The building and construction industry won't have any bright spots in 2009 — just lesser degrees of pain.
So says Ken Simonson, chief economist for the Associated General Contractors of America in Arlington, Va., who foresees mostly pain and suffering for the nation's home builders, and by extension, building product makers.
Both residential and commercial construction will continue to dive through this year with a glimmer of hope for a residential turnaround late in the year, Simonson said by telephone.
``I have been hopeful that residential sales were close to bottoming out,'' he said. ``With the combination of historically low interest rates and perhaps some of the stimulus spending being aimed at home purchasing, we may well see an increase in home sales, and that could lead to a rise in new home construction late in the year.''
President-elect Barack Obama's promise to invest heavily in the nation's infrastructure could be the only saving grace for certain building product segments. Pipe industry consultant George Coleman is bullish on plastic pipe for potable water transfer applications in 2009.
``We're sitting on the verge of a market for the pipe industry that's going to be the best we've seen in many, many years,'' said Coleman, head of Coleman Marketing Co. in Texarkana, Texas.
``When you go back and really look behind the curtain at the infrastructure in this country, we have cities delivering water that shouldn't be drunk,'' he said in a Jan. 5 telephone interview.
The only mystery in the housing market is how big the fall will be.
``It's going to be a down year. Is it double-digit? We don't know yet,'' said Steve Van Kouteren, a principal with consulting firm Principia Partners in Exton, Pa.
Van Kouteran's primary areas of expertise — fence, decking and railing — are basically in the same boat. There is a large component of railing in commercial applications that fared reasonably well in 2008, but is unlikely to do so in 2009. Consumer spending is down, and decks often are made as luxury purchases. Fence has the chance to do slightly better than decking, Van Kouteren said, due to the conventional wisdom that most homeowners will install a fence before a deck, and that many residential neighborhoods are divided by fencing, particularly in the western United States.
Vinyl windows are as closely tied to new construction as any building products category — which, in this case, is bad.
Products like roofing and insulation could potentially benefit from the extra infrastructure spending in 2009, but it has yet to be determined how those dollars will be spent, Simonson said.
And one potential boon to the remaining vinyl siding extruders — a 6 percent void in the market — went away at the beginning of January when door maker ProVia bought the shuttered Heartland Building Products and vowed to get the plant up and running immediately.
In addition to the growing popularity of competing materials in exterior cladding — fiber cement, manufactured stone and brick veneer — the siding market is also expected to take a hit.
Cellular PVC cladding products will emerge in 2009, but ``continue to be in commercialization and launch mode as the year unfolds, due to spotty or selective distribution in most cases,'' said Principia's John Pruett.
Pruett is bullish on polymer-based shutters in 2009-10, a small but rapidly growing segment. The products will fare particularly well in coastal areas where hurricanes are a threat, he said.