FromGoodtoPrettyBad_feature, USGlass, October 2010

Volume 45, Issue 10 - October 2010

feature

From Good to “Pretty Bad”
By Megan Headley

To know how better to serve our readers in these challenging times, we at USGlass conducted an in-depth survey among our readers in the contract glazing business. Respondents were asked via e-mail to respond anonymously to questions about their time in the industry, their businesses, the challenges they face and their plans for the year ahead. The responses to the 2010

USGlass Contract Glazing Survey paint a different picture than our last edition of this biennial survey (see November 2008 USGlass, page 30), as one might well imagine.

This year, we spoke with professionals across the country from a range of business sizes and experience, spread out across the country. Thirty percent of our survey respondents are with companies that make less than $1 million in annual sales, with another 36 percent making $1-$5 million; 41 percent of respondents work for companies with 10 or fewer employees. More than half of these survey-takers (57%) have been in the industry between 20 and 50 years, providing a wealth of knowledge and insight into today’s challenges.

The State of the Glass Business in 2010
In 2010, 16 percent of the glazing contractors surveyed saw increases in their annual sales, compared to 2009, while 11 percent saw slight increases in their profit margins for that same period. Roughly 30 percent were lucky to see sales and profits remain stable for the year. More than half of our respondents saw decreases across the board.

Some of those profits will translate into purchases for the next year, we learned. Many glazing contractors have invested or are making plans to invest in material handling equipment, trucks and software in 2010, and again in 2011.

Such investments seem to be the result of improved expectations for next year. An optimistic 32 percent of survey respondents expect their project backlog will increase in 2011, while 47 percent see it remaining stable next year, for good or bad. This is compared to the 17 percent who report that they’ve seen an increase in their backlog this year, compared to 2009. For 2010, 61 percent of respondents remaining point to drastic drops averaging around 40 percent.

Challenges Facing the Glass Industry
It’s not surprising that few glazing contractors see a silver lining when looking at the industry this year. While only 3 percent see an “excellent, healthy business” right now, and an additional 11 percent of our respondents reported that business is good, most were not so optimistic. More than half—60 percent, in fact—are facing significant challenges to their businesses. Most of those respondents singled out the economy (58%) as their company’s single greatest threat, with competitors’ low pricing a close second (23%).

One subcontractor shared a tip for surviving the storm: “Although our profit margins are quite low, our company has strived to provide tremendous service to our existing customers. Retaining great relationships with our best general contractor’s have undoubtedly carried us through this economic storm,” the survey respondent noted.

Not surprisingly, finding qualified labor is low on the list of problems at this time (1%), as are material and energy costs (3%).

Several respondents pointed to state and federal regulations and the lack of code enforcement and knowledge as continuing problems making their jobs increasingly more challenging.

Interestingly, foreign competition doesn’t concern most glaziers at this time—a full 42 percent of our survey-takers report that this item has the least adverse impact on their business today.

The Results of the Biennial USGlass Contract Glazing Survey

Learning New Technology
A small percentage of the glaziers we surveyed (20%) have used building information modeling (BIM) on a project thus far. Of those that have used it, they still seem to be dabbling, with the majority of those respondents (80%) having used BIM on fewer than five projects—although several (38%) have invested in BIM software.
Of the 80 percent that has yet to work with BIM, fewer than half of our survey respondents (42%) see this new technology coming their way in the next two years.

Working with Architects
Only 3 percent of our glazing survey respondents would say they work with architects that are “highly” educated about glass and metal (36 percent of our respondents find the average architect to be poorly educated on the subject). And yet, a full 10 percent of respondents say they provide no training to architects during a given visit and 23 percent of our respondents say they’re offering less education than in the past—perhaps leaving that task to the manufacturers.

Despite the best efforts of suppliers and glaziers alike, 17 percent of our respondents still find that architects are specifying inappropriate materials for installation more than half of the time.

“The biggest problem is that architects have no idea what they are doing and it is almost impossible to hold them accountable for their incomplete designs and shoddy specs,” commented one anonymous survey respondent. “They need to share in the financial success of all the contractors to get paid—that would fix them.”

Megan Headley is the editor and Ellen Rogers is a contributing editor for USGlass.