After bottoming out in 2009, residential new construction increased slowly for two years, before enjoying a more sizable jump in 2012. Last year, single-family starts increased 24 percent, while the multifamily segment grew 38 percent. The AAMA/WDMA study predicts similar levels of growth in both segments over the next two years—at least.
Total new housing starts will approach the 1.5 million mark by 2015, up from 836,000 units in 2012. All regions of the country are expected to see gains over this period, with the South accounting for more than 50 percent of the market in 2013.
The report looks to estimates from the Joint Center for Housing Studies at Harvard University to help gauge the remodeling and replacement market. After five years of decline, Harvard saw a slight turnaround in 2012, with residential improvement expenditures increasing 1 percent to $114 billion. Pent-up demand is expected to translate to more than 9 percent growth this year to $124.3 billion. Further gains are expected for 2014 and 2015, but the market will not reach pre-recession levels by 2015, the study notes.
Significant reductions in federal tax credits for energy efficient products took a toll on residential windows in 2011, but demand increased about 6 percent overall in 2012, with strong growth in the new construction market offset by a weak renovation market (Table 1). Window sales
increased slowly for two years, before enjoying a rebound in new home construction.
Vinyl continues to dominate the residential market, holding a 69 percent market share as it continues to take share from wood. Over the past year or so, aluminum has enjoyed a small rebound in the residential market thanks to stronger demand on the new construction
side. Fiberglass and other types (cellular PVC, wood/plastic composites, etc.) are also predicted to see modest growth.
Other Residential Products
Entry doors, patio doors and interior doors followed a pattern similar to windows, with sales declining slightly in 2011, and rebounding last year thanks in large part to the growth in new home construction (Fig. 1). Patio and entry door volumes increased about 5 percent in 2012. Interior doors, which are less dependent on the remodeling and replacement market, were estimated to be up 15 percent.
In the entry door market, steel remains the dominant material with a market share just over 50 percent. The study sees fiberglass, which has gained share in recent years and now accounts for more than a third of the market, continuing to take share from steel. Meanwhile, wood entry doors have established a strong niche in high-end and replacement applications, which researchers expect will continue.
Skylights have been enjoying slight growth since 2009, and once again saw a 1.8 percent increase in sales last year. Sales gains of about 10 percent in the new construction market were slower than expected, and gains will continue to be modest, the AAMA/WDMA study says. Bigger gains will come with the rebound in the remodeling and replacement market, which now accounts for about 80 percent of skylight demand.
Bottoming out in 2010, the nonresidential market has seen slow but steady increases since then, according to the AAMA/WDMA study. Contract awards, which reflect activity related to new nonresidential construction and major additions to existing structures, were up 6 percent again in 2012, with most nonresidential building construction sectors seeing gains as vacancy rates subsided.
The office/hotel/institutional category was off last year, while the manufacturing/warehouse and retail sectors increased. Looking ahead, the report sees market growth across the board through 2015. Nonresidential window sales should be up about 5 percent this year, topping 400 million square feet of vision area. Growth levels should improve in 2014 and 2015, according to the study. Nonresidential entry and interior door sales are expected to follow a similar pattern.
The AAMA/WDMA study features historical data for 2006 through 2012 and forecasts for 2013 through 2015 based on projections of construction activity and appropriate usage factors developed by Ducker Worldwide. The database for the study’s information has been compiled from a number of sources, including the Census Bureau, and association member and non-member companies.