Window & Door - August 2010

State of the Industry at Mid-Year Although admittedly viewed through a rather hazy crystal ball, the national economy and the future of our industry can be projected with cautious optimism, so long as we are prepared to accept a “two steps forward, one step back”

➢ The remodeling and retrofit segment is poised for growth. The latest Leading Indicator of Remodeling Activity from the Joint Center for Housing Studies at Harvard found that Americans plan to increase spending on home improvements by nearly five percent this year, reflecting a tendency for cautious homeowners to “fix up rather than trade up.” This is reinforced by incentives, such as the increase in individual tax credits for energy-efficient improvements from 10 percent to 30 percent of cost for 2009 and 2010. The impending Home Star program will likely add additional momentum for retrofits.

respectively, in 2011. Unfortunately, there is no indication of a return to 2005 “bubble” levels until 2014 or later.

WILD CARDS

While all of the above lend credence to a position of optimism, there are a number of potentially significant situations that should temper our hope for recovery with a dose of realism. These include the national debt, projected to be $19.6 trillion by 2015–possibly exceeding the GDP, the so-far “jobless recovery” (the National Association for Business Economics expects no drop in unemployment below 9 percent for

Barring major negative events, the ➤

slump that has beset the fenestration
industry appears to have bottomed out.

WINDOW MARKETS RESPOND

The 2009-2010 AAMA/ WDMA U.S.

Industry Statistical Review and Forecast, highlighted in a feature on page 35, suggests demand for window and door products bottomed out in 2009, after falling almost 45 percent during a five-year decline. Windows for new construction fell 67 percent, while those intended for remodeling and replacement held their own somewhat better, declining by 24. 4 percent.

The study projects the demand
for residential windows will rebound
in 2010 as new construction activity
begins to take hold. A tepid recovery
is forecast in 2010 (a 10. 5 percent
increase overall, comprised of 33
percent for new construction, but a
virtually flat one percent for replace-
ment products) followed by gains of
21 percent, 45 percent and 8 percent,
another year, inching down only to
8. 4 percent by the end of 2011) and
volatile energy prices (subject to the
impacts of the Gulf oil spill, pend-
ing “cap and trade” legislation and
conflict in the Middle East).