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Metal Roofing Market: Three Things That May Surprise You

Metal roofing is projected to grow faster than any other roofing product in both residential and commercial markets.  In fact, it is gaining ground in high-end homes based on its longevity and durability as well as the ability to be designed to look like wood shakes or slate and despite its higher initial cost compared to asphalt shingles.

In commercial markets, metal roofing is used in a wide range of building types (retail, office, industrial) and is often utilized for steep slope accent sections in conjunction with low slope sections.  Standing seam roofing is the predominant type but curved panels are becoming more prevalent.  Lifecycle costs are particularly appealing to commercial property owners.

Metal roof manufacturers are expanding their lines to keep up with demand and even a few asphalt suppliers have stepped into the metal market. So, what does this optimism for the market mean?

1. Job-site roll-forming is expected to continue as a significant factor in the metal roofing

  • Principia estimates that roughly 25% of installed metal roofing is field formed, primarily by the contractor, whether independent or part of the metal roofing suppliers’ organization. The portable forming machines made by manufacturers such as New Tech and Roll Former Corp have improved over the last ten years, and are becoming less expensive so that more contractors have invested in them.
  • Field forming is helping stimulate industry growth by minimizing shipping and packaging costs, reducing damage from transit, and allowing for significantly longer panels lengths that are not feasible to ship. In addition, it can shorten the lead-time for a contractor to get panels so they are better able to meet customers’ needs and be more nimble in selling and installation process.
  • Some metal roofing manufacturers such as Englert and Drexel Metals have contractor programs where the manufacturer handles the engineering, profile design, testing, code compliance, quality assurance, training, and marketing programs, then sells or leases the portable roll-forming machines to contractors and supplies them with coils.
  • As appealing as on-site roll-forming may sound, there are still contractors who prefer to have pre-cut panels conveniently delivered and ready to install. There are also other inhibitors to contractor roll-forming such as the upcoming State of Florida’s requirement that each panel be marked with the manufacturer’s information, making it more difficult for field formers to comply with codes.

2. Suppliers have the capacity and raw materials to keep up with demand, but there isn’t enough installation capacity

  • Most roofers prefer installing asphalt shingle roofs; installation is easy to learn, fast to install, and simple to fix if there are issues. Consequently, it’s easy to get a new asphalt crew up and running compared to a metal roofing crew. Metal roofing installation involves more craftsmanship and expertise so there are fewer qualified installers.
  • However, misperceptions are rampant among contractors about the complexity and challenges of installing metal roofing. Installation is not as hard as they may think but can become complicated due to conflicting instructions from manufacturers providing system-specific instructions. There is demand for more training focused on the details of installation (where to place screws, how many screws to use) rather than just information about the benefits of the product. Often contractors must learn in the field as they go, which dampens contractor adoption overall, and can have detrimental impact on quality.

3. Metal roofing has caught the interest of the large asphalt manufacturers and commercial building materials manufacturers

  • Metal roofing supply has been highly fragmented with many family-owned, multi-generational businesses and few large public companies. As market growth has made the industry more attractive it has also stimulated a movement toward consolidation.  Some recent M&A activity includes Carlisle acquiring Drexel with whom they had had a standing seam private labeling arrangement.  Also this year, Boral acquired the Headwaters stone-coated metal roofing group. Previously there were several other acquisitions of metal roofing manufacturers by large publicly held corporations such as NCI, BlueScope, and Gibraltar.  In 2017, while the market is still regionalized, there is an increasing number of participants with a national foot print.
  • In addition to the recent acquisition activity, asphalt shingle manufacturer such as CertainTeed and TAMKO have their own metal roofing lines while some metal building manufacturers such as Butler Manufacturing and Centria offer stand-alone roofing lines.

Principia’s upcoming Metal Roofing 2018 industry report will provide detail around the metal roofing market including market size and growth forecast, voice of customer feedback, channel dynamics and trends, market share review and overall strategic insights into growth of metal roofing.  Contact Us today or download the report brochure to Learn More about the report.

Hurricane Harvey’s Potential Impact on Building Materials Demand

Hurricane Harvey has set records for total rainfall and overall damage of residential housing and commercial  buildings. Unfortunately, the total economic impact has yet to be realized but the total damage of Hurricane Harvey is estimated to fall between $70 and $108 billion. Rebuilding will take years, similar to other devastating storms such as Katrina, Sandy and Andrew.

So, what does this mean for the building materials industry? How can suppliers, distributors and dealers support the effort over the longer term? One step is to understand the scale of rebuilding required and have sufficient supply of building materials stocked and accessible to the Houston and Beaumont areas. Principia Consulting has compiled an analysis of the level of building materials inventory that may be needed in each product category for residential home rebuilding.

Overall, there are 1.8 million housing units (single and multifamily) in the Houston and Beaumont Core Based Statistical Areas (CBSA) with an estimated total replacement value of $474 billion. Of course, not every housing unit will require replacement but the total existing housing stock gives pause to consider the overall potential level of building required. The detailed map for these two CBSAs in Figure 1 depicts the relative total replacement value of housing at the county level.

Figure 1: Houston & Beaumont CBSAs – Total Housing Replacement Value (in $MM) by County

Source: DemandBuilder® from Principia

These replacement value housing figures can be translated into demand for specific building product categories with Principia’s DemandBuilder® data products. DemandBuilder® Roofing reveals an estimated 54.5 MMSQ of existing roofing in the Houston-Beaumont areas with a replacement value of $3.7 billion in materials alone. The bulk of this volume is in the Harris County area with 35.4 MMSQ valued at $2.4 billion. Although these figures represent 100% replacement, a more complete assessment of the impact on material demand will only be finalized after the complete damage of the storm has been determined. For example, if a quarter of the roofs in Harris county need to be replaced, this would represent 8.9 million squares or $600 million of roofing that would be needed.

Further, as flood damage reports become available, Principia will pinpoint specific estimates of roofing demand at a zip code level to focus on the hardest hit areas. A detailed map of replacement roofing potential by zip code is shown in Figure 2 as an example.

Figure 2: Houston & Beaumont – Roofing Replacement Demand (in $MM) by Zip Code

Source: DemandBuilder® from Principia

Principia is in the process of developing detailed assessments for additional categories including lumber, siding, insulation, flooring, windows, doors and weather resistant barriers for the Houston and Beaumont CBSAs and other regions in Texas and Louisiana affected by the storm.

Contact Principia for further detail on projections for building materials demand within the storm’s affected areas.

With strong predicted growth in the category, dealers need to make sure they’re offering a product lineup that meets the needs of both contractor and consumer.

Michael Berger
LBM JOURNAL

Roofing products are not particularly exciting. Compared to other lumber and building materials such as decks, windows, doors and siding that are extremely visible from the curb and offer immediate visual sizzle, roofing materials can often fail to generate consumer excitement. Still, considering that the U.S. Dept. of Commerce reported new housing starts in January 2017 of 1.25 million—up 10.5% compared to the same month last year— and that a recent report from the U.S. Census Bureau’s American Community Survey indicated that the average single-family homeowner doesn’t move from their current home for an average of 15 years (meaning that most current homeowners will be facing a reroofing project during their ownership period), roofing materials are a strong category and one that should not be ignored, especially when offered as a complete system rather than as one-off individual products.

As Alex Pecora, Residential Products Manager for CertainTeed Saint-Gobain Roofing, explains, “Most people will only buy one roof in their lifetime. We want everyone to have the best roof they can possibly get, and due to the synergies involved with the different components, a designed systems approach is the best way to build a roof.”

Strong Growth Projected

Demand and projected growth for roofing products is anticipated by Principia to be strong not just for 2017 but for the next two years as well. In 2016, 124 million squares of roofing material were sold, with architectural shingle products leading the pack at 71 million. For 2017, roofing sales are projected at 129.7 million, with the two years following projected at 135.9 million and 140.4 million respectively, with single-family homes leading the way.

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Principia Consulting Announces New Report on the Metal Roofing Market; Growth Driven by Increasing Architect and Property Owner Acceptance

Metal roofing is in the spotlight within steep slope roofing as segment sales are growing from light commercial new construction and residential remodeling. Increasing architect and property owner acceptance has helped this industry segment become a multi-billion dollar market in 2017.

“The diversity and longevity of a metal roof offers many benefits for the market to consider. The high initial cost of metal roofing is offset by its long useful life of 50 years or more which presents the market with an interesting decision as to whether to invest more into the growingly accepted metal roof market”, according to Ken Jacobson, a Partner at Principia Consulting.

Several factors could be contributing to the increase in acceptance of metal roofing products. Residential metal roofs are now available in a wide variety of designs to complement any style home. In fact, traditional asphalt roofing suppliers have introduced highly styled products to simulate shingles, slate, tile and shakes adding to the curb appeal of these products. The green factor also could play a role with metal roofing typically containing an average of 50% of recycled content. In addition, metal roofs can be “cool” and lower annual household expenses, providing an energy efficient solution.

Principia is launching Metal Roofing 2017 which provides a vital baseline analysis for forecasting and business planning for current and new industry participants. Using 2016 as its launch point, the report analyzes demand drivers and trends by material, construction type, distribution channel, supplier and region, providing forecasts through 2020.

It also analyzes trends in current products, new product developments and technologies, and competitive materials, helping companies anticipate customer needs, plus insights into:

  • Up-to-date market size and forecast
  • Voice of Customer feedback on usage and preference trends
  • Channel dynamics and trends impacting demand
  • Market share review for metal roofing producers
  • Strategic insights into growth of metal roofing

Subscribers also have access to Principia’s market assessment and forecast. The interactive tool enables subscribers to evaluate the market through whatever lens they choose. It provides a year over year forecast to 2020. This powerful web-based tool is designed around best practices of data visualization and usability. The online platform enables users to login from any desktop or mobile device to access all of the data from the report, with the ability to instantly customize the data views.

Metal Roofing 2017 will launch in the third quarter of 2017 and is scheduled for completion in the fourth quarter of 2017.

Click Here to access more information on the Metal Roofing 2017 report.

Market Position and Customer Experience Assessment in Commercial Roofing

Situation: A specialty roofing manufacturer felt it was not leveraging its overall market position as several related businesses with separate commercial and operational resources competed with one another.

Approach: Principia surveyed the market – distributors, contractors, competitors, the client’s sales organizations – and mapped the buying process. Market needs were identified by customer type and also the gaps between customer requirements and the performance of the client’s individual businesses.

Outcome: A $30 million first-year sales lift resulted from a single sales organization created with national and strategic account designations and a more coordinated effort on A+D specification selling.

LIQUID APPLIED ROOFING: 5 KEY LEARNINGS

Principia recently published its report on the liquid applied roofing market and identified 5 key learnings for investment consideration.

1. Ripe for Consolidation. The liquid applied roofing (LAR) market is a fragmented market which includes over 100 participants including manufacturers and suppliers of private labeled products. With its high growth rate and relatively recent status as an established category segment, it is ripe for consolidation.

2. Growth Market. LAR accounts for only 24% of overall commercial roofing demand but is growing at nearly 10% annually – approaching 3X the growth rate for the commercial roofing industry which makes this high growth market an attractive investment opportunity.

3. Young Market. LAR is a fairly young market with both established and innovative technology deployed to meet the evolving market trends in commercial roofing. Opportunity exists to create a platform of product offerings to meet the critical needs in the market.

4. Market Demand. The new economic realities learned since the mid-2000’s recession combined with a focus on environmental ‘greening’ has led to increased market interest in a lower cost and no-waste solution for roof restoration offered by LAR.

5. Financial Benefit. From an owner’s point of view, LAR is typically considered a maintenance expense, rather than a capital expense, allowing the building owner to write the full cost of the restoration off in the year in which it occurs, rather than writing down the full cost of a roof restored through a traditional depreciation schedule over time.

Are you positioned to take advantage of this fast growing segment? Principia’s latest industry report on liquid applied roofing provides detailed insights and analysis.

DOWNLOAD LIQUID APPLIED ROOFING INDUSTRY REPORT BROCHURE

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$746 Million Liquid Applied Roofing Market in North America to Grow Nearly 10% through 2019 According to Principia Consulting Report

Liquid applied roofing has been the fastest growing segment of the commercial roofing market recently, estimated to grow nearly 10% per year through 2019. This growth rate is nearly three times that of the overall commercial roofing market as a whole which is driven by overall economic conditions, major weather events and the industry’s interest in “green” building concepts.

Total demand for liquid applied roofing in North America was valued at $746 million based on the manufacturers’ factory gate level in 2015. Increased interest in liquid applied roofing across restoration and new construction will drive market penetration by an additional 1% to 2% during the forecast period, resulting in accelerated growth rate of liquid applied roofing over traditional commercial roofing materials.

Acrylic Dominates
Acrylic liquid applied roofing is the most widely used product and accounted for 50% of total volume in 2015. The choice of acrylics has been technical and economical as it does not bake out or become brittle as asphaltic types do. Acrylic applications are most common in the Southwestern and Western climates due to its use as a reflective coating.

Existing Structures Continue to Drive Growth
The fastest growing applications for liquid applied roofing are forecast to be in restoration projects with nominal growth in reroofing. Restoration is projected to grow at 10.5% annually compared with 5.7% for new construction and 3.5% for tear-off construction. Liquid applied roofing will gain share in the commercial roofing space and primarily in the restoration construction type as it is projected to continue to find acceptance as a partial reroof solution as well as new roof applications over concrete decks.

Liquid Applied Roofing 2016 is Principia’s first exclusive coverage of the liquid applied market and provides a detailed analysis on the current and future state of this segment of the roofing industry. Principia’s knowledge in the market is driven through its historical coverage of the commercial roofing market through various reports dating back to 2008. The report draws upon interviews with nearly 600 manufacturers, distributors and dealers, roofing contractors and property owners. Using 2015 as its launch point, the report analyzes demand drivers and trends by material, application, construction type, region, distribution channel and supplier, providing forecasts through 2019.

“When reviewing our product development schedule, we couldn’t overlook the overwhelming interest and feedback from the industry regarding liquid applied roofing. Through in-depth conversations during our recent research efforts on the overall commercial roofing market there were signs that something was going on that warranted further investigating. This market assessment validates there is opportunity for growth and investments to be made”, states Susanna Ross, Industry Analyst at Principia.
liquid-applied-cover
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Principia Study: A Closer Look at Commercial Roofing

By Ken Jacobson

Roofing contractors need to be experts in their field to be successful; they also need to understand what property owners are looking for in roofing contractors and roofing systems. Having expertise may be an obvious requirement for growing a business, but understanding a customer’s mindset can differentiate the winners from the losers. Recent research conducted by Principia Consulting that focused on the commercial roofing market reveals an inside look into the property owner’s decision making process. Findings were collected from 116 commercial property owners and managers who were screened for their involvement and knowledge of commercial roofing programs.

Read Full Article From Roofing Contractor 

Principia’s Commercial Roofing 2016 report is available for purchase.

Commercial Roofing 2016

DOWNLOAD PRINCIPIA’S COMMERCIAL ROOFING INDUSTRY REPORT BROCHURE

 

Want to Grow Roofing and Wallboard Sales? Think and Act Like a Specialized Distributor.

Lumberyards need to learn what the one-steppers do well, then strive to beat them at their own game

Lou Rossi, Managing Partner, Principia Consulting

Traditional lumberyards have expressed strong interest in greater participation in roofing and wallboard and ceiling markets, according to our recent research. However, there’s a major obstacle facing lumberyards: Channel supply, which is dominated by specialized one-step distribution in both categories

Lumberyards accounted for only 10% of the $21 billion worth of roofing sold through wholesale and retail channels in North America in 2015. Similarly, lumberyards account for 11% of the $5 billion wallboard and ceilings channel revenue in North America last year.

Distributors largely serving these categories are narrowly focused, providing the ability to carry a deeper product line within the category. Roofing distributors tend to be bit broader, typically extending into siding and windows to serve overlapping contractor and installer customers. Wallboard and ceilings distributors are almost exclusively focused on these two products. Some companies sell related products like steel framing and installation tools but generally have not diversified into other product categories.

Read Full Article at ProSales Magazine HERE.

Principia Consulting Announces New Focused Report on Liquid Applied Roofing Market

Liquid applied roofing is a fast-growing segment of the $5.1 billion commercial roofing industry in North America. While this segment represents only 15% of the total market today, these roof coatings are primarily used in the reroof portion (including maintenance and restoration) of the market which represents over 70% of overall demand for all commercial roofing.

A number of market trends support greater use of liquid applied roofing. Property owners desire low impact reroofing systems to avoid higher replacement costs and major disruptions resulting from a roof tear-off. In many applications, roof coatings can be applied for 70% less than the cost of roof replacement. Liquid applied roofing can provide up to 25 years of protection for an existing roof that needs a major repair or roof replacement while also providing other benefits such as waterproofing and sustainability through energy efficiency. These roofing systems can also contribute positively to ASTM sustainability standards as well as other initiatives such as LEED and Energy Star.

“Growth in the high-performance coatings market is steadfast and has been fueled by the rising acceptance and increased awareness among contractors and building maintenance managers. This positive reception is considered not just as a maintenance solution for an existing roof but also as a preventive waterproofing solution. The growth in this segment is significant to the commercial roofing market and warrants further investigation”, according to Ken Jacobson, a Partner at Principia Consulting.

Principia is launching Liquid Applied Roofing 2016 which provides a vital baseline analysis for forecasting and business planning for current and new industry participants. Using 2015 as its launch point, the report analyzes demand drivers and trends by material, construction type, distribution channel, supplier and region, providing forecasts through 2018.

It also analyzes trends in current products, new product developments and technologies, and competitive materials, helping companies anticipate customer needs, plus insights into:

  • Up-to-date market size and forecast
  • Voice of Customer feedback on usage and preference trends
  • Channel dynamics and trends impacting demand
  • Market share review for leading producers
  • Strategic insights into the growth segments of commercial roofing

Subscribers also have access to Principia’s proprietary market model and forecast tool. This powerful web-based tool is designed around best practices of data visualization and usability. The online platform enables users to log in from any desktop or mobile device to access all of the data from the report, with the added ability to instantly customize the data views and integrate with their own information.

Liquid Applied Roofing 2016 launches in the second quarter of 2016 and is scheduled for completion in the third quarter of 2016.

From market insights to business strategies, we are ready to discuss your needs.

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Email: info@principiaconsulting.com

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