Tuesday, February 9, 2016

Construction recovery? Material sales rise

Insulation, siding sales expected higher, says Principia

Construction recovery? Material sales rise


Demand for home and business insulation "is projected to rise by $1.9 billion" by 2014, to 13.7 billion sq. ft. worth $8.2 billion, from last year's 11.1B ft2 and $6.2 billion, Malvern-based Principia reports.

Principia also expects residential siding and trim sales will rise, with siding reaching 71.6 million units ("squares") worth $7.2 billion, from 58 million worth $9.1 billion, and similar increases in roofing material sales, says Lou Rossi, managing partner and cofounder of the 50-person, 17-year-old "strategic marketing" firm, which specializes in building materials and construction chemicals.

The firm surveyed 200 insulation contractors, architects and builders who gave online responses, and another 100 in interviews, Rossi told me; and a total of 150 for the siding data.

What's behind the increases?  About one-quarter of projected insulation demand growth is due to stricter U.S. Department of Energy guidelines that encourage "continuous insulation with no thermal breaks and no air leakage."

That policy favors Dow Chemical's high-R Sytrofoam insulation and spray polyurethane foam. Sales of cellulose insulation, like the products made from recycled newspaper by a joint venture between Casella Waste and Louisiana Pacific, as well as fiberglass roles made by manufacturers like CertainTeed, are also expected higher, Rossi said.

But three-quarters of the expected increase "is related to recovery," Rossi added. Builders expect a steady increase in building starts from the lows of 2009-10, according to Principia. 

Similarly, residential siding demand will grow steadily "due to the increasing need for re-siding and repair along with increased activity in new construction," said Principia partner Ken Jacobson in a statement. He said manufacturers have spent the recession improving siding and trim products so they are less expensive, eaiser to install, and more code-compliant.

The housing industry collapse sharply reduced demand for construction supplies, leading to job cuts at manufacturers like aluminum extruder Aluminum Shapes LLC in Pennsauken's Delair section, once among South Jersey's biggest industrial employers, and now owned by Florida-based buyout firm HIG Capital, which also owns the Signature aluminum works in Canada. Aluminum Shapes officials declined to comment on current staff or sales levels.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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