively unscathed—the biggest loss being that of production and delivery time. But challenges remain. At press time, gasoline shortages continued to be a challenge.

“As of now, our biggest production problem is the inability of our team members to get enough gasoline to get to work and back home,” said Bob Pecorella, president of Northern Building Products approximately two weeks after Sandy.

Silverline Windows in Brunswick, N.J., has been supplying the Red Cross with diesel fuel and space for the command center at its New Jersey facility, and Silverline’s parent company, Andersen Windows, donated $75,000 to the Red Cross for the relief effort.

“When the Red Cross generators ran out of fuel … Andersen pulled diesel fuel from its own storage tanks to keep the Red Cross operational with trucks and vehicles and power,” said Jay Lemke, Andersen spokesperson.

“The team did a great job supporting the relief efforts, including setting up and keeping the Red Cross connected with their vehicles and volunteers, while at the same time working to get its operations up and running [the facility lost power for a week].”

Industry professionals are being resilient and helping in any way they can. Crystal Windows announced a discount on vinyl windows for impacted residential homeowners. The discount is available through the company’s network of window distributors, dealers and home improvement contractors throughout the tri-state New York, New Jersey and Connecticut region. To ensure the discounted pricing message gets out to all victims of Hurricane Sandy, the company has altered its New York Metro area radio and print advertising to highlight the new program.

“Our hearts go out to those who have suffered from this natural disaster,” said Vincent Grieco, New York metro sales manager for Crystal. “Our hope is that this discount helps in some small way those affected to rebuild and repair their homes and get their lives back to normal.”

The discount is available to one- and two-family residential homes for Crystal vinyl window and sliding patio door products. The offer is scheduled to run through the end of the year.

Less than one week after Hurricane Sandy, Thermal Industries, also announced a program to help those affected. The company’s disaster relief programs are available to homeowners in officially designated disaster areas and states related to the hurricane. These special programs include several discounted replacement window programs and payment options to help homeowner disaster victims get back on their feet and restore their homes.

“We especially feel connected to the storm survivors because many of our own employees, family members, friends and customers are living in the severely affected areas,” says Schwartz. “Many of our friends and family are not only starting to survey the damage but they are living through it.”

Will Sandy Create a Surge?
In the days following Sandy, many contemplated whether or not the storm would create a good news-bad news scenario in that it would equate to an uptick in a badly hurting construction market. Experts differ slightly on whether or not this will occur.

The National Association of the Remodeling Industry’s (NARI) third-quarter Remodeling Business Pulse data says new weather-related developments are assumed to impact the remodeling industry on the East Coast next quarter as homeowners start to rebuild.

“Hurricane Sandy’s destruction will likely spur more activity on the East Coast,” said Tom O’Grady, chairman of NARI’s Strategic Planning & Research Committee.

Other data sources disagree. Reed Construction Data hosted a webinar on November 8, Ken Simonson, chief economist, Associated General Contractors of America, said he disagrees with those who predict an uptick.

“What they miss is the projects that were interrupted or canceled because they don’t have funds available,” he said. “A lot of that money will come from other pockets of the budget. You will see some surge of materials but this is a very small piece of a large economy.” Bernard Markstein, chief economist for Reed, said even if construction does increase it won’t be anytime soon saying many homeowners won’t collect their insurance money for quite some time.

“Some structures won’t be rebuilt,” added Kermit Baker, chief economist for the American Institute of Architects (AIA). “Some projects will be delayed for years. We are talking about an $850 billion construction market so rebuilding from Sandy is not a big part of the national total. It will be regional but it won’t be dramatic.”

Votes Counted: Now What? Experts Predict Affect on the Industry
Two days after the presidential election, Reed Construction Data hosted a webinar in which economic and housing experts discussed the impact President Obama’s reelection will have on the residential construction industry. What’s the overall impact? Not a drastic one, agreed the experts. But it could bring issues such as climate change back to the forefront according to one industry supplier. “It is incredibly modest,” said Kermit Baker, AIA’s chief economist. “Things look the same now as they did on November 5. There are no dramatic changes as to what we can expect.”

“The election doesn’t affect our forecast as much as you would think; it affects it as far as the impact on the economy but there is a lot that is baked in the pie already,” said chief economist Bernard Markstein.

Baker did, however, say that one thing has changed: “We can’t use the election excuse any more for delaying decisions,” he said. He added that during the election many serious issues such as the cliff and tax issues were put off and these now must be made a priority.

“Quite dramatic spending cuts will be made but they won’t come until the eleventh hour,” said Baker.

Ken Simonson, chief economist for the Associated General Contractors of America agreed that a decision won’t come early.

“We are getting ever closer to that cliff,” he said. “We won’t know if we are going over the cliff until New Year’s Eve and that is very worrisome. That will affect investment decisions by companies, stock market, etc.”

Baker said the mortgage interest deduction may be at risk, as serious government money is left off the table here. Baker added he was surprised how small of a role housing played in the election as it usually is integral to an economic recovery.

“The distressed housing market has to be dealt with,” he said. “Fannie Mae and Freddie Mac also have not been dealt with. They cannot be eliminated until a replacement is up and operating.”

Baker may have surprised some when he said that immigration policy, not usually seen as a housing issue, “should be dealt with as a housing issue as immigrants account for a large share of net household formation.”

Another issue President Obama will have to contend with is implementation of the president’s health care plan. “With the election settling we now know we won’t repeal ObamaCare though we still don’t know how we will fund it,” said Markstein.

He ended with some dismal news telling attendees they need to stop thinking there will be major additions of manufacturing jobs.

“The idea that there will be tons of employees in manufacturing is a dream we have to let go,” he said.

When attendees were able to ask questions many wondered if the outlook would still be the same if Romney was elected.

“We would have seen gridlock with either candidate,” said Markstein.

“The differences are really more long term, shaping fiscal policy, etc.,” added Baker. “In the short run it’s hard to make an argument that there would have been significant differences [if Romney was elected].

Chelsea Building Products offered an informative webinar for the industry on November 9 and economic expert Dr. Peter Linneman, principal at Linneman Associates, also addressed the election and pointed out that it was we who determined the president.

“We have essentially the exact same players to deal with these problems and that’s who we voted for … until something happens this is a fundamental challenge to deal with and it basically comes down to whose ox is going to get gored,” he said.

But most in the industry are hoping that serious issues will be tackled. Mark Silverberg, the president of Technoform North America, said the devastating impact of Hurricane Sandy (see page 18) might bring climate change—a topic for which the lack of discussion among the political candidates became an issue in itself back to the table.

“Hurricane Sandy put climate change on the table in a stark way that transcended politics,” he said. “The next four years will see a more engaged, holistic dialogue about the sustainability of our choices in the buildings we live, work and learn in. The glass and glazing industry can make an important contribution to this dialogue, and bring light to the benefits of the tremendous innovations our industry has created. We will have to choose to be engaged in this dialogue to influence it,” Silverberg said.

Superstores
Doers Brings Windows to Walmart

Doers Window Manufacturing, based in Tampa, Fla., has partnered with My Home Renovator (a division of Home Performance Network, HPN) to provide energy-efficient windows for sale at Walmart.

The retailer recently initiated a pilot program in a few select stores to help support local businesses within communities along the East Coast. Walmart’s program allows a handful of small business owners in the home improvement industry to create their own store within the big box retail stores according to Doers. Doers Window Manufacturing is the wholesale division of NewSouth Window Solutions and manufactures the Sashlite window, along with other door and window systems.

President of HPN, Doug Ritzel, says he was looking for a unique window to compliment My Home Renovator for the Walmart project.

“So many windows seem the same and I wanted to offer something that would not only be different, but would fit into the energy model of HPN and My Home Renovator,” he says. “With the energy ratings the Doers Sashlite window delivers, and the private label of Nexis, we can offer something no one else can.”


DWM

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