Collins The Trend Tracker
by Mike Collins
December 8th, 2014

Seek Opportunities in the Multi-family and Light Commercial Segments

Before the recent recession, many door and window manufacturers avoided the multi-family housing segment.  Their reason was almost always the same – the customers don’t pay fast enough.

During the downturn, however, the multi-family market often represented the only available port in a storm.  Many manufacturers found themselves chasing every possible multi-family project, and that strategy proved to have value as a hedge against the single-family market.

Now, as we approach the middle of the current recovery, the multi-family segment has paused to catch its breath.

A recent survey of a half dozen or so highly respected analysts shows that growth in the multi-family segment is expected to drop in 2015 to a rate of 3.4 percent. On the heels of a 2014 growth rate estimated at 13.9 percent, that’s lackluster, to say the least.

So, what should a door and window manufacturer do for this formerly lauded market segment? Needless to say, don’t abandon a segment just because growth has slowed.  Even in a flat market, it’s possible to win new customers in a variety of ways, not least of which is a low lead time.  Any manufacturer serving the multi-family market may be facing competitors whose success in other market segments is pushing their lead times to an unacceptably high level.  Beating these lead times, providing better follow-up service or fewer issues in the field are still viable ways to win new business.

The knowledge that the multi-family segment is projected to slow, however, does indicate that action should be taken.  One avenue of potential growth is the light commercial market.  Many companies use doors and windows for the multi-family market that, with little or no modification, could be sold into the light commercial market.  Of course, it’s important to confirm building codes and factor in any limits on the highest floor of a building on which a given product can be used.

With some creativity, though, manufacturers have a chance to capture some of the 10.8 percent growth that’s projected in 2015 for the commercial segment.

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