Wood Window and Door Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 925 wood window and door manufacturers in the US produce window and door units, window and door frames, window sashes, and doors from wood or wood clad with metal or plastics. Large firms primarily use a high volume/low margin operating model, while small firms generally focus on custom products with high margins. Most large firms also produce windows and doors made of metal, plastic, or composite materials.
Competition from Alternative Materials
Wood window and door manufacturers face competition from products made with alternative types of materials, which are generally less expensive and easier to maintain.
Dependence on Residential Construction
Demand for wood windows and doors is highly dependent on the residential construction industry, which is vulnerable to changes in economic conditions.
Industry size & Structure
The average wood window and door manufacturer operates out of a single location, employs about 62 workers, and generates about $14 million annually.
- The wood window and door manufacturing industry consists of about 925 companies that employ 57,600 workers and generate about $16 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 82% of industry revenue.
- Large firms include Pella, Andersen, Masonite, JELD-WEN, and Weathershield. Large firms offer products made with alternative materials (vinyl, steel, aluminum, fiberglass) and most have operations in foreign countries.
Industry Forecast
Wood Window and Door Manufacturers Industry Growth
Recent Developments
Sep 25, 2024 - Architectural Billings Decline
- Demand for building design services declined in August compared to the prior month, marking continued softness for architectural billings, according to a September report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) declined to 45.7 in August from July’s reading of 48.2. Any reading of 50 or more indicates growth in architectural billings. August was the nineteenth consecutive month to see a downward trend in billings. The score for new project inquiries was flat at 52.4 in August, but the index for the value of new design contracts increased from 46.5 to 47.3. The AIA’s Chief Economist, Kermit Baker said, “Unfortunately, even the impending interest rate cuts didn’t move the needle on project inquiries or new design contracts at architecture firms. Hopefully, once the trajectory of further cuts gets clarified, delayed projects will restart, and new projects will gather momentum.
- The number of building permits issued for single-family, privately-owned housing units, a demand driver for building inspection services, increased 2.8% month-over-month but declined 0.5% year-over-year in August 2024. Single-family housing starts grew by 15.8% month-over-month and increased 5.2% year-over-year in August. Single-family housing completions dropped 5.6% month-over-month but grew 8.4% year-over-year in August. The August rise in housing starts was helped by moderating interest rates. However, builders still face supply-side headwinds, including labor and lot shortages and stubbornly high prices for some types of building materials, according to the National Association of Home Builders (NAHB).
- Home builder confidence in the single-family market improved in September amid moderating mortgage interest rates, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose two points to 41 in July 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. September’s gain in the HMI followed four consecutive months of declines. The HMI survey also showed that 32% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 5% was the lowest since July 2022. However, while the Fed’s recent rate cut will reduce the cost of land development and construction loans, builders are seeing increased competition from existing home listings in some markets.
- At its meeting in September, the Federal Reserve voted to reduce interest rates by half a percentage point, which would put the benchmark federal funds rate between 4.75% and 5%, according to The Wall Street Journal. Projections of fed officials’ moves suggest another four quarter-point cuts will come next year, which would bring the federal funds rate down to 3.5% by the end of 2025. Home-improvement retailers will benefit if lower interest rates translate into increased remodeling spending, according to Business Insider. Home Depot and Lowe’s have seen their fortunes erode as high interest rates have prompted homeowners to postpone big-ticket projects. High interest rates have also curtailed existing home sales, which are a key driver of remodeling demand.
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