International Door & Operator Industry

NOV-DEC 2015

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 21 of 128

MANAGEMENT by John Zoller & David Bowen, Zoller Consulting, Inc. GARAGE DOOR ACTIVITY INDEX Construction activity continues its very encouraging expansion. As this analysis was going to press, the latest available data was for August 2015 showing nonresidential spending to be $696.3 billion on a seasonally adjusted, annualized basis, a 0.3% increase from the previous month and a 12.3% increase from the same time last year. Residential construction has also continued to grow, albeit at a pace slower that commercial and industrial building. Construction expansion is being fueled by job growth, which generates both consumer spending and the absorption of available space. Declining energy prices have caused some regional economies to slow, yet investment and spending has been bolstered in others. For example, through mid-2015 manufacturing- related construction spending was expanding 1.3% on a monthly basis and 57.6% for the trailing 12 months. Chart 1 indicates the relationship of residential, non-residential and total construction for period August 2014 to August 2015, with current projections through April 2016. Each data point refers to construction activity in seasonally adjusted annual rate terms. R A O R A T Y D E X Construction Activity Continues to Expand Continued on page 20 During the frst half of 2015, U.S. employers added over 1.3 million net new payroll positions, which reduced the national unemployment rate to 5.3 percent in June. The construction sector alone had added about 140,000 jobs by mid 2015, which has reduced the unemployment rate for construction so sharply that labor availability has become one of the most pressing concerns for the industry. V O L U M E 4 8 I S S U E 6 D E C E M B E R 2 0 1 5 19 The housing sector remains less active than non-residential construction. Housing starts for the second quarter of 2015 averaged just fewer than 1.15 million units at a seasonally adjusted and annualized rate. As has been the case since the recession, residential retroft and garage door replacement expanded more rapidly than new construction. Chart 2 delineates residential garage door demand relative to total residential construction. Both construction activity and garage door demand are displayed as sales to end-users (e.g., at resale or installed value). It should be remembered that installed value implicitly includes operators installed with the door, but not operators sold separately. The demand for garage doors generally follows the pattern of aggregate residential construction demand, but local and regional variations cause demand patterns to fuctuate. The statistic noted on Chart 2, that garage doors account for 1.043% of total residential construction spending, indicates the small size of the garage door industry relative to aggregate activity.

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