Principia’s Commercial Insulation 2019 data product features interactive dashboards, and will help your company better understand demand, growth, supply, and the voice of customer perspectives from industry participants. The infographic below highlights a segment of the voice of customer data specific to contractors and how they select products and brands of commercial insulation.
Earlier this year, Principia reported observing a downward trend in total housing starts and per capita housing starts observed over 60 years of available historical data. Following the analysis of the causes and consequences of this downward trend, the focus shifted to analyzing existing housing stock in the United States to understand the relative influence repair and remodeling has on building product demand.
Over the past 20 years, existing housing stock has generally grown at the same rate as the U.S. population, resulting in existing stock per capita holding nearly constant. Looking at the steady existing stock per capita in combination with the long-term decline in starts per capita, new construction’s share of the housing supply has fallen from greater than 2% throughout much of the 1970s to less than 1% in recent years. This decline means that the repair and remodel share of building product demand will continue to increase.
Figure 1: Housing Stock versus Population, 1971–2017
Three Takeaways from Figure 1
- The existing housing stock outpaced U.S. population in terms of year-over-year growth every year between 1970 and 1989, leading to steady growth in the housing stock per capita from 0.335 (2.99 persons per home) in 1970 to 0.428 in 1989 (2.34 persons per home). This level has not been reached again since 1989.
- After a brief decline between 1989 and 1991, the housing stock’s rate of change varied closely around population growth, which has been below 1% and decelerating since 2000. As a result, the existing stock per capita has held nearly constant at an average of 0.419 (2.39 persons per home) since 1989. See Figure 1 and top chart of Figure 2.
- Housing stock per capita has a statistically significant positive relationship with time before and after the peak in 1989, as well as over the entire period shown in Figure 1 and 2. However, the rate of increase has declined sharply; the trend rate of change leading up to 1989 (0.0048/year) is over 10 times greater than the following years (.0004/year).
Figure 2: Housing Stock per Capita and Starts, 1970–2017
As shown in the bottom graph of Figure 2, the trend in new construction’s share of the housing supply parallels the trend in declining new housing starts per capita: falling over time at a declining rate. Housing starts as a percent of the existing stock have dropped from an average of 1.9% in the period from 1970–1989 to 1.1% in 1989–2017. This decline represents a statistically significant negative correlation with time across all periods measured, however the trend rate of change (-0.02%/year) is more moderate from 1989 onwards than (-0.06%/year) from 1989 and before. It is noteworthy given the cyclicality of new construction that the last few years of data have been above all three calculated trend lines.
Implications for Industry Participants
One possible explanation for both trends is that the U.S. housing supply is approaching a steady state at which new construction is just enough to offset population growth and the existing stock retired from use. Whatever the cause, there seems to be one clear implication for manufacturers and distributors of building materials: new construction’s share of the overall housing supply has declined over the long term, and if population trends continue, housing starts may not return to its former prominence over the foreseeable future. With this knowledge in hand, most building materials suppliers and dealers should consider focusing more on the repair and remodel market to drive revenues in the current upcycle as well as when the housing market eventually turns down.
Pro and Retail Channels in LBM Distribution 2019 is Principia’s latest data product exploring the market forces and the likely impact facing industry participants in pro and retail channels for the distribution of lumber and building materials. These channels play an important role in the construction industry by (1) providing access to the marketplace for manufacturers and (2) offering builders and contractors several options to purchase many types and brands of products from the same source, while often extending credit terms to the customer.
The research and analysis provide an understanding of the market conditions and drivers affecting the future of each channel, as well as discuss various threats and trends for dealers, retailers and manufacturers to consider.
Commercial Insulation 2019 from Principia provides insulation manufacturers and distributors with a comprehensive market-based source of information to understand current industry trends and dynamics in the North American commercial insulation industry.
A range of topics are addressed through voice of customer feedback such as:
- Impact of changing codes on building practices
- Material and brand decision rationales
- Brand awareness and satisfaction
- Material selection by application and region
- Purchase and information sources
Two-Step Distribution 2019 is Principia’s latest data product exploring the market forces and the likely impact facing industry participants
in two-step distribution of lumber and building materials. Two-step distributors provide the necessary logistics to deliver products to pro dealers and retailers that have direct relationships with builders, contractors and do-it-yourself homeowners, as well as support to create demand for new products.
The research and analysis dig deeper to provide manufacturers and distributors with an understanding of market conditions and influences
expected to affect this part of the LBM distribution industry in the future.
Commercial Roofing 2019 is Principia’s latest research on the North American commercial roofing market. The data product explores current and forecast market demand, as well as provides insights on market dynamics for roofing manufacturers and distributors.
A range of topics are addressed through voice of customer feedback, such as:
- Usage by building type
- Impact of changing building codes
- Contractor loyalty program
- Maintenance program participation
- Material and brand decision rationales
- Brand awareness and satisfaction
Commercial insulation manufacturers and distributors need a comprehensive market-based source of information to understand current industry issues and dynamics. Principia’s latest research on commercial insulation provides the data and insights needed to drive strategic decision making. Commercial insulation participants will learn more about:
Principia’s Commercial Insulation 2019 data product features interactive dashboards, and will help your company better understand demand, growth, supply, and the voice of customer perspectives from industry participants.
The data product is currently available for purchase. Download the Commercial Insulation 2019 brochure to learn more about the features and benefits offered. Or contact us directly for more information.
How are window manufacturers marketing to different generations of homeowners? Using our Voice of Customer survey data, we’ve created a comparison of two windows buyer generations—Millennials and Gen Y versus Baby Boomers.
Does this fall in line with your perception of window buyers?
Principia’s BuilderSeries® include more information about customers and their impact on demand, supply, and growth for building materials products.
It’s critical for manufacturers and distributors/ dealers of lumber and building materials to understand how distribution channels are rapidly changing. Principia’s latest additions to our data product lineup analyze the market and deliver insights on LBM distribution—specifically focusing on two-step distribution and on pro and retail dealers. Two-Step Distribution 2019 and Pro and Retail Channels in LBM Distribution 2019 explore a range of market forces and the likely impact facing industry participants. The research and analysis dig deep to understand the market condition and the drivers affecting the future of each channel, with several issues highlighted for each distribution product.
Each of Principia’s data products include a series of interactive dashboards in addition to key insights summarized by industry revenue, industry growth, customer insights, and leading dealers/ retailers and leading distributors serving each channel.