International Door & Operator Industry

SEP-OCT 2017

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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(continued from page ##) MANAGEMENT MANAGEMENT expensive and more complex replacement door units being sold. The increased value has developed from more insulated units (nearly 78.0% of residential replacement doors are insulated in one form or another), more elaborate designs ("carriage house", faux wood, etc.) and increased use of full- view doors. All things considered, the residential retrofit garage door market is getting an increasing share of the residential investment component of GPDI. Chart 3 displays the relationship between GPDI in non-residential structures and demand for sectional overhead-type commercial garage doors. Like residential retrofit, the pre-recession correlation is less compelling than the relationship afterward, but since early 2007, GPDI has been an excellent bellwether of demand. It is important to remember that the recessionary impact on commercial construction (and therefore commercial doors), began nearly 14 months later than the housing market crash. Much of that is due to the timing of non-residential activity which has a substantially longer construction cycle, thus many projects underway in 2007 were not completed until late 2008. As in Charts 1 and 2, garage door data is shown at installed value (dealer sales) to end-users, largely contractors, but including building owners and users, particularly for retrofit projects. Installed value includes the door, peripheral items (track, springs, etc.), ancillary items such as operators if installed simultaneously with the door, and dealer markup to cover installation, other costs and profit. The line depicting GPDI in non-residential structures in Chart 3 is a nearly perfect fit to garage door demand from 0.0 90.0 180.0 270.0 360.0 450.0 540.0 630.0 720.0 810.0 900.0 - 140.0 280.0 420.0 560.0 700.0 840.0 980.0 1,120.0 1,260.0 1,400.0 02 1 02 2 02 3 02 4 03 1 03 2 03 3 03 4 04 1 04 2 04 3 04 4 05 1 05 2 05 3 05 4 06 1 06 2 06 3 06 4 07 1 07 2 07 3 07 4 08 1 08 2 08 3 08 4 09 1 09 2 09 3 09 4 10 1 10 2 10 3 10 4 11 1 11 2 11 3 11 4 12 1 12 2 12 3 12 4 13 1 13 2 13 3 13 4 14 1 14 2 14 3 14 4 15 1 15 2 15 3 15 4 16 1 16 2 16 3 16 4 17 1 17 2 Gross Private Domestic Investment in NonResidential Structures - $=billions Installed (Dealer) Value of Commercial Sectional Garage Doors - $=millions Commercial Sectional Garage Doors - Installed Value GDPI NonResidential Structures - Chained '09 $ ANNUALIZED Installed Value at Seasonally Adjusted Annual Rates CHART 3 Correlation of Gross Private Domestic Investment in NonResidential Structures to Installed (Dealer) Value of Commercial Sectional Garage Doors - Quarterly Data 2002 to mid 2017 2007 onward, and its gradual, if erratic, upward movement sine mid 2010 has defined new, non-residential building. The 2014 peak and subsequent slight decline in door demand are reflected in the movement of the GPDI numbers. Like residential doors, average commercial installation value has grown since 2012, stimulated by installation, greater use of full-view applications and more use of ancillary items including operators and security devices. All in all, GPDI is a useful indicator of sectional garage door demand. Never the less, it is best used in conjunction with other variables for forecasting purposes. Such other variables include employment, personal income, construction payroll data and architectural billings. In future articles, we will expand this look at what helps to determine garage door demand and make some effort to generate a long-term forecast. John E. Zoller and David H. Bowen comprise Zoller Consulting, Inc. of Wooster, Ohio. Zoller Consulting provides consultation of managerial effectiveness and financial performance of construction related businesses. They also offer customized seminars and training sessions. In addition, Zoller Consulting provides acquisition management, including finding buyers or sellers, locating funding sources, transaction structuring, and negotiating and organizing the transition to new ownership. Contact Zoller Consulting, Inc. at 330.262.8500 or John@ zollerconsultinginc.com. 28 International Door & Operator Industryâ„¢ (continued from page 26)

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