International Door & Operator Industry

NOV-DEC 2013

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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MANAGEMENT by John Zoller & David Bowen, Zoller Consulting, Inc. GARAGE DOOR ACTIVITY INDEX The GDAI Waffes a Bit Total construction spending continues to grow, having reached a seasonally adjusted annual rate of $900.8 billion in mid-2013, the strongest performance since June 2009. This was, of course, prior to the political impasse in Washington, which, at the time this was being written, had "shutdown" selected components of the federal government. If that shutdown extends for 90 days or more, it will injure construction industry momentum, with a predictable negative impact on garage door demand. That threat comes at a time when the Garage Door Activity Index (GDAI) stands at 125.1, off from the preliminary 126.7 noted in the last issue. The preliminary number refected more robust housing and commercial building activity earlier in the year, spurred largely by lower mortgage interest rates that have since moved upward. Thus, the garage door industry does not need additional uncertainty at a time when construction activity was fnally escaping from its recession-induced malaise. Since early in the year, institutional and public construction has lagged behind private sector activity. State and local governments are feeling the pinch this year from federal budget cuts, which affect the level of transfers to local administrations. Public construction is down 3.7% from a year ago while total construction is 5.2% higher led by residential activity increases averaging 17.2% in mid August. So Why has the Index Waffed? "Waffing" comes from uncertainty. Be it the now lengthy sequester, the "shutdown" noted above or lingering unemployment, consumers and businesses fnd many reasons to spend very cautiously. Yes, homeowners are making more repairs and buying more replacement doors than they did a year ago, but only by three to four percent. New buildings are being built, but not at a dramatically increasing rate. More garage doors are being sold, but not in suffcient quantity to cause manufacturers to search for new capacity. In short, things are better, but the rate of improvement is not accelerating. In short, the rate of economic improvement is not suffciently strong to keep the GDAI moving upward. This is probably a good time to do a very brief review of the GDAI tool. GDAI is an attempt to provide a quick answer to the question "… how is the garage door industry doing?" All index numbers begin in a base year as a value of 100.0. The number itself has no meaning and represents no units; it is the changes in the number that are important, and such changes are expressed in percentage terms relative Continued on page 30 The IDA Garage Door Activity Index 175.0 Consumer confidence is prompting more home improvement and more new residential construction ... but some institutional and commercial sectors are stagnent with public funding in short supply Annual Residential VPIP peaks at $619.8 billion 150.0 Index Value 132.5 137.8 125.0 Base Year = 2003 100.0 100.0 94.1 75.0 50.0 58.9 125.1 121.5 128.8 108.8 112.5 111.8 104.5 104.6 NonResidential Construction VPIP peaks at $709.8 billion 119.4 122.7 107.3 2013 growth is finally accelerating as employment strengthens 2010 & 2011 revised as GDP reflects less rapid recovery than originally believed 25.0 Designed, calculated and maintained for IDA by Zoller Consulting, Inc. Copyrighted material. May not be reproduced in whole or part without express written permission of the International Door Association V O L U M E 4 6 I S S U E 6 2 0 1 3 29

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