Editor’s [re]Marks
by Drew Vass
November 19th, 2018

Same Pie, Different Slices

As cliché and indicative of old age as it might be, I can’t resist saying:

I just can’t believe that Thanksgiving is already here.

I had breakfast in a local diner this morning and must have heard that a dozen times—each with a Charlie Brown, melancholy tone about it (as you can probably imagine). But there’s nothing melancholy about the holidays—or third- and fourth-quarter business—which tend to run together like the egg yolks and cream chipped beef on my plate, if you ask me. And that feels especially true heading into 2019. Case in point: In a similar fashion to how turkey overlaps with Christmas, we’ve spent the past couple of weeks digging through third-quarter results, yet have spent the same time mulling through forecast after forecast.

Two things you can count on hearing about—practically nonstop between now and the start of the new year—include consumer confidence and housing. And both seem to reach their crescendo around Black Friday. That’s just how it goes for some industries—especially those that are in some way tied to real estate. But for door and window companies, there are some mammoth decisions to be made this time of year. Do you put a shiny, new, fully automated machine under your company’s Christmas tree, or do you stick to a used one? At the same time, if builders are planning to break ground on fewer houses next year, who’s to say that either will pay for itself in 2019? Personally, I’m glad that I’m making the choice between pecan pie or pumpkin these days! But I will say this: No matter which pie I choose to make, one thing’s for certain: It will get eaten. If it doesn’t suit the tastes of the kids at the table, chances are it will suit the “older folks” (including me). And based on my recent research, I’m willing to bet that it’s more or less the same for doors and windows.

As much as I’ve gathered about the expectation for lower housing starts in 2019, I’ve read equally as much about a strong remodeling market. And that’s where doors and windows have an edge over other products. Think about it: You could be producing and selling … I don’t know … let’s say sub-flooring. There may be additions going up that require those products, but do you think anyone’s sitting around on a cold and dreary day thinking, “Gosh, we’ve got to have this sub-floor replaced,” or “Gosh, this sub-flooring sure is dragging down our curb appeal!” And though fewer homes might be going up next year, history has taught us that when folks aren’t moving, they’re sprucing up. While I’m not willing to let the cat out of the bag (for an upcoming article), I will say that, according to my research, among the estimated 58 million window units sold in 2017, 38.5 million of them were sold to the remodeling market. Meanwhile, statistics show that eight million exterior doors were installed in residential properties in the same year. Compare that to the number of new homes built, and you’ll quickly realize that the lion’s share (five million) went to existing homes.

In other words, no matter what the housing market looks like in 2019, people will eat the [door and window] pie in one way or another—especially after they have all winter to think about it.

Short of making this a pep rally, let me just say: Compared to other building-related industries? I’m glad to be on doors and windows. We might have to put in some extra hours around the holidays, combing through third-quarter results and new year forecasts, but I’ll take that over the alternative of too much turkey. And Black Friday shopping. Eesh.

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