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Is Business Heating Up in the Northeast?
Northeast Glass Fabricators Discuss Early 2011 Trends
by Megan Headley

As design activity begins to point up, glass fabricators in the Northeast are looking for signs that growth will continue for their region.

“I have to say the quotes are getting bigger,” says Eric Latin, president of Dundy Glass & Mirror Corp. in Springfield Gardens, N.Y. However, he adds, design quotes are still “a little out there in terms of time.”

Other fabricators agree that early signs are positive.

“Based on preliminary activity, we anticipate a slight increase in sales as the economic recovery continues across the commercial sector,” says Christopher McGrory, vice president of McGrory Glass in Paulsboro, N.J.

For some, this early activity is reason enough to opt for the optimistic view that 2011 will start to reflect an increase in sales.

“It’s hard to say—when I survey the window manufacturers that I sell to they say that things are going to be better in 2011 than 2010,” says Joseph Santelli of Santelli Tempered Glass Inc. in Monessen, Pa. “But,” Santelli adds, “they’re guessing too,”
John Dwyer, Syracuse Glass in Syracuse, N.Y., takes a more cautious view.

“Our expectation for business in 2011 is another year like [2010],” Dwyer says.

No Boom, No Bust?
For many fabricators, another year like 2010 might be cause for despair, but Dwyer points out that the Northeast region has, to some degree, suffered less—or, at least, differently—than other parts of the country.

“Business in our area is mixed. Not as good as it was a couple years ago, but not as bad as other areas of the country, from what I hear,” Dwyer says, defining “his area” as upstate New York and northeastern Pennsylvania. “This area never ‘boomed,’ so I think our ‘bust’ has not been as big.”

The Northeast Reports Increased Billings Revenue at U.S. architecture firms increased in November 2010, only the second monthly increase in billings since early 2008. At 52.0, the American Institute of Architect’s (AIA) Architecture Billings Index (ABI) recorded a three point gain from the previous month, and reached its strongest level since December 2007. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). Firms in the Northeast, Midwest and South all reported billings increases in November. Regionally, AIA reports that firms in the Northeast and Midwest are expecting more favorable conditions in the future, with half of the firms in each of these regions expecting growth.

Santelli, who has plants in Florida, Pittsburgh and has just opened a new one in Elkhart, Ind., has seen signs as well that the Northeast has ridden out the economic storm differently than other regions. “The Pittsburgh plant is doing really well—I’m not sure why,” he says. He ventures a guess: “I sell primarily to residential window manufacturers, so is it because the tax incentive [finished] at the end of 2010 and people have to get their glass ordered or is it because the economy is actually picking up—I’m hoping it is that,” Santelli adds.

McGrory says that sales have varied for individual product lines at his company; some steady, some moving up.

“Day-to-day business as a whole has been off but some of our product lines have remained steady and even experienced a positive upward trend: fire-rated materials, X-ray glass and anti-reflective glass,” he says.

Follow the Product
According to a recent forecast by McGraw Hill, most construction growth in 2010 has been and into 2011 will be in the residential segment (see chart at right). However, these fabricators are seeing some segments in nonresidential construction with opportunities for the glass industry.

“Hospitals, colleges and K-12 schools are the main users of our products and they are active … and we see some office building renovation work,” Dwyer says. He adds, “New office construction and retail are down in our market.”

Renovation remains an area of growth for this region.

“New York moved from the IBC 2003 to 2006 versions on December 28, 2010, so we’re a little behind our neighboring states in the switch from polished wired glass to fire-rated glass with impact safety ratings,” Dwyer says. In this case, being behind has been a blessing in that it’s provided a demand for Syracuse Glass to meet. “In our case, we’re working with Schott Pyran Platinum products, and we sold a lot of that for the school work this summer,” he adds.

McGrory, too, is seeing demand for fire-rated glass, among other products.

“[Increase is] mostly in our specialty products: building panels, fire-rated and X-ray product lines have continued an upward trend,” he says. “In terms of the fire-rated, it would be due to the implementation of code changes and the ability to ship orders in one week or less.”

For those other products, McGrory attributes demand to good old-fashioned marketing and raising awareness that there’s a product to fit every niche.

“[Demand for] the anti-reflective glass would be more a matter of product awareness that such a product exists [and can be used] in lieu of standard clear glass. Many high-end homeowners, condo owners and retail stores have been sacrificing unobstructed views due to the fact they were not aware that a glass material exists that provides a sightline with virtually no disturbance,” he says.

Interest in energy savings is still motivating buyers, these fabricators believe.

“There’s no question that the Energy Star rating, and the low-E coatings that give the window manufacturers that Energy Star rating, have definitely come into play,” Santelli says. “More and more people are looking for soft-coated products that will give the window manufacturers that energy efficiency.”

“The trend toward more low-E coatings in insulating glass continues for us, and definitely more ‘soft coat’ low-E ,” Dwyer agrees.

In addition to the money-saving potential offered by these energy-efficient products, these fabricators say they’re still seeing demand for glass in aesthetic applications.

“We’re seeing more interest in interior all-glass doors, walls and railings in office renovations,” Dwyer says.

“We are doing a lot more specific and custom architectural glass, different make-ups, custom laminated,” Latin says. “Everyone wants glass on their stairs now, trying to copy the Apple stores.” He adds that in addition to glass stairs and railings, “custom laminates with fabric, photographs in between the glass” remain in demand. However, he counters that comment by noting that demand has come at a price—a lower price. “Right now to get jobs, you basically have to take less money,” Latin says.

“Any decent sized jobs attract a lot of competition … so profitability is challenging,” Dwyer adds.

USG
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