Volume 42, Issue 5 - May 2007
Volume 42, Issue 5 - May 2007
| Growth Spurt Contract Glaziers in the West are Staying Busy with Increased Business by Peggy Georgi Contract glaziers working in the Western states don’t have a whole lot to complain about these days. After all, prime living locations, temperate weather, a stable economy, business growth and up-scale amenities make for a highly sought after (and expensive) segment of the country to live, work and play. It also doesn’t hurt that Arizona and Nevada are two of the fastest growing states in the country or that Arizona, California, New Mexico and Nevada are home to seven of the top ten fastest growing cities in the country with populations of more than 100,000. The region’s construction industry doesn’t look too bad, either, as the area has become a hotbed for building work. According to McGraw-Hill’s 2006 annual survey of general contractors, those working in Arizona, New Mexico and Nevada reported combined revenues totaling $14.8 billion—a 24-percent increase compared to the year before. And that’s good news for contract glaziers who are responding well to an increasing demand for their services. With this kind of growth, the market in the West is anything but stagnant. Here are three trends that glaziers
notice: Copeland says they have sold more in the past quarter than in the last three quarters of 2006. “The recent growth in our business is directly related to our niche and clients,” Copeland says. “While a downward turn of property values and increasing interest rates has slowed work from the development side in our area, our clients, who do not rely on borrowing money for their purchases, are taking advantage of the low property values and reinvesting their monies through the purchase of these properties and developing new locations. It’s been good for them and good for us.” It’s a similar case for Phoenix Caulking and Glazing Co. “We’ve doubled our volume from a year ago,” says Rich Dunn, the company’s chief financial officer. “[Phoenix] had the largest increase in population over any other city in the country between 2004 and 2005, and is well into a major commercial construction boom.” According to Mike Fish, a project manager with Phoenix Caulking and Glazing, population growth has been the driving force behind the increased demand for office and retail space. “We have new companies moving into the area and they need buildings to house their employees and that’s been good for business,” Fish says. Connie Davis, office manager for Glass & Door Designs, which has locations in the California counties of Riverside, Los Angeles and Orange, says 2007 started off slow for them, compared to what they saw last year. “Unlike many other companies in this market segment that experienced banner years in 2004 and 2005, we had a slowdown in 2004,” says Davis. “Business picked up in 2005, and 2006 ended as one of the best in the company’s history.” She says they do have contracts and work scheduled, but have been in a holding pattern as they are waiting for the general contractors to be ready for them. “Waiting to get to the jobsite makes it feel like things are a little slow right now,” Davis says. In Silver City, N.M., Julian Osorio, owner of Grant County Glass, says he has experienced about a 20-percent increase each year since he purchased the full-service glass business more than five years ago. In an area that is highly dependent upon the local mining operations, Osorio says he has secured a number of contracts with local mines, and that has helped him grow the business. “We service the southern New Mexico region and are opening another shop in Las Cruses, a larger city, which will enable us to expand into the residential market while we continue to capitalize on the commercial end,” he says. Greg and Lavonne Griffin are the owners of White Mountain Glass in the resort town of Ruidoso, N.M., which overlooks the Sierra Blanca Mountains. The town is home to expensive second and third vacation homes where everyone wants a view of the mountains, but there’s not much else there. “The market is good,” says Lavonne Griffin, “Even though we are in the middle of nowhere they are building like crazy here,” she says. “Business is booming,” says Mark Umpleby, manager for Fast Glass, a full-service glass company in Winnemucca, Nev., a small mining town in the northeastern part of the state. “There is a lot of building [residential and commercial] going on all around us and the town is growing like wildfire,” says Umpleby. “We are seeing an influx of people moving from the cities to the suburbs and beyond. They bring with them the need for housing, office and retail
space.” “One challenge for us and others in our industry involves suppliers cutting back on their staff,” Copeland says. “Because our suppliers are understaffed this makes our job more difficult to coordinate orders and get them to the job site in a timely manner. We are only as good as our suppliers and their cutbacks have definitely brought about another challenge to our work.” Fish agrees, especially when it comes to insulating glass units. “Suppliers are swamped and the time frame [to receive the units] has gone from a couple of days to up to four weeks, currently,” Fish says. “I think the suppliers are struggling with similar labor issues,” Dunn says. “Lack of quality workers, being understaffed and overloaded with orders contributes to their ability to keep up, process and deliver our orders in a timely fashion. We’re working through it the best we can.” 3) Labor Shortage “Work is so plentiful in our area the good employees are taken and potential [younger] employees don’t seem to be looking,” says Dunn. “Our saving grace is that we have a very low turnover so once we find a good fit, they become one of the family and typically stay with us for a long time.” “Labor is our biggest issue right now,” adds Umpleby, who puts in long hours and does a lot of field work himself just to help the company keep up with demand. “We just can’t find the people we need.” Osorio agrees. “We can get the business, yet we struggle to find employees to get the work done,” he says. “We prefer those with experience but often, we bring in those with potential [when we can find them] and train them.” “It seems we are a dying breed,” says Griffin, explaining that fewer and fewer young people are choosing to enter the glazing business. “Finding workers is difficult enough then add in increasing labor, insurance, worker’s comp costs and the premium you have to pay to get the type of employee you need … it’s rough.” “We struggle to find qualified employees at every level from the field to project foremen to upper management,” adds Copeland. “This industry’s labor pool has been shrinking and it’s a major problem that impacts us all.” Another labor issue with which contract glaziers are faced occurs when some general contractors hire workers who have minimal field
experience.
Residential Rebounding and Commercial Climbing According to Robert Denk, an economist with the National Association of Home Builders (NAHB), the country will see the housing market return to a relatively normal activity pattern in 2007. “Over the past several years, Arizona, California, New Mexico and Nevada have followed the national housing trends,” Denk says. “By and far, they had overheated years in 2004 and 2005 followed by a slowdown in 2006. These states will experience normal levels of housing activity through the end of this year and can anticipate steady, moderate growth into 2008.” And what about the commercial market? According to the Greater Phoenix Chamber of Commerce there is more than 8 million square feet of warehouse space under construction in metropolitan Phoenix with some 3 million square feet of office space expected to go up valley-wide this year. The valley’s retail vacancy is 5 percent—lower than it’s ever been—and currently, there’s 6.6 million square feet of retail space under construction in metropolitan Phoenix. State Industry Employment Growth Rankings (December 2005 to December 2006) Employment Trends for Glaziers Single Family Housing Starts Annually by State and Year in the Far Southwest Population Estimates for the 10 Fastest Growing U.S. Cities with Populations over 100,000
the author: Peggy Georgi is a contributing writer to USGlass magazine. |