Many Have Mixed Feelings About Predictions for Multi-Family Market in 2011
March 10, 2011
The multi-family housing market has begun to show signs of improvement, and the increases in construction could mean good news for companies supplying and installing glass and windows. While projects such as apartment complexes certainly need windows, the feelings of those in the glazing industry are mixed. Some agree and expect to see growth this year, while others say 2011 will likely continue to be a struggle.
Ken Smith, president of ASI Limited in Whitestown, Ind., is one from the contract glazing side who thinks this year will offer growth opportunities.
“I agree that 2011 will see more commercial residential construction. Just recently we have seen a surge of significant multi-family housing projects gain traction nationally,” says Smith. “The challenge for these project types is the price point and schedule. Due to the cost of funds, many developers are constricting the schedules and pushing the boundaries on exterior facade costs. To be successful in this market, we must develop systems that can be installed effectively and be easily altered for any aesthetic changes that the design team may require for creativity. Companies that can quickly adapt this methodology will flourish in this market.”
Not everyone, though, is as optimistic. Brad Austin, president of Minneapolis-based Harmon Inc., expects 2011 to still be slow for many market segments.
“Harmon was recently awarded a two-tower, multi-family housing project in the Washington D.C., area that had been on hold for several years. Other than that, most of our work continues to be government projects, which currently account for more than 60 percent of our backlog,” says Austin. ”Although I read about signs of certain market segments picking up it has not yet translated into increased bidding activity or margin improvement. The construction market continues to be a very competitive business with the government, educational and healthcare market segments currently showing the most activity.”
Mary Olivier, marketing manager at Tubelite Inc., in Walker, Mich., shares a similar sentiment.
“Experts project that the overall nonresidential construction market will decline at least another 2 percent during 2011, with the largest impact of the decline occurring early, and then experiencing an upswing in the later months,” Olivier says. “Commercial is expected to drop approximately 4 percent during the year, with the hotel segment pulling it down by a drop of almost 15 percent from 2010. Vacancy rates are lessening and investors are beginning to resurface to set the stage for a jump of 13 percent or greater in 2012.”