Market Snapshot: Building & construction


Last year was tough on the building and construction market, but hope shines eternal, as was evidenced at this year's International Builders Show in Las Vegas, a fitting place for these who continue to bet on a return of the housing market.

Construction isn't out of the woods yet—in fact, don't get your hopes up for 2010—but there is a glimmer of light for 2011, if processors and others can hang on that long. Total U.S. construction spending on an annual basis is expected to be down 12.2% for 2009, and is forecast to drop 5.6% in 2010 before growing 7.6% in 2011 and achieving double-digit growth in 2012, according to the Q4 U.S. Construction Briefing by IHS Global Insight's Construction Service.

Dow Powerhouse Solar Shingles
Dow Powerhouse Solar Shingles protect and power the home.
DaVinci Bellaforte black slate
DaVinci’s Bellaforte black slate roof provides easy installation and long life using engineered virgin TPO material that is 100% recyclable.

While the construction industry has been showing pockets of resurgence in the residential sector, nonresidential construction will continue declining for many quarters to come. Commercial construction in particular is forecast to post sharp year-on-year declines during 2010, outweighing the developing strength in the residential sector and dragging annual construction growth down into negative territory.

The residential market posted its first quarter-to-quarter increase since the beginning of 2006 and is forecast to grow 9.6% in 2010 on the strength of the single-family sector, which is on the mend and expected to grow 4.1% in the fourth quarter compared to the quarter previous. However, on an annual basis, spending levels will be 22.1% lower. In 2010, single-family construction spending is forecast to grow at a recovery pace of 32.6%. Multi-family construction fell 30.5% in 2009 and will drop 47% in 2010 because of low prices in the single-family sector and tight credit in the commercial market.

A report from the National Assn. of Home Builders released at the International Builders Show (Jan. 19-22) gave mixed reviews of the industry. Home prices rebounded slightly during Q4 2009, and housing starts were up 35% from January 2009 (357,000) through November 2009 (482,000). However, the national unemployment rate is stagnant around 10%, helping consumer confidence to stay in the doldrums.

While all of that doesn't bode well for new-home sales, a study released Jan. 21 by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University noted that home improvement spending is likely to reach a cyclical bottom in the current quarter and steadily increase through 2010, according to the Leading Indicator of Remodeling Activity. The LIRA projects annual declines in home improvement spending will ease from the current rate of 12.0% to 3.1% in Q3 2010.

"It appears we may be near the bottom of the current remodeling cycle," says Nicholas P. Retsinas, director of the Joint Center for Housing Studies. "With signs of stabilization in the national economy, homeowners are once again planning home improvement projects."

Remodeling industry fundamentals are generally beginning to turn positive. "Sales of existing homes are on the rise and home price declines are moderating in most markets across the country," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies. "Financing costs are also favorable, although credit availability remains tight for many households."

"Green" building activity saw some impressive growth in 2009 "amid a brutal construction market," according to the second annual 2009 Green Building Market & Impact Report by Rob Watson, the "Founding Father of LEED" (available through GreenerBuildings.com). The report says that floor area certified by the U.S. Green Building Council's LEED (Leadership in Energy & Environmental Design) green building rating system in 2009 is estimated to grow by more than 40% compared to 2008's totals, for a cumulative total of more than 7 billion ft2 worldwide since the standard was launched in 2000.

Some of the report's key findings:

  • Total water savings from LEED through 2009 is estimated at 15 billion gallons, comprising 0.5% of annual nonresidential water use. By 2030, LEED measures are estimated to save nearly 1.3 trillion gallons of water, equivalent to 30% of current annual nonresidential water use.
  • Annual carbon dioxide savings from LEED buildings is approximately 2.9 million tons from energy efficiency and use of renewable resources, a figure that is expected to grow to 130 million tons per year by 2020 and almost 320 million tons annually by 2030.
  • Based on average materials costs, green building materials represented approximately $7 billion in cumulative spending through 2009, which is expected to reach a cumulative $230 billion by 2030.

New products

Solar energy continues to rank high among ways to reduce home energy usage, as its adoption becomes more mainstream. No, these aren't those huge, ugly contraptions that protruded from rooftops back in the '80s-the scourge of homeowners associations. New from Dow Solar Solutions are Powerhouse Solar Shingles, which install and perform like a standard asphalt shingle while harnessing the power of the sun to offset a portion of a home's energy usage. In fact, the Powerhouse Solar Shingle was named one of the "50 Best Inventions of 2009" by Time magazine.

"This is one-of-a-kind technology that helps remove the obstacles to widespread adoption of solar roofing," says Jane Palmieri, managing director, Dow Solar Solutions. "The system intentionally mimics asphalt shingles in appearance, form, and function, making it compatible with the vast majority of new and existing residential rooftops."

From a consumer standpoint, Palmieri says one of the biggest benefits of the Dow Powerhouse Solar Shingle system is its integrated aesthetics. The shingles are installed flat against the roof deck (see photo, opposite), unlike traditional frame-mounted photovoltaic (PV) panels that are installed above the deck. "They are the first-ever mass-market building-integrated photovoltaic [BIPV] shingles that seamlessly blend with residential asphalt rooftops while also providing the roof protection of the asphalt shingles that they replace," Palmieri said.

The CIGS-based (copper indium gallium selenide) PV cells are incorporated into the product by overmolding them with a proprietary Dow polymer formulation, resulting in a unique product design that has reveal, weight, and installation practices similar to an asphalt shingle, but also generates electricity. Electrical circuitry is integrated into each shingle and the shingles are connected by wireless plug-style connectors.

Other roofing advances come from DaVinci Roofscapes, which continues to make inroads into the roofing market with its injection molded tiles. The Bellaforte line was introduced last year, with its patented snapfit, self-locating tiles, and recently received the Dade County, FL Notice of Acceptance for use in hurricane zones. The Bellaforte tiles can withstand straight-line winds of 110 mph, and hurricane zone force winds of 175 mph.

This year DaVinci introduced its vari-blend technology, which creates a natural shading of the roofing tiles. "We do this with a technology that allows us to change colors on the fly," says Bryan Ward, VP of operations. "The transitional coloring makes the tiles look more natural." Synthetic DaVinci shake roof tiles save trees and last longer than wood shakes, and the company's pseudo-slate roof tiles save labor and result in less waste than stone slate, which often cracks and breaks during installation, according to the manufacturer. Also, all the Da-Vinci tiles are 100% recyclable.

DaVinci has its own molding operation at its Kansas City, KS facility, and buys molds from StackTeck, R&D/Leverage, and International Molds. The DaVinci roofing tiles are molded from multiple virgin thermoplastic olefin resins containing organic fire-retardant colorants and UV stabilizers.

PlyGem (HQ in Cary, NC) manufactures a variety of polymer building products, and Jerry Blais, VP marketing for PlyGem Siding Group, says the company has "made a lot of progress in the past couple of years" with them. Its injection molded Cedar Shake and Shingle siding products have been "the greatest growth categories" for the company, says Blais, offering an alternative to extruded vinyl siding. "The natural look to these products comes from our ability to digitize a real wood product, and cut that pattern into the molds to get the fine detail," he explains. "We have a variety of variegated colors to add to the natural look, which has really advanced over the last five years." —[email protected]

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