LUMBERYARDS

Around the horn at the Builders’ Show

BY Ken Clark

Orlando — Overhead, the 3M blimp promoted an “extreme” version of the company’s famous Post-it notes, the kind of sticky notes a builder might appreciate.

On the show floor, the American Standard booth displayed its Measure Fill faucet, which allows the homeowner the option of dialing in a desired amount of water.

And at the Azek/TimberTech booth, designers introduced new colors to boost deck sales, including a bold white — actually, it’s called “Whitewash Cedar”.

And on and on it went at the 1,500 or so booths here at the International Builders’ Show and another 700 exhibitors at the Kitchen and Bath Industry Show, co-located under the Design and Construction Week banner here at the Orange County Convention Center. (A “booth” fails to fairly describe many of the museum-quality displays throughout the South and West halls.) Everywhere, it seemed that progress was taking incremental steps to make building easier to achieve, and products easier to sell.

There were far too many building innovations, trends and concepts to organize neatly into bullet points, but, regardless, here are a few trends spotted:

  • Smart. It’s not only thermostats that are “learning” about their homeowners, smart products are all over the house. That trend includes what is called the “first smart home indoor air quality system,” at the Panasonic booth.
  • Speed. In a tight labor market, demand increases for products that save time or staff. Case in point: Quikrete’s “rapid setting” products, which promise to “save days, not hours.”
  • Style. A celebration of style seemed to be everywhere, not just the club-like atmosphere of the Kohler booth. At Masonite (pictured below), the 1970s style factored into door design, responding to customer demand for all things vintage.

Aisles were packed, and so was the parking lot, as estimates of attendance of industry professionals ranged from 70,000 (the NAHB’s figure) and 90,000 (the transportation company’s). It would be easy to interpret the activity as a positive economic indicator for the residential construction industry.

The NAHB’s economists piled on to the growth narrative. The NAHB predicts that remodeling spending for owner-occupied single-family homes will increase 4.9% in 2018 compared to 2017, and an additional 0.6% in 2019. 

Even better, single-family housing starts, the bread and butter of the lumberyard industry, are expected to rise 5% in 2018 to 893,000 units and increase an additional 5% to 940,000 in 2019. That’s still well below historical norms, but things are getting better.

Multifamily starts, meanwhile, are expected to dip about 2% in 2018, according to the NAHB forecast delivered at the show.

In addition to forecasts and products, the show centered on the people of the industry. Several were recognized for contributions large and small.

It was a memorable show for Laura Ellis, who was named Online Sales Counselor of the Year. She works for HHHunt Homes of Virginia and North Carolina. And receiving the Best Green Young Professional of the Year award was Ryan Miller, of North Carolina Building Performance Association.

[Other honorees at events surrounding the show include Behr Process Corp. and Owens Corning.]

Meanwhile, Randy Noel, a Louisiana-based custom home builder with more than 30 years of experience, was elected as the 2018 chairman of the NAHB.

“This year, we will work with policymakers to reduce burdensome regulations that are holding back a more robust housing recovery and urge Congress to make comprehensive housing finance reform a top priority,” Noel said. “We will also seek to build our membership and assure that NAHB remains the preeminent voice for housing on Capitol Hill.”

The Builders’ Show concludes Thursday. 

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A busy year for the NLBMDA

BY HBSDealer Staff

In 2017, the National Lumber and Building Material Dealers Association celebrated its 100th anniversary. In addition to the centennial milestone, it was an active year on the legislative and regulatory front.

To commemorate its 100th anniversary, the NLBMDA launched a new program to support its advocacy efforts and the Lumber Dealers Political Action Committee. When members made a contribution of $50 or more to LuDPAC, the NLBMDA sent a limited edition 100th anniversary commemorative pin, as well as a commemorative car decal.

The association launched the Workplace Safety & Risk Management Update newsletter in 2016 to feature regulatory issues affecting the LBM sector. In 2017, it launched a true-false format that can be used for compliance education and training, including material on forklifts, ladders, portable fire extinguishers and working in hot weather conditions. 

An OSHA Compliance Toolkit was also rolled out this past year. The NLBMDA said it will continue to build out content for the toolkit, which includes on working in hot weather, duty to report certain injuries and compliance material related to forklifts. The toolkit contains material on portable fire extinguishers, walking-working surfaces, general electrical, methods for temporary wiring, forklifts and injury and illness reporting. NLBMDA also updated the data on the top 10 violations of applicable OSHA standards cited for during OSHA inspections in the LBM sector. 

A Transportation and Fleet Safety Toolkit was initiated this past year as well. The toolkit focuses on the specific Federal Motor Carrier Safety Administration’s regulations that are used in the Compliance, Safety, Accountability points system to measure performance of each motor carrier. These include the basic elements of unsafe driving, driver fitness, hours of service and vehicle maintenance. The toolkit’s elements are developed for fleet safety personnel and drivers to improve performance in the CSA points system and increase safety. 

The NLBMDA launched a regulatory report for its state and regional associations called Regulatory & Compliance Notes, which summarizes the top issues for members to be aware of. 

It also worked with groups, including the National Association of Manufacturers, to repeal an OSHA rule that extended the statute of limitations from six months to five years as to when the agency can issue a citation for failing to record an injury or illness. NLBMDA also worked with NAM in opposing a proposed rule requiring active injury mitigation technology in table saws.

The 2017 NLBMDA ProDealer Industry Summit was another success with more than 40 first-time attendees and more than a dozen new exhibitors. Industry leaders from across the country came together to discuss and learn about the trends that will shape the lumber and building materials industry over the coming year at the ProDealer Industry Summit, held from Oct. 17 to 19, 2017, at the Wigwam Resort in Phoenix, Ariz. Attendees had the chance to hear from a wide variety of informative speakers and the opportunity to interact with and learn from their fellow members. 

This past March, the NLBMDA held its annual Spring Meeting & Legislative Conference in Washington, D.C. Members from across the nation came to lobby and educate members of Congress on key legislative priorities, such as regulatory reform, estate tax repeal, preservation of the mortgage interest deduction and resolving the softwood lumber dispute between the United States and Canada.

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Slight drop-off forecast for multifamily housing starts

BY HBSDealer Staff

Orlando — Multifamily housing starts are expected to slightly moderate this year and in 2019 while production levels are forecast to remain stable in a range considered normal, according to the National Association of Home Builders.

"For the foreseeable future, production of multifamily housing is expected to be running at a trend level where supply is meeting demand," NAHB senior economist Michael Neal said during a presentation at the International Builders' Show in Orlando.

Multifamily starts are expected to dip 2% this year to 354,000 units from a projected 360,000 total in 2017 and fall another 3% to 344,000 in 2019.

However, this does not mean the market is weak.

"From 1995 through 2005, multifamily starts averaged 335,000," Neal said. "Construction activity during the past four years has been running above this trend, and we are seeing the market stabilizing near more normal production levels."

Contributing to the stabilization of multifamily activity is low inventory of homes on the market. "Fewer homes for sale means that some renter households looking to own will have to rent for longer than they may anticipate," Neal explained.

Meanwhile, the national rental vacancy rate registered a slight uptick last year, but stands at its low mid-1990s level of 7.5%.

Steven E. Lawson, president of The Lawson Companies in Virginia Beach, Va., whose firm builds both affordable and market-rate housing, addressed the predicted increasing demand for affordable rentals as a growing number of households are rent burdened, meaning they are paying too much of their income in rent.

"Demand is far outstripping supply and the supply-side of the equation is constrained by Low-Income Housing Tax Credit pricing, rising construction costs and higher interest rates," Lawson said.

While the new tax reform law has significantly lowered corporate tax rates, it has also reduced tax credit prices, Lawson said.

"Rising labor and materials costs as well as falling prices for Low-Income Housing Tax Credits have changed the landscape so that some projected affordable projects are no longer viable," Lawson said. "Moreover, labor shortages are driving up labor costs and spreading out construction schedules."

On the plus side, the newly enacted pro-growth tax law is expected to mean lower tax rates for most individuals in all income groups, which will put more money into the pockets families, including renter households.

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