Where’s the Glass Going
Glass Shops Respond to Residential Construction Demand
by Megan Headley
During a Construction Outlook Conference last year, Robert Murray, vice
president of economic affairs for McGraw Hill Construction, forecasted
that total construction would rise 11 percent in 2010, partly buoyed by
a 32-percent increase in single-family housing construction starts (see
December 2009 USGlass, page 28). Meanwhile, this month the American Institute
of Architects released its semi-annual Consensus Construction Forecast,
which reported that nonresidential construction spending is expected to
decrease by 13.4 percent in 2010.
“When economies emerge from this prolonged recession, recovery for nonresidential
construction activity typically takes longer,” says AIA chief economist
Kermit Baker in the report. “Hardest hit will be the commercial and industrial
sectors, with projected declines in the 20-percent range for 2010 in most
So where once the commercial glazing industry worried over the small and
residential contractors taking on jobs beyond their capabilities (see
February 2009 USGlass, page 30) in 2010 this movement may be reversed.
With the start of 2010, Aaron Day, president of American Glass Inc. in
Springfield, Mo., has seen an optimism return to construction professionals
in his region. “I know a lot of our local builders are fairly optimistic
about the new year,” he says. “I think demand, at least in our area, is
increasing and the supply is decreasing. It seems as though the builders
I’ve talked to all have a few things to look forward to in the new year.”
That increase, and optimism, refers specifically to the area’s residential
“I think we’ve definitely seen the bottom of the residential [downturn]
and it’s very slowly increasing,” Day says. Local commercial construction,
he says, is “definitely” on the decline.
Day adds, “We’ve been a little bit immune to some of the national ups
and downs over the years … but this has been a little different.”
The Glass Doctor franchises provide commercial as well as residential
glass replacement across the country, offering them an overview of across-the-board
demand. Its president, Mark Dawson, says the company, overall, “projects
market growth to be between 4 to 5 percent a year over the next three
years. Demand should continue to outpace the gross domestic product. Even
though remodeling activity has been declining, we should see the first
signs of recovery beginning the first half of 2010.”
Paul J. Rowan, vice-president and Midwest regional manager for Trainor
Glass Co. in Alsip, Ill., says that demand is not there yet, for either
residential or commercial glass, but it’s coming. “They are both down
right now, but we have seen some movement.”
Rowan sees variances by region, in two ways: “both volume and price. We
have a couple areas where we are getting a lot of traffic and others where
it is a little slower,” he reports. “In addition, what you sell for
in one region may be high or low in another area. You need to make
sure your pricing structure works for the area you are in,” Rowan advises.
Solar Innovations of Pine Grove, Pa., a manufacturer of products ranging
from greenhouses to curtainwall, is seeing regional variances in demand
“Pockets of customers in the retirement areas of the country and those
areas that provide more economical living and energy costs also appear
to have higher demand,” says Greg Header, president of Solar Innovations.
“There are also pockets of customers who aspire to live ‘greener’ lifestyles,
in terms of natural daylighting and passive solar, who provide greater
demand to our industry”
As construction—and, by extension” glass demand—begins to slowly seesaw
away from commercial glazing to residential glass products, those shops
that offer full-service glass needs are uniquely situated to observe changing
demand. For example, Day has watched commercial work drop off as some
residential demand returned.
“Probably as early as last summer the amount of work to bid really dropped
off,” he says. “I have seen a number of commercial remodels, replacement
windows, that sort of thing.”
Header says that contractors are moving forward with projects that were
previously planned but put on hold for financial reasons. Those commercial
projects are changing, though, as demand for “smart” glass products grows.
“Commercial glass has moved away from the ‘chocolate and vanilla’ flavors
of yesteryear and has moved into more specialty types of glass. Triple-pane,
high-performance, low-E and other blended types of glass are now of greater
demand,” he says. “Those jobs which require only middle-of-the-road glass
seem to be working with narrow margins, making them less desirable to
some glaziers and manufacturers.”
Products in Demand
Although Glass Doctor has seen remodeling drop, others say that renovation
projects are still more common than new construction.
“We are seeing some changes,” Rowan says. “There is a lot more going
into renovation instead of new construction. It is taking a little
time to get rolling because we have to educate our customers on what you
can do with glass these days.”
In areas where residential glass sales are picking up, shower doors sales
are among those showing some signs of growth.
“There seems to be a lot of shower doors going out, a lot of bathroom
remodeling going on,” Rowan says. He offers a word of advice to promote
those sales: “They key is to get the customer in our store so we can really
show them what the uses are for glass now; they are amazed but very interested.”
Header has seen increased interest in skylights for daylighting, as well
as high-performance door and window systems. Greenhouse product sales,
too, are reportedly on the rise. He speculates that this is due to green
trends, such as interest in growing locally and controlling the food source. “We
attribute part of the growth in the glass structures segment to that increasing
awareness of health benefits related to exposure to sunlight,” says Header.
For new residential construction, custom homes are occurring regularly.
“Usually the higher-end custom homes—they’ve held up real well for us
throughout the whole year,” Day says. “At least in our area, for years
there were a lot of high-end ‘spec’ homes built … that’s gone and not
back and probably won’t be for some time to come.” He adds, “But the real
inexpensive homes, there’s still a fair amount of that going on.”
Header says many of the changes the company has seen have been in the
type of customer approaching them.
“It appears that customers have become accustomed to the times we are
living in and are spending on projects—oftentimes those which have been
previously planned—but have become substantially more value conscious.
Customers are not just signing a contract blindly; they want to be sure
they need and want all the options offered to them. Customers are looking
at a blend of design, purpose, form and function so they can be sure they
get what they need in terms of product value. We have seen a more discriminating
buyer—and fewer overall,” Header says.
Rowan adds, “[Homeowners] want to know all of their options before they
purchase, so the sale may take a little work to get within a budget that
is similar to the commercial side.”
“I think we’ve definitely
seen the bottom of the residential [downturn] and it’s very slowly increasing.”
—Aaron Day, American Glass Inc.
Most experts agree that 2010 will be another year of keeping a close eye
As Day says, “I think in any business it’s a challenging time, and you
really have to keep a close eye on the costs involved. The margins have
really dwindled, that’s for sure. I think any business has to run much
more efficiently, making the most of their time and getting the most production
out of each employee.”
Header adds that companies now need to be more “customer-focused” than
ever, and more willing to solve customer’s problems as relationships are
paramount in generating work in this economic climate.
“Companies must partner with customers to create what they need for projects
since the aesthetic and architectural desires have become more specific,”
he says. And that works in both directions; he advises working more closely
with suppliers and other partners to drive down costs.
If I’d Known Then What I Know
It’s been said time and again that no one fully expected
the depths of the construction downturn faced in 2009, making it difficult
to put faith in forecasts for the year ahead. Instead, USGlass asked several
industry professionals to take a look back at the lessons they learned
in 2009 and share what they would have done, or advised, differently if
they’d had a more accurate prediction to follow.
Devin Bowman, national sales manager, Technical Glass Products
I’m sure there are a number of things we’d have all done differently if
we’d had the foresight to know the depth of this economic downturn. One
thing TGP has focused on is using the current lull in construction as
an opportunity for improvement. Any recession is the perfect chance to
slow down and really think about how to improve one’s organization and
business. We’re using any extra time to better manage our inventory levels,
focus on research and development initiatives and update and improve our
It’s also allowed us to get back to the basics and spend more time with
architects and those in the design community. One-on-one relationships
have never been more valuable. 2009 was a transitional year, and one that
we hope will push us forward when the construction market rebounds.
Kelly Townsend, national sales director, Columbia Commercial Building
We started seeing possible issues in mid-2008 when the price of aluminum
started dropping and started adjusting purchasing habits and inventory
levels accordingly well before the start of 2009 and have continued to
adjust as needed as 2009 has rolled on.
Obviously no one in the country knew exactly how bad the economy would
slow but the only things we might have changed is how quickly we made
adjustments as 2009 has continued, in terms of days or weeks not months
We continue to work hard and have found ways to market our existing products
to customers that have also been forced to downsize such as offering fabricated
storefront, custom break metal and factory truck deliveries. We have worked
very hard on the architectural side of the business to further develop
future opportunities as well as working with our vendors to explore ways
to continue to control or lower cost and maintain our lead-times so we
could be and remain competitive in the current market.
Pete Chojnacki, president, Fabtech LLC
We would push harder to build backlog during the summer when we were very
busy. I think we got caught up with our busy schedule and getting
product out the door for customers. We ended up 2009 up about 25
percent over 2008. So, we were cranking over much of the year. However,
after Thanksgiving, the visible backlog was declining. If we had
concentrated more on getting our message to new prospects, we could have
helped bridge the slow times better. Going forward, we established
better metrics to forecast quotes and jobs earlier and react accordingly.
I would have advised others to be sure to scrutinize every expense to
be sure it is truly contributing to the growth and profit of the business. I
have seen numerous examples of companies continuing with optional spending
well after the market was obviously slowing. We all need to make
the tough decisions earlier to eliminate all unnecessary expenses.
Ron Crowl, president, FeneTech Inc.
Going into 2009 FeneTech made the decision not to participate in the industry
downturn. Easy to say—much more difficult to do. We have been very successful
in this endeavor as our business has grown considerably during these difficult
times. Our strategy was to aggressively pursue opportunities in vertical
market segments and geographical areas that we previously did limited
work in. We also wanted to introduce new products to both our existing
clients as well as new prospects …
My advice to other companies is to consider the proactive things that
you can do to grow the revenue line—specifically marketing activities
that raise awareness of your products and then providing the support and
tools needed to make doing business with your company easier for your
Looking back, I think I would have directed even more resources (financial
and personnel) in the pursuit of new business in the vertical market segments
and geographical areas we previously did limited work in before.
Megan Headley is the editor of USGlass.
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