News

Readers Respond

BY HBSDEALER Staff

Top 100 Distributors list

“Your decision to not include Boise Cascade’s Building Materials operations on your list of top wholesale operations is inconsistent and misleading to a wide variety of audiences. Your reasoning for our deletion was apparently based on the fact that Boise Cascade is both a wholesaler of a broad line of building materials and a manufacturer of wood products. Clearly we do not understand this reasoning after having been on the list for decades. In addition, this reasoning seems to be inconsistently applied, given that other distributors on the list fit a similar profile.


“While the exclusion will in no way hinder our goal of providing our customers with the broadest product line available and the best service possible, we clearly want our customers and vendor partners to understand that your exclusion in no way diminishes our capacity and commitment to them. We are, and will continue to be, a dynamic and growing part of our great industry.”


— Nick Stokes


Senior VP


Boise Building Materials Distribution


HCN responds:

After further review, Boise Building Materials, as well as competitors, including Weyerhaeuser’s distribution arm, have been returned to the digital version of the list, available at homechannelnews.com. 


In our effort to simplify our definition of two-step distributor, the original list published in our August issue removed certain companies that can be described as manufactures. However, several of these companies are too important to the distribution channel to ignore. HCN regrets the confusion.


Fix housing first? 

Readers responded to the administration and Congress’s efforts to fix the economy.

“Washington, D.C., has the cart before the horse. There has to be demand for products before businesses can hire people. Housing is the best category to jump-start more businesses throughout the United States. Housing drives our economy in so many ways. However, if housing affordability is not in line with consumer income, savings and trust in the future, there will be no job creation on a scale that will bring us back to prosperity, let alone out of recessionary thinking.


“It is increasingly apparent that the President and Congress (as well as the banking system) have little clue regarding the day-to-day running of a business. It also seems lacking in the knowledge of U.S. citizens’ needs. We are ‘voters’ to the politicians running our government, instead of ‘their employers.’ ”


— Jim Schweiger


“I don’t feel [the jobs plan] will do any real good because it focuses on a microcosm of the overall economy. This small group that will benefit coincidently has a major union presence (Operating Engineers Union). The housing construction industry does not have this presence. Also, the housing industry consists of many small ‘mom-and-pop’ companies. It’s not like the Roosevelt New Deal era when such infrastructure projects were largely manual labor, and thus created tens of thousands of jobs. With our current technologies, they will only employ a couple of thousand — not nearly enough to make a dent in the problem.”


— Kent Pearson


“Housing will lead us out of this mess, if we support it.”


— George Pattee


CEO, Parksite


“In general, I agree with the President very little; on his jobs plan I agree with him even less. However, from what I read, on the basis of demographics, housing isn’t coming back any time soon, if ever. To sit back and wait for or expect the government to take some kind of action that will somehow trigger another building boom is in some ways a definition of madness. The world economy — let alone the U.S. economy — is in a deep transitional phase, and, just like 1980, what comes out on the other side will look nothing like the economy of the past 30 years.”

— Chris Clements


Portland, Ore.


The Solyndra failure

“Not every business plan is well thought-out. Just because you have a new Solar Photovoltaic technology (as was the case with Solyndra), there is no assurance that the initial increased costs per watt to consumers will be accepted.


“Solyndra’s business plan was predicated on economies of scale bringing costs into line with existing technologies. In an industry changing as quickly as renewable energy is today, last year’s plan is obsolete before introduction. Perhaps smaller production facilities and a gradual start would have been the answer, rather than a huge production facility that made a great backdrop for a sound bite.”

— Bob Whelan

Washington Supply Co.

Washington Depot, Conn.

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Remodeling continues to soar

BY HBSDEALER Staff

Residential remodeling activity hit a new high in July 2011, rising 24% in year-over-year comparisons, according to an index compiled by BuildFax, a national database of building permit data. It was the 21st-straight month of increases and the highest level of remodeling activity since the index was introduced in 2004.


Most regions of the country reported gains in July. The West showed a 3% increase, while remodeling activity in the Midwest grew 5% in month-over-month gains. In the South, gains registered 3%, while the Northeast saw a 3.4% decline. On a positive note, the Northeast was up half a point (.7%) from July 2010, as was the West (26%), the South (7%) and the Midwest (5.6%). 


There has been an upswing in the sales of building materials and the number of renovations greater than $10,000, according to BuildFax, indicating that homeowners are staying put rather than moving to new homes in these uncertain times. 


“As millions of Americans believe that they will not be able to secure a new home due to a variety of factors, including tight credit, limited buyers and challenging job prospects, they are more and more turning to renovating and remodeling their current properties, sending remodeling activity to record levels,” said Joe Emison, VP research and development at BuildFax. “However, this remodeling boom is leaving many of these properties under-insured, as the value of these renovations are often not being captured by the homeowners’ insurance companies.”


Based in Austin, Texas, BuildFax derives its remodeling index on monthly building permit activity filed with local building departments across the country.


Joe Emison will be speaking at the ProDealer Industry Summit on Oct. 27 in San Antonio. His topic will be “The demise of the ROI remodel and the rise of the ‘comfort’ remodel.” For more information, visit prodealer.com. e

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Bleak long-term forecast for housing prices

BY HBSDEALER Staff

Housing prices will remain depressed for the next several years and may get even worse, according to a just-released survey of economists, analysts, investors and housing experts. The survey was conducted by MacroMarkets, a firm founded by Yale University professor Robert Shiller. 


The study found that although some local real estate markets are stable or strong, more broadly, fundamentals in the U.S. housing market remain very weak despite record-low interest rates. The MacroMarkets home price expectations survey said that home prices will grow at a mere 1.1%, on average, through 2015. “Expectations for home price performance in 2011 have become somewhat less negative,” Shiller said. “Unfortunately, the average projection is somewhat more negative for each of the following four years.”


The survey polled a diverse group of 111 of economists, real estate experts, investment and market strategists. Not all were in agreement about what should be done — if anything — to correct the market. Almost three-quarters (73%) of the respondents think that further policy action is “highly likely” or “likely,” while more than half (57%) said such action is undesirable, and almost half (49%) said additional government action is unnecessary.


“This data suggests that regardless of when and how housing recovers, controversy will persist regarding the role of government in the market,” said Terry Loebs, founder of Pulsenomics, the firm that conducts the survey for MacroMarkets. “More than half of panel members who indicated that more policy action is desirable or necessary suggested specific measures the government might focus on,” Loebs said. “We received a variety of constructive proposals. Several panelists clearly want or expect the government to be a catalyst for more effective mortgage refinancing and modification initiatives, as well as rental and other home equity conversion programs.” 

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