International Door & Operator Industry

JAN-FEB 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 48 of 142

MANAGEMENT 46 International Door & Operator Industry™ (continued from page 44) Counties in California are willing and able to rebuild rapidly, then new construction will accelerate beyond our forecast in those locals. However, the problem of readily available construction labor (a problem to be addressed in a future article) and the fact that infrastructure must first be rebuilt to accommodate residential re-construction will forestall immediate home replacements. We now forecast calendar 2018 one-unit completions of 827,000 (about 6.0% above 2017) with multi-units reaching 411,000 (about 5.0% less than 2017). Given the many uncertainties of disaster recovery, but the very slow rate of population growth, we will hold with this forecast of 1.238 million units, but recognize that a continuing adjustment will probably be required. More Garage Doors in New Homes Although a comprehensive examination of the phenomenon has yet to be completed, it is apparent from both aggregate USCB data and reports from selected dealers that the number of installed garage door units per new house unit built continues to increase. This means that 1) The number of new housing units without garages is declining, and 2) Houses with three or more garage door units are more commonplace. The ratio of garage doors per dwelling constructed varies significantly on both a regional and economic basis. For example, In Midwestern and Pacific Coast communities with higher than average personal incomes per household, the average number of doors per new single-unit house exceeds two, regardless of door configuration (e.g., two one-car doors, one two-car door, etc.). In other regions, the rate of garage door use continues to accelerate, so that if housing completions stall or even decline, garage door usage may continue to grow. Likewise, the rate of garage door operator installation in new dwellings is growing. The Ever-Present Opportunity to Upgrade Residential Garage Doors A statistic that can never be repeated too often is that less than 2.6% of all in-place residential garage doors are upgraded and replaced annually. This is a marketing problem! As of 2017, there are more than 107.5 million garage doors installed in the U.S. total of 135.6 million housing units – over 101.8 million in the 92.2 million single- unit dwellings, even allowing for the 24.0% of houses with no garage facilities. If we assume that a combination of style, functionality and home owner preference give a garage door about an 18 to 22-year life-span, then in any given year, 11.0 to 12.0 million garage doors are potentially replaceable. However, at present, fewer than 2.75 million residential garage doors are sold as upgrades, replacements and additions. The marketing of garage doors and operators must be energized and enriched, and it must occur at the dealer level where home-owner decisions are made. With few exceptions, no home improvement with a cost typically under $3,000 makes as big a difference in the appearance and functioning of a dwelling as do new garage doors and operators. Early 2018 Non-Residential Construction Forecast The American Institute of Architects (AIA) produces a twice- yearly forecast of non-residential construction activity. The forecast combines the estimates of seven construction industry organizations into a "consensus forecast", which historically has been dependable for purposes of planning. For 2018, the consensus projections indicate continuing, but slowing growth in construction activity, with the net forecasts ranging from +1.7% to +5.5% compared to 2017. Those numbers were accumulated before the late 2017 acceleration of GDP, and neither tax reform nor financial deregulation had occurred, either of which could have a salutary effect on construction activity. Another promised, yet unrealized economic boost would be a trillion-dollar infrastructure program that would buttress construction activity for the foreseeable future. Again, a case where economic reality separates from political pandering. Disaster recovery will also intensify spending in some places. According to the Commerce Department, Texas and Florida accounted for 22 percent of U.S. private nonresidential construction spending in 2016. This suggests that hurricane recuperation will have a significant impact as replacement and (continued on page 48)

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