The U.S. economy has everyone talking about strategies for how to conduct business, and exhibitors at the 2010 Fencetech show in Orlando were no exception, especially as housing starts have been particularly disappointing.
The questions then become focused on how the remodeling market will perform and will manufacturers be able to tap into the commercial construction sector.
According to the Washington-based National Association of Home Builders, market conditions for residential remodeling took a dive in the fourth quarter of 2009. The NAHB's Remodeling Market Index showed a drop to 36.4 from 39.8 in 2009's third quarter.
“Like new home construction, remodelers are feeling the effects of consumers' uncertain job future, their level of confidence and unwillingness to spend their equity or savings,” NAHB chief economist David Crowe said in a news release.
Housing starts dropped from 1.8 million in 2006 to an estimated 647,000 in 2010, NAHB said.
Still, some Fencetech exhibitors remain optimistic. Those particularly keen on the U.S. economy included Zhejiang Lilies Plastic Industry Co. Ltd., whose officials decided the lucrative construction market justified the journey from China.
“[We] think that the U.S. economy is getting better and we're looking to get into it,” said Helen Liu, sales manager. The Taizhou-based company is looking at exporting window and door profiles to the United States. It currently sells those profiles into Europe but officials are awaiting certification from the American Architectural Manufacturers Association to tap into the U.S. market.
Across the aisle, Chinese firm Zhejiang Huazhijie Fence Co. Ltd. of Huzhou saw U.S. sales growth of 20 percent in 2009, officials said. At the booth for Zhejiang Huangyan Dayu Building Plastic Profile Factory of Taizhou, officials said they are adding more profile extrusion lines in China to serve the U.S. market.
Working to meet strict ASTM standards, sales manager Cookie Xiong said the firm also builds its own tools.
Elsewhere, officials were concerned about competing materials including wood, especially as vinyl has been under attack for environmental issues.
“There is so much misinformation in the industry about vinyl that is absolutely, blatantly false,” said John Purvis, national sales manager at Ply Gem Siding Group of Cary, N.C. “The Vinyl Fence Deck and Railing Manufacturers' Association has been working hard with the Vinyl Institute and the Vinyl Information Network, to help strengthen our industry's reputation in the world.”
David Yu, president of Megamaple Trading Co. Ltd. of Shanghai, said that vinyl has gained structurally against wood.
However, last year, things slowed down. “I know nobody likes to hear it, but it's a fact,” he said Feb. 18 at the show.
PVC price increases also cannot be viewed as a long-term trend and the overall economic cycle will have its upside.
“Some people get spoiled [when things are good],” Yu said. “When we're at the peak, don't get too excited. It's a cycle. The slowdown could drive people harder to innovate.”
Steve Dillon, marketing director with vinyl extruder Veka Inc. in Fombell, Pa., said the remodel and replacement market is up for Veka. He's also relying on NAHB's numbers for housing starts in 2010, which, if predictions hold, could be 750 million to 800 million in the United States.
“The growth in the West will be in the latter half of the year,” Dillon said. Growth in the East will be relatively scattered.
“I am extremely optimistic,” he said of economic recovery. “I don't think it's going to be a huge climb, but it will be a climb.”
Veka is heavy on planning at this stage, especially in the commercial window market.
“Planning for Veka will set up big things over the next one to three years,” he said. “You have to deal with what you have today and look to the future.”
Veka jumped into the commercial sector two years ago.
“We worked really hard to get testing criteria met,” he said. “We're starting to get a name in those sectors and it's benefiting our fabricator base.”
Patti Pellock, marketing manager for fence, railing and deck products with CertainTeed Corp. of Valley Forge, Pa., said the economy has affected demand. The firm has relied on cost reductions and redesigns in an effort to mitigate the impact.
“Wood has stayed strong,” she said. “We still have the struggles of competing with wood.”
In response, CertainTeed has used its proprietary extrusion process to give its privacy fence textures, including grain appearance marketed as CertaGrain.
“We're making it look and feel like wood and giving it low maintenance,” she said.
Richard Raymond, president of Innoplast Inc. in Chagrin Falls, Ohio, said, “There is always going to be a place for small to medium-sized manufacturers.”
His firm's BollardGard product is blow molded and used over steel profiles to protect structures from vehicle damage. By far, he said, it's the biggest part of his company's sales. “Wherever they're trying to protect structures, they put bollards,” he said.
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