Plavecsky's Ponderings By Jim Plavecsky
by Jim Plavecsky
April 2nd, 2015

‘Solid Year of Growth’ Prediction Still Looking Good

I just returned from Elkhart, Ind., which is one of the major centers in the nation for RV production. The customers I visited there report that they are busier than ever before with first-quarter sales in RV doors and windows far surpassing their projections.

Having been calling on this neck of the woods for many years, I’ve always viewed the RV business as an indicator of consumer confidence. When people feel good about their economic future, they start ordering RVs. RV companies are attributing this to a number of factors such as lower gasoline prices and a recovery in the job market. They also say that the average age of the RV buyer has come down considerably, with many first-time buyers being in their 40’s. Indeed, consumers are being infected with wanderlust at an earlier place in their life, and RVs are very appealing to them.

The Consumer Confidence Index is an economic indicator that measures the degree of optimism consumers feel about the overall state of the economy and their personal financial state. This confidence level affects their economic decisions such as spending activity, so it serves as one of the key indicators of how the economy is likely to perform in the near future.

Sure enough, when I got home last night, I Googled the latest news about where the index was, and indeed it has gone up. The index now stands at 101.3 (1985=100), up from 98.8 in February.

As most window manufacturers have confirmed, first-quarter performance was a repeat of last year with harsh winter weather and holiday hangover leading to weak results. Also, the economy expanded at only half the pace in the first quarter of 2015 versus the last quarter of 2014. Because of these weak first-quarter results, it is much more likely that the Federal Reserve will hold off on any interest rate increases because they certainly won’t want to make matters worse.

Most of the door and window companies that I’m calling are optimistic about the future and feel that pent-up demand now exists that will give the second quarter an extra boost. Many are already growing sales way above last year as a result of taking business away from the competition or being awarded substantial project work. This just goes to show that, regardless of economic conditions, we’re ultimately in control of our own destiny.

Speaking of being in control of one’s own destiny, I’m finding that many door and window companies, as well as dealers, are being aggressive about investing in sales and marketing. They’re realizing that they can’t just ride the wave of economic conditions and go whichever way the economy goes. They must be more assertive about creating sales opportunities for themselves, which means marketing. I’m also seeing a greater investment in professional sales tools, literature, website development, and good old fashioned door and window samples.

Many dealers are investing in updating their showrooms and training their sales staff and adding new financing options. Many of them who failed to offer financing in the past are realizing the opportunities that they let slip away by not having creative financing in their arsenal of sales closing tools. Often, that makes all the difference.

So, despite disappointing first-quarter results, I’m optimistic that our industry will rebound in the upcoming months with opportunities for most manufacturers and dealers to enjoy a prosperous year.

Indeed, Easter is about new beginnings, so Happy Easter everyone!

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