Volume 48, Issue 9- September 2013

Down, But Not Completely Out
The Southeastern Glass Industry is Looking to Rebound, but the Recovery has Been Slow
By John Hollis

Evelyn Kim has had the kind of problems that business owners everywhere hope to endure someday.

Unlike most glass companies in the southeast, the owner of Green Glass of Georgia says her Atlanta-area business in Chamblee is thriving these days even in an economy still slow to recover from the crash. Many of her local competitors, however, weren’t as fortunate and were forced to go out of business.

Kim attributes her good fortune to divine providence. “We’ve been blessed, I guess,” she says. “We’ve got so many invitations [for work offers] that we can’t respond to them all. It’s a good problem to have. Somebody’s been watching over me.”

Kim’s enviable situation appears more the exception than the norm, according to an informal USGlass magazine survey of various glass companies throughout the southeast. Those in south Florida appear to have been the hardest hit by the recession thanks to the region’s heavy dependence on commercial construction.

Smaller, less-risky projects such as storefronts, curtainwalls and heavy glass showers appear to be most in demand now as new home construction remains low in a sluggish recovery. Unable to secure home loans as easily as they once did, people are now looking to upgrade their existing residences as opposed to buying. That demand has been instrumental in helping the glass industry get back up on its feet.

But there’s still a long ways to go yet, according to recently released employment figures.

Florida was among the 36 states to have added construction jobs over the past 12 months, according to the Associated General Contractors of America (AGCA). But despite the gains, those same numbers showed that construction employment in both Florida and Arizona remains 49 percent below their June 2006 record highs.

But there’s reason for optimism. Atlanta-area builders started 3,713 homes during the second quarter, according to report from Metrostudy, a national housing information and consulting firm, representing a 77 percent jump over the same period last year.

And Atlanta’s not alone, although recovery in the construction industry has come slower than to the rest of the economy. The strongest recoveries have been in states such as Louisiana that are rich in oil and gas activity, says Ken Simonson, the AGCA’s chief economist, while the Sunbelt states continue to struggle as a whole.

“It’s coming back,” says Michael Backer, the owner of Miami-based Action Glass Inc., “but it’s never going to be what it was. The banks got a serious reality check. I’d imagine most people down here would be happy if the new construction got back to just one-third of what it used to be. But I don’t really think it’s going to do that.”

Rough Times in South Florida
Backer’s skepticism is understandable, given the dire economic climate that befell South Florida following the crash of the real estate market a few years ago. At the height of the region’s boom in the early 2000s, it wasn’t uncommon to see new malls, condos, apartments and other commercial developments popping up by the day, Backer says.

The real estate bust that began in 2007 was devastating to the South Florida glass industry as virtually all new construction suddenly came to a screeching halt, leaving suppliers and fabricators alike stuck with an abundance of both idle equipment and employees. It was hard to go anywhere in Miami without seeing an empty condo or housing developments serving as testament to the good days many believed would never end.

“It was really rolling,” he says, “but then the bottom fell out. Miami really got hit hard in the glass industry.”

Since then, small businesses have been the ones most impacted by the rising costs of materials, energy and health care, glass company managers agree. Fearing customer backlash, they’ve often been reluctant to pass expenses on, instead often choosing to compensate by restraining salaries and asking their employees to be more efficient. The uncertain national political climate only further fueled the doubt about the economy’s recovery.

Action Glass was one of the few south Florida glass companies that wisely stayed true to relatively small jobs of doors, windows and shower doors even during the good times, meaning that it was easier for the company to withstand the tough times to follow. Unlike many of its local contemporaries, the company wasn’t forced to sell any equipment or lay off any workers during the recession.

But Backer, who has been in business since October 1978, is heartened by the “significant increase” he’s seen as of late in new construction in the Miami area.

“It’s back,” he says, “but things are never going to be like they were.”

Good Fortune in the ATL
Kim first bought Green Glass of Georgia in 2005, oblivious like most people to the economic mayhem just around the corner. The business had thrived under the previous owner, leaving Kim and her family to be little worried that they didn’t even know all that much about the glass business as a whole upon taking over.

Things were tough initially, but Kim and her family proved themselves quick learners and soon had things rolling. The metro Atlanta area wasn’t spared from the recession, although its effects were later in being felt there, Kim says. It wasn’t long before she started seeing a number of competitors shutter their doors as demand for glass dipped dramatically.

Recognizing the changing market landscape, Green Glass of Georgia made the decision to pass on the kind of large shopping mall projects it had done in the past. Lengthy jobs such as those involving malls were deemed too risky at the time because of the vast amount of company time and resources the work tied up. And then making sure they got paid for their work in a reasonable time period was another risk, given the dire economic times so many businesses were enduring at the time.

Instead, Kim made the decision to focus mostly on interior work with heavy glass jobs, citing the added stability still in that part of the business. The call proved fortuitous as Green Glass continues to thrive today.

But Kim isn’t so sure what tomorrow holds.

“I have no idea what the future is,” she says.

Making it Work in South Carolina
The good ole’ days were just that, says Barbara Streeter, the co-owner of Conway Glass in Conway, S.C. Demand in the glass industry in South Carolina was rising at about 12 percent per year, fueled in large part by the tremendous growth in condominiums, hotels and vacation homes in and around the scenic Myrtle Beach area.

But everything changed when the economy crashed, and Conway Glass was among the many to feel the pinch as company sales plummeted. The small, privately-owned company was forced to begin laying off workers in 2008, trimming down from 13 employees to its current four.

To reposition their company and remain viable in the new market, both Streeter and her husband co-owner Ed Streeter, also made the decision to stay small and remain content with more stained glass windows and shower door jobs.

Upscale shower doors in particular have been in high demand in the area, Barbara Streeter says.

“We noticed it about two years ago,” she says. “People weren’t building new homes. They were staying in their same homes, but they wanted to spice things up and make it feel like a vacation home.”

Barbara Streeter says there’s no mistaking the uptick in business as of late, so much so that she expects the company to begin hiring again sometime in the near future.

“I think it’s going to come back,” she says of the economy, “but I don’t think it’s going to come back quickly. There are definitely opportunities out there for people who are dedicated and love the glass industry.”

 

 


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