By Matt Bumgardner, Urs Buehlmann, Al Schuler And Karen .

Housing Study /By Matt Bumgardner, Urs Buehlmann, Al Schuler and Karen KoenigHOUSING TRENDS & IMPACTON WOOD MANUFACTURINGAn exclusive survey on the constructionindustry’s impact on actions in woodworking.Demand from housing and otherconstruction-relatedVALUE OF PRIVATE U.S. CONSTRUCTION, 2002-2012sectorsSingle family housingcontinues to be an important is500sue for the secondary wood prod-Nonresidential constructionResidential improvementsucts industry.Multi-family housingConducted in early 2013, this fourth an400nual survey provides updated information onthe status and actions of U.S. manufacturersjoint effort by Virginia Tech, the USDA ForestService, and Wood Products. (See about theBillion affected by these industries. The study is a300survey, page 28)200Housing Market SynopsisThough construction-based markets in manyareas remain challenging, market data shows100some improvement for 2013. According to theU.S. Census Bureau, inventories of new housescontinue to trend downward and were just ource: U.S. Census BureauJuly 2013 t Wood Products21

Housing Study continuedWOODWORKERS: CAUSES FOR SALES GROWTH IN 2009-2012a four-months’ supply in March of 2013. Similarly, figures from the National Association ofRealtors show existing home inventories alsoProductivity improvementsfell to just under a five months’ supply in March.The inventory declines correspond withWe developed new product linesincreased construction activity. The CensusBureau reports single-family housing startsincreased to about 535 thousand starts in2009We entered new marketswith existing products20102012, up 24% from 2011 figures; though still afraction of the nearly 1,716 thousand starts inthe peak year of 2005. Multi-family housing20112012We offered new servicesstarts have been trending upward of late andheld 31% share of the total starts in 2012.Gains in market share for theoverall product categoryAnalysis of year-over-year sales performance over the study’s four years revealsgradual improvement in terms of woodwork-We simply grew in proportionwith the overall economying firms reporting positive changes in salesvolume, with 58% reporting an increase insales volume from 2011 to 2012. Offsettingthat, 31% reported a decline in sales volume,Gains in market share forour specific company0121 (Minor reason) to 5 (Major reason)22Wood Products t July 20133

Housing Study continuedWoodWorkers: Causes for sales deClines in 2009-2012with the loss being attributed mostly to theslow construction and remodeling markets.Also, as noted in last year’s article, anotherdynamic at work is the decline in the numberof establishments in the secondary woodworking industry since the housing slowdown began. Having fewer competitors obviously can help surviving firms to increaseDownturn in thehousing market200920102011Downturn in theremodeling expenditures2012Downturn in nonresidential constructionsales, even in a down market.Actions to Grow Sales VolumeWe contracted in proportionwith the overall economyNot surprisingly, over the last three years largewood products firms engaged in more market-Offshore competitioning communications, more frequently, than didsmall ones. Other activities used to grow salesinclude productivity enhancements, i.e., leanMore domestic competitorsentered the marketstrategies and investing in equipment, as wellas new revenue sources such as new productsand markets, as well as increased advertising.Green building products are another marketing option for secondary woodworkersCompetition from nonwood substitute products012341 (Minor reason) to 5 (Major reason)SMALLER ORDERS?CUSTOM PRODUCTS?FASTER DELIVERY?It doesn’t matter if you’re making 1 to 10,000 drawers a day – Dodds has got the dovetail drawermachine and assembly equipment for you! Dodds, an American machinery manufacturer since 1882,gives you immediate service back-up, stocked replacement parts and state-ofthe art technology –smarter, faster and easy to set-up and run machines.Dodds also manufactures these other types of equipment: Notchers Builders Clamps Upenders Framing Tables and just about anything you require from a machinery builder.Stop! At Dodds Booth # 9000 at AWFS Fair, Las Vegas for the latest in drawer and productionequipment! Or call 800-843-6337 today; see what Dodds can do for you. The Dovetail Champion.(800) 84-DODDS (616) 784-6000 info@dodds.com www.dodds.com24Wood Products July 20135

Housing Study continuedPRODUCTION VOLUME PROPORTIONSto leverage in order to grow sales volume.haps represents stabilizing interest.Across the four years of this study, however,Demand for made-to-order, custom, andrespondents have said they have not seenmass-customized production continues toincreased sales resulting from customersbe important to the secondary wood industry.seeking to source products compliant with aFor 2012, 65% of respondents indicated thatgreen building standards program. As notedover 80% of their overall product mix could belast year, this trend could be related to theclassified as made-to-order, and 11% indicat-slow construction markets overall, or per-ed that their made-to-order production hadProportion of 2012 production volume associatedwith non-residential/business constructioncompared to previous -60%61-100%Proportion of 2012 production volume associatedwith single-family housing construction comparedto previous tion of 2012 production volume associatedwith residential repair and remodeling comparedto previous years403530Percent25201510500%1-20%21-60%61-100%

Housing Study continuedincreased compared to three years ago. Thismestically focused, with 89% indicating thatcontinues to be associated with higher price-more than 60% of their 2012 sales resultedpoints, as 68% of respondents reported theyfrom domestically produced and/or sourcedoperate at medium to high price-points, whichproducts. Of those with increased use ofis similar to previous years but perhaps showswood imports, 47% brought in components ora general trend upward.lumber, 23% imported finished products,Lastly, wood manufacturers that respondedto this year’s survey also continued to be do-and 30% imported both finished prod-ABOUT THE SURVEYucts and lumber or components.tutsenc can booei.s7erxp cam X tunitieerrposteMa w opwehornct nd out deliveudt:findnapro nt and line, ahetweetouid al ev ottomlouldwoinbdob.F7Rorl iting gl e yourouXy/wramA is exc mprovne.coiitythc,sfmaoestoartsinrcaingea p r butmeosuBCyomalorolwFor a fourth consecutive year theHousing Market survey was conducted in February/March via e-mail toWood Products subscribers. A total of244 usable responses were received.Similar to past years, cabinetmakers made up the largest componentof the sample, representing 42% of therespondents. Over 14% were householdfurniture producers, 11% were millworkmanufacturers, 8% were architecturalfixtures firms, 7% made office/hospitality/contract furniture, 6% produceddimension or components, and 1%manufactured countertops. While anadditional 11% indicated their production was in “other” categories, most(77%) could reasonably be classifiedinto one of the aforementioned categories, mostly millwork, architectural fixtures, or contract casework and closets.Over 81% of respondents representeda single facility operation.Responses were received from 41states, with FL, CA, NC, IN,WI, MI, MN,NY,TX, and PA each accounting for atleast 4% of the total responses. Geographic markets served ranged from48% doing regular business in the Midwest to 24% each doing regular businessin California and the Northwest.About the authors: Urs Buehlmann iswith the Department of Sustainable Biomaterials atVirginia Tech, Blacksburg, VA.Matt Bumgardner is with the NorthernResearch Station, USDA Forest Service, inPrinceton,WV, as was Al Schuler (retired).Karen Koenig is editor of Wood Products.wwMore@ WoodworkingNetwork.com/WPSee us at AWFS Booth# 460128Wood Products t July 2013

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