Fabricators, Manufacturers Weigh In on the Year Ahead
January 7, 2011

The first full work week of 2011 is coming to an end and many in the glass and glazing industry are cautiously optimistic about what the future holds. As reported earlier in the week, contract glaziers are taking steps to help them stay busy, in spite of the slow construction market. While it will likely be later in the year before that market starts to come back, some on the manufacturing and production side say they, too, expect 2011 to bring improved conditions; others say it will still be some time before the construction market fully recovers.

Garret Henson, director of sales for Viracon, says they expect the first three quarters of 2011 will be similar to the third and fourth quarters of 2010. 

“The glimmer of optimism for Viracon is that our architectural involvement has increased and design activity is diversified over more building types in comparison to the past 16-24 months,” says Henson, adding that a positive note is that the backlog of projects they have quoted and those they have in booked commitments did not experience value engineering activities. 

“Our industry in general did not undervalue high-performance, complex glass products even though the market was depressed,” says Henson. “We believe this is occurring because of our industry’s continued education toward value-added products and legislation toward energy improvements.”

Henson adds, “As with most companies, we continue to think lean while upholding and increasing the attributes that help differentiate us.”

Earnest Thompson, director of marketing and brand management for Guardian Industries, says they have seen business conditions strengthening throughout 2010 and expect that to continue in the year ahead.
“We saw in early 2010 that the macro indicators weren't looking any better so we resolved to work even harder then ever to meet customer needs … to not talk about it, but do it, day in, day out,” says Thompson. “In tough times, customers want to work with someone they know is going to be around awhile and is interested in helping them grow and be in a strong position for the good times when they return. That said, we expect conditions to improve this year—but are committed to maximizing our manufacturing capabilities in any case.”

For example, Thompson says they have a pipeline of new products and customer solutions to go with what they already offer.

“And our existing offering is comprehensive enough to address challenges in any singular segment,” he adds.

Max Perilstein, chief marketing officer for Vitro America, says his company’s data shows a moderate start to 2011. 

“A majority of our intelligence is telling us that value-added products are going to grow in demand and we are expecting and are ready for more stringent code enforcement to drive energy and impact products forward,” says Perilstein. “We continue to position ourselves to be able to meet and exceed the specifications, the codes and the service needs of the customer at every turn.”

But while many are moving into 2011 with high hopes for the year, others say there is still a ways to go before the construction market improves.

“While the projections are encouraging, we believe several factors will continue to weigh against a robust recovery for the construction and glazing industries in 2011,” says Gary Danowski, vice president Performance Glazings for PPG Industries. To start, he says that despite the positive forecasts in several construction segments, he believes the numbers are somewhat illusory. 

“One reason the 2011 numbers look positive is because they are being measured against the historically depressed numbers we recorded in 2010,” he says. “Even with the expected improvements, the fastest-growing construction segments will be off 50 percent or more compared to 2007 and 2008.”

Second, Danowski points out that the McGraw-Hill forecast, for example, is based strictly on construction starts, “which typically lead construction spending by at least a year. Because glass is one of the later expenditures in the construction cycle, it will take a while for expected growth to positively impact the glazing industry,” he says.
A third reason, Danowski points out, is the institutional market, a large consumer of glass, will remain flat or worse in 2011.

“Local and state governments are facing severe budget constraints that will limit their ability to construct schools and other municipal structures for the foreseeable future,” he says. “Fortunately, construction growth in health care and secondary education will partially offset those negatives and keep the institutional numbers stable in 2011.”

Danowski also says the construction industry, in general, is still facing three problems common to the economy as a whole: sluggish growth, high joblessness and lack of capital.

“Until those conditions improve, we do not expect to see major changes in the construction market.”

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