Volume 42, Issue 11 - November 2007
Feast or Famine
Glazing contractors know only too well that the level of activity in the construction market can make the difference between feast and famine. So can the location, especially if there are factors such as natural resources or work stoppages that can affect local economies. Glazing contractors in Canada offered a few projections about what they expect in their areas in the year ahead.
Eastern Canada: Ups and More Downs
According to Paul Dean, secretary-treasurer of Tri-Tech Glass & Mirror in Stouffville, Ontario, most contractors are doing well, “but we never know how long this will last. Feast or famine seems to be the nature of our business.”
Dean describes the current situation as the feast, pointing out that 2007 has been a good year, following a slow start. He says business is up, but questions the future. “ should keep us busy but who knows? Do you have a crystal ball?” he asks.
Tom Huppunen, technical adviser for Scandia Glazing System Ltd. in Fenwick, Ontario, believes 2008 will be a good year as well.
“Our business has picked up in 2007. The market is good for us, with a lot of towers going up in Toronto,” he says. Business is also improving for Barton Glass in Hamilton, Ontario, following a poor start. “We had one of the worst summers in twelve years,” says Paul Hayes, president. He explains that it was due mostly to very few school projects. “Last year we had 15 to 20 people working on schools. This year we had none,” he says, “but things are looking up.”
Hayes is encouraged by opportunities he sees in the fall which he points out should continue through the winter and, he hopes, into the spring.
His challenge is not a unique one, but, rather, is characteristic of any business—getting new business.
Shawn McHale, president of Ottawa Valley Glass in Renfrew, Ontario, says there has been no slowdown in the number of projects to bid. But he points out that many of them have been delayed due to strikes, long delivery times and manpower shortages. He describes the challenges that are faced as significant. “Skilled trades people, vital to our success, are increasingly hard to find. Qualified project managers and estimators are also in high demand and very few are available,” he says.
Another challenge is the duration of significant projects such as hospitals, airports and water and sewage plants. McHale points out that these can take several years to complete.
“This puts extreme pressure on cost control for both labor and material,” he says.
In spite of these problems, McHale is very optimistic. “Our order book is quite full and we anticipate a very busy year ahead,” he says.
John Goodison, sales manager for Barber Glass in Guelph, Ontario, says that while 2007 has been a blockbuster year in the commercial area, he expects that 2008 will be somewhat slower. “The sub prime influence, coupled with a stagnating U.S. job creation situation, is stifling residential housing, which will have longer-term effects on the commercial glazing industry,” says Goodison.He points out that there is one factor that will offset the softness in the market.
“On the flip side, architects and designers are increasingly specifying sizes and more complex products,” he says.
Goodison says the biggest challenge is not a new one but nonetheless significant: lead times.
“Glazing contractors are the last major part of the building process and the general/owners are looking for this trade to make up lost time,” he says.
Western Canada: Stampeding Market
“The market in British Columbia is booming,” says Dave Husson, owner of DH Glass Solutions in Victoria, British Columbia, a consultant to glazing contractors. “Business has been very good in 2007 and will remain at this level in 2008.”He says the local contractor’s association is predicting that construction will be strong through 2015. Although this is often attributed to opportunities created by hosting the Olympics, Husson believes the underlying factors have to do with confidence in the local economy and strong investments. He points out that there are factors, including a very strong Canadian dollar, that could impact this growth. Even more significant, and the challenge for glaziers in the region, is the labor shortage. “It is huge and the [Glazing Contractors Association of British Columbia] set up a task force to see what could be done,” says Husson.
He says one of the accomplishments was establishing an apprentice program which proved to be successful. The program has since been expanded to outlying areas, including Vancouver, because the labor shortage is so significant. Clearlite Glass in Victoria, British Columbia, is among those glazing contractors that have been affected.
“Our challenge is keeping up with the work because we do have a labor shortage here. Finding good labor is one thing, but just finding people that we can train to get the work done is another,” says Dan Kotyk, president.
He says the company has had a lot of projects this year and is projecting the same results in 2008 because sales are expected to be just as strong.
“It’s a good time to be in the glazing business in this part of the world,” he says.
The situation in Alberta is no different.
“The commercial market in Calgary is booming,” says Stephen Hargrove, president of Wescom Glass and Aluminum Ltd. in Calgary, Alberta. “I have been turning down business, which I hate to do.” There is a very good reason for the strong market in Alberta. Although drilling is not new to this area, the demand for and rising cost of oil have driven the economy, according to Hargrove.
“Our economy has outperformed the rest of the country for the last two years and most of it is due to the oil and natural gas industry. We are the Texas of Canada,” he says. Given the nature of the market, the forecast remains the same for 2008. Hargrove points out that the economy nationwide is in good shape, although west of Toronto it has been exceptional. He describes the economic climate in Ontario as healthy even though there has been a significant loss of jobs due to globalization.
Keeping Up with Challenges
“Our biggest challenge is labor and it is not just a problem in glazing. The problem exists in all trades. Overall, the industry is in dire need of skilled labor,” he says.
The labor issue goes beyond Alberta and British Columbia. It is the biggest challenge for Clearlite Glass in Saskatoon, Saskatchewan. “We face three major challenges,” says Corey Hunchak, president of Clearlite, “the lack of skilled labor to accommodate extreme peaks in the market, an aging labor force and a lack of civic planning to accommodate mass growth.”
Hunchak says that attracting youth to the construction industry is more difficult than in past decades. He also sees problems with roads and transit systems.
“A 10- to 20-percent population boom would create total traffic mayhem. Our civic planners need to analyze what needs to be done,” he says.
As far as the market, he says Saskatchewan currently is very stable and has experienced steady growth over the past two-three years.
“Unlike our neighbors to the West that have enjoyed extreme booms over the past several years, Saskatchewan tends to be less apt to change and probably would not be able to keep up with a boom comparable to Alberta,” says Hunchak.
He explains that 2007 was a year of marginal growth in the commercial market compared to 2006 and he sees 2008 following the same pattern of growth.
Philip Aquin, general manager of Transparent Glazing Systems in Burnaby, British Columbia, sums it up this way. “Right now the market is unbelievable. We have so much work, but a shortage of labor makes things rather challenging. This (situation) is typical of our business.”
Still, Aquin knows that the challenges posed by industry labor shortages are preferable to the challenge of a construction downturn. “It is either feast or famine and right now we are enjoying the feast.”
Alan B. Goldberg is a contributing writer for USGlass.