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Remodeling Market Index down in Q3

BY HBSDEALER Staff

The residential remodeling market continued to decline during the third quarter, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The market conditions indicator stands at 33.5, down from 41.8 in the last quarter. Future expectations of remodeling work also declined to 27.7, from 38.0 in the second quarter. Both are at historic lows since the start of the RMI in 2001.

The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. A number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been below 50 since the last quarter of 2005.

The remodeling market is tightening because more home builders are taking on remodeling work, which creates a more competitive marketplace.

“Remodelers reported another drop in major home improvements, and expectations for future work have also declined,” said NAHB Remodelers chairman Lonny Rutherford, a remodeler from Farmington, N.M. “A slight increase in minor remodeling projects for owner-occupied homes suggests customers are cutting back on home improvement spending.”

“The remodeling market declines follow the pattern of the home building slow down to a lesser degree,” added NAHB chief economist David Seiders.

In the South, the RMI dropped to 31.5, from 40.1 in the second quarter; the Midwest to 36.2, from 52.9; and the West to 36.1, from 42.4. The Northeast increased slightly to 32.9, from 32.8; and the Midwest increased to 52.9, from 44.1.

The special questions section asked remodelers about energy-efficient products, which found more customer calls to improve home energy efficiency since the question was asked in the third quarter of 2006 (up to 26 percent from 24 percent). Low-energy windows are the top customer request, 50 percent of remodelers installed water-saving faucets and fixtures (up from 36 percent), and 38 percent installed on-demand water heaters (up from 29 percent).

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STAFDA meets in Denver

BY HBSDEALER Staff

Denver — STAFDA president Rick Peterson hammered away at the Employee Free Choice Act (EFCA) and offered free advice to STAFDA distributors during the organization’s 32nd Annual Convention & Trade Show and during the most volatile year in recent memory.

In comments that received spontaneous applause during Peterson’s address to members, he called the EFCA “terrible” and “Orwellian” and a “serious threat to small businesses.” Among its provisions is the elimination of the secret ballot in certain union elections.

“If passed, what this terrible legislation would do would eliminate the time honored requirement for secret ballots of union elections and enable union proponents to coerce and intimidate workers who disagree with the union objectives,” he said.

On March 1, 2007, the House of Representatives passed the act by a vote of 241 to 185. It subsequently stalled in the Senate.

Peterson, the president of Seattle-based All-West Fasteners, shared four points of advice to STAFDA houses. Adopt improved supply chain partnerships, such as Vendor Managed Inventory (VMI). The goals of VMI are to make sure the customers’ production line never shuts down due to a product shortage and to minimize the total cost of supply. He cautioned distributors not to get burned on special inventory. A tool they should use is non-cancelable, non-returnable agreements (NCNRs).

Athird suggestion was to ensure that company’s terms and conditions protect them from product liability. “Remember, we’re the distributor, not the insurer against all things bad in the universe,” he said.

Finally, Peterson called on STAFDA houses to protect themselves from giving customers detailed industry descriptions that they can use to shop pricing and sourcing with their competitors.

During his general session address Monday morning, Peterson described his company’s increasing diversification since its founding in 1978. It started out as “two guys in a nearly empty warehouse” and reinvented itself as a supplier of aircraft fasteners and military specification hardware, supporting Boeing and the U.S. Navy. More recently, All-West added electronic hardware to its offerings.

Other STAFDA members are currently shifting sales to commercial, industrial and other market sectors, and that’s what the trade show is for — new products to help in this transition.

Incoming STAFDA president Hal Look, of Livermore, Calif.-base ORCO Construction Supply, summed up 2008 with two concepts: the presidential election and turbulent economic times.

“This year has not been normal to say the least,” said Georgia Foley, STAFDA executive director. Still the 32nd event will stand as the fourth largest meeting in the organization’s history at about 4,500 attendees. Some 880 booths were on the show floor, down from 969 booths last year, a record high. Of those 880 exhibitors in Denver, 19 percent were not present last year.

STAFDA membership has dipped slightly in 2008 to 2,845, including 1,215 distributors.

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United Cooperative sells hardware store

BY HBSDEALER Staff

United Cooperative, a full-service cooperative offering feed, grain, agronomy and energy products to south-central Wisconsin farmers and consumers, has sold its hardware store to a local businessman and his wife, according to an article in the Daily Citizen newspaper of Beaver Dam, Wis.

Steve and Linda Behn, who purchased Reedsburg United Cooperative Hardware Hank in Reedsburg, Wis., said they were interested in owning and operating a hardware store.

Karl Beth, United Cooperative vp and chief operating officer, said his company was not actively trying to sell the hardware store, but when approached by a realtor representing the Behns, they began to consider it. Steve Behn owned a construction business for 25 years and felt this was a good opportunity to continue serving the Reedsburg community, he said.

In addition to offering core hardware categories, the Reedsburg hardware store will continue to fill propane tanks and sell United Cooperative’s line of feed and lube oil.

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