SUMMARY OF MAJOR FINDINGS
The $12 billion (manufacturers dollars) U.S. window industry is currently experiencing a decline in demand as rising interest rates, soaring energy costs, and the leveling off of home prices resulted in a pull back in residential property investments. The builder market has been hurt the most by these trends. As a result, manufacturers have increased their emphasis on replacement markets and expanded their efforts to supply the strong growing nonresidential sector. Window manufacturers have also increased their focus on adding energy-efficient and impact-resistant window lines. In addition, manufacturers are looking to foreign markets for growing sales opportunities. Despite these efforts, plant profitability is coming under pressure from declining demand and rising material costs. Based on current housing permit and start rates, window product sales may not recover until late 2008 or into 2009.
WINDOW INDUSTRY TRENDS
Catalina Research uncovered these trends in our in-depth 194-page report on the U.S. window industry. U.S. shipments, exports, imports, and price trends are evaluated for wood, vinyl, and metal windows. Wood window shipments are further segmented by type- casement, double-hung, horizontal sliding, and others. Metal window shipments are provided for aluminum, steel, and other metals. Aluminum and steel window shipments are shown for residential and nonresidential uses. Aluminum window data is broken out for single and double-hung, awning, and other types. Wood, vinyl, and metal window shipments are provided in units and dollars.
INTERNATIONAL TRADE ACTIVITY
Import data is included to evaluate the growing importance of foreign-sourced windows. Import data is provided for wood, vinyl, aluminum, and steel windows. Export shipments are provided for wood and vinyl windows in order to uncover growing foreign sales opportunities.
END-USE MARKETS
Sales data is segmented for residential and nonresidential markets. Residential and nonresidential window sales are segmented by window material, including fiberglass windows. Residential market data is also available for new construction and remodeling and replacement markets. Window purchases by U.S. prefabricated wood building and mobile home manufacturers are provided as well. Data trends on retail window sales, residential replacement window spending, and window remodeler demographics provide the reader with the information needed to exploit residential remodeling and replacement markets. Catalina Research added a section on regional and state residential window sales, including builder and replacement sales by material.
FACTORS AFFECTING DEMAND
End-use market trends are correlated with U.S. housing demand, nonresidential construction spending, mortgage interest rates, and other economic and housing indicators affecting demand. This provides insights into the direction of domestic demand in 2008 and beyond. Demographics of the replacement window purchaser are also evaluated.
PROFIT MARGINS AND THE COMPETITVE ENVIRONMENT
In addition, Catalina Research investigated the cost structure and profitability of U.S. wood and metal window product plants. Data trends were compiled for material, labor, and capital inputs. As part of this analysis, Catalina profiles 27-leading U.S. manufacturers and compiled sales data for the leading producers in order to calculate market share of the top 15 companies. Company profiles cover product lines, manufacturing and distribution, capital investments, acquisitions, and new products. Executive are urged to compare their company’s own performance to the industry averages.
CANADIAN WINDOW INDUSTRY
The Canadian window industry is also investigated. Shipments, exports, and imports are provided for wood, plastic, and metal windows. Wood and metal window shipments are further segmented by product line. Demand is correlated with Canadian construction trends to estimate shipment trends. In addition, the leading Canadian-based manufacturers are profiled and market shares are calculated for the top 8 suppliers.
Additional Information
SCOPE AND METHODOLOGY
The Catalina Report on Windows is a guide to the growth- and profit-oriented opportunities in the manufacture and sale of vinyl, wood, and metal window products. This comprehensive database covers U.S. shipments, imports and exports, end-use and regional markets, factors affecting domestic demand, the cost structure of wood and metal window product plants, the competitive environment, and the Canadian market situation. In addition, major U.S. and Canadian manufacturers are profiled to review competitor strengths and strategies.
The total window industry is analyzed on a dollar and unit basis in Section 1. Shipments are provided for wood, vinyl, and metal windows. Data are compiled from U.S. Department of Commerce surveys and private data sources. Industry trends are further segmented by material for residential and nonresidential markets. The Bureau of Labor Statistics’ Producer Price Index is used to compare price changes for the competing window materials markets.
Section 2 further segments window product shipments by material and provides data on U.S. imports. U.S. shipments are compiled from Department of Commerce surveys. Shipments are for all domestic manufacturers, whether plants are owned by U.S.- or foreign-based companies and whether or not plants specialize (50% or more of total facility revenues) in window products. Wood window unit shipments are segmented into five product categories and shipments are also provided for frames and sash. Metal window product shipments are divided into aluminum and steel sash and frames, residential and non-residential products, storm sash, and window screens. Shipments are available on a dollar and quantity basis. Product line price trends are analyzed as well. Import data is derived from U.S. Customs records and rounds out the total U.S. supply. Catalina computed import penetration rates to judge the competitive position of foreign manufacturers.
Window purchases by end-use market are estimated by Catalina Research (Section 3). The Census of Manufacturers provides purchases of window products at prefabricated wood building and mobile home plants. Other government data trends provide statistics on building material dealer window sales and homeowner spending on replacement windows. The demographics of window, door, and siding remodelers are compiled from Bureau of Labor Statistics surveys.
Catalina investigated the factors driving demand by analyzing construction and other end-use market data (Section 5). Residential housing statistics include data on new housing competitions, existing home resales, and mobile home placements. Housing starts and residential building permits further track new residential construction markets. Total homeowner remodeling and repair spending is analyzed as well. Nonresidential market potential is analyzed by type of building. Exports’ share of wood and plastic window shipments is evaluated. Regional and state residential markets were estimated using building permit, existing housing unit, and personal income data (Section 4).
Catalina supplies data on the cost structure and profitability of U.S. plants specializing (50% or more of total plant revenues) in the manufacture and sale of wood, vinyl, and metal window products (Section 6). U.S. Department of Commerce survey data covering these plants is supplemented with individual company sales data in order to calculate company market share.
Company sales statistics are compiled as part of an exhaustive effort to provide competitor intelligence (Section 8). Annual reports, databases, and trade journals were searched for growth- and profit-oriented strategies.
The Canadian market situation is evaluated from Statistics Canada data (Section 7). Data trends include plant shipments, exports, and imports. The leading Canadian manufacturers were profiled, and together with the top U.S. supplying companies, market shares were calculated.
Action-oriented executives are urged to use this comprehensive statistical database and competitor information to penetrate end-use markets, target key demographic markets, expand foreign market sales, and initiate profitable operating strategies. Executives are urged to compute their own company’s market share and compare their company’s operating ratios to the industry averages as part of this process.
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