International Door & Operator Industry

NOV-DEC 2018

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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Page 25 of 110

MANAGEMENT Continued from page 20 door and operator volume. Additionally, recognize that the value of installed residential garage doors has accelerated by just over 60.0 percent since 2010. As a consequence, the dollar volume of doors for new homes is almost equal to what it was at the height of the housing bubble even though the unit quantity remains significantly less. Many factors have combined to generate that increase in residential door value, including greater use of high- value designs (e.g., full-view doors), a greater proportion of insulated doors, more door units per house structure and price increases per se. The value of non-residential garage doors has likewise grown across the last decade. Changing logistical requirements and heightened security concerns have contributed to more exacting door specifications, but technological enhancements are also prominent factors. The market for high-speed doors has grown more rapidly than any other commercial door segment, even though the value per unit is often six or more times that of conventional sectional and rolling types. Increasingly, non-residential doors are specified as part of an integrated vehicle access package that includes dock equipment, security systems and materials handling devices. The greater relevance placed on doors in such a package has also added to value. Like residential construction, the commercial-industrial- institutional sector is confronted by rising materials costs and serious skilled labor shortages which has inhibited some projects from going forward. As Chart 2 suggests, commercial construction has continued at a high level, but the rate of increase has slowed, and the quantity of new project starts has declined as noted above. The most recent American Institute of Architects (AIA) Consensus Construction Forecast Panel projects that 2018 will conclude having grown by 4.7 percent, and that 2019 will see with a slight reduction to 4.0 percent. If those predictions materialize, then the industry will have experienced nine consecutive years of growth and total value put-in place will finally have exceeded the previous peak year of 2008. At this point, we do not agree with the AIA optimism as Chart 2 indicates. As noted at the outset of this commentary, we are not suggesting a recession is imminent, but we do have reservations about the rate of growth, given the various issues noted in this discussion. Total non-residential building construction will probably reach the 2008 peak of $438.6 billion, but growth in 2018 and 2019 will hover near the 2 percent annual level. "Recession Resistance" from Retrofit and Replacement Among the observations derived from the 2009 recession is the fact that home owners will protect their property values with replacements and upgrades, even when V O L U M E 5 1 I S S U E 6 D E C E M B E R 2 0 1 8 23 Continued on page 24

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