Rapidly changing technologies and new home designs have surprised some industry executives.
Designs That Shift Building Material Demand
Rapidly changing new home designs have surprised building product company executives who have not been speaking directly with the home building community. The pronounced home builder shift to fewer rooms and more open space living has reduced finished wall space per sq ft by 8% over the last decade. These design trends also include great rooms and indoor/outdoor spaces with large retractable glass doors.
- The beneficiaries. Several window companies as well as the makers of outdoor remodel products and engineered wood beams have benefited greatly from the shift. The CEO of one of these firms spoke at our 2018 Design Summit right before selling his company at a significant premium.
- Damaged industries. Some drywall, paint, and baseboard company executives apparently missed this shift, despite its coverage by the industry media. Our most disappointing anecdote was a meeting we had last year with the head of R&D at one of these firms who couldn’t even name one of the large production architect companies in the industry.
Technologies That Help Products Last Longer
Building product improvements over time have reduced replacement demand, as products are lasting longer than they used to. Roofing is one of the best examples. Roofs now last 7–8 years longer than they did 20 years ago, yet roofing companies and their investors have been modeling replacement demand as if the superior product didn’t matter. There are many more examples of products that will last longer before needing replacement or repair, including flooring, lighting, and composite products.
The solution is simply better communication.
- Talk to the biggest architects and home builders. A little communication can go a long way. A DesignLens™ membership provides a very cost-effective way of monitoring production design trends and includes an annual gathering of the best production builders, architects, and industrial designers. If you want to stay on top of shifting building product trends, you should be a member. We also suggest the Home Improvement Research Institute.
- Involve product experts in your forecasts. The repair and remodeling impact of most technology shifts is usually known decades in advance, yet somehow it gets ignored by the finance and investment teams at forecasting time. Since they are not product experts, perhaps they just don’t know. Our building products forecasters do their best to monitor product improvement technologies to help forecast repair and remodeling demand, and we suggest all companies do the same.