Principia is pleased to announce and welcome Nancy Musselwhite as Industry Analyst. Nancy joins Principia’s analyst team delivering high quality research products to the building materials and construction industry. Nancy brings a tremendous amount of expertise within business to business primary research and managing the client experience across multiple industrial and construction markets
As Industry Analyst, Nancy’s focus is on executing and preparing topical industry reports and Principia’s BuilderSeries® research data products. She is responsible for managing and executing primary and secondary research efforts to provide critical market insights. Prior to joining Principia, Nancy was Senior Consultant with Geo Strategy Partners where she was responsible for independently leading and coordinating diverse market research and strategy projects.
Ken Jacobson, Partner at Principia comments “We’re excited to welcome Nancy to the Principia team. Her contribution will ensure continued emphasis on having industry experts engage with the market and help our clients reach their growth goals.”
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.
Annual United States housing permits in 2015 grew a healthy 12% year-over-year, a slight deceleration from the 15% CAGR between 2010 and 2014. Multifamily growth continued to outpace single family for the nation as a whole, though this gap narrowed. Annual growth for multifamily and for single family from 2014-2015 was 18% and 9% respectively, compared to a CAGR of 27% for multifamily and 9% for single family from 2010-2014.
Several important regional patterns intensified in 2015. West and Southeast regions experienced the highest 2010-2014 single family CAGR and were also the only two regions where the single family growth rate increased in 2015. In the Northeast, multifamily permits have grown significantly faster than single family permits in recent years and 2015 was no exception with a huge 71% increase in multifamily which offset a decline in single family permits.
Several notable divergences from recent trends were also evident. The Southwest region, which was the second strongest in terms of overall growth from 2010-2014, saw a notable slowdown in 2015 and was essentially flat in both single family and multifamily units. Similarly, the Midwest region saw a slowdown in growth for both unit types. The Northeast jumped from fourth to the top spot in terms of overall permit growth, though as mentioned this was notably driven by multifamily permits. The Southeast region also picked up steam in 2015, outgrowing the Southwest and West regions and adding to its substantial national lead in terms of total annual permitted units.
Staying abreast of changing trends in housing permits is a critical strategic consideration for manufacturers and distributors of building materials. The recent 2015 housing permit data shows multifamily housing continues to grow faster than single family, suggesting a potential change in terms of product mix and account targeting. However, an evaluation of recent data highlights the gap in growth rates is narrowing and potentially becoming more regionally focused, particularly in the Northeast. Comparing 2015 growth with recent trends additionally suggests the Southeast and West regions will continue to drive demand for companies heavily focused in new single family construction, as single family growth rates picked up steam while other regions were flat.
Housing Permits Summary
A summary of additional findings titled Housing Permits – Potential Impact on Building Materials is available for download.
Situation: A diversified building products company sought outside assistance to develop a business case to more fully participate with a portfolio of select products and services aimed at the commercial construction market.
Approach: Principia helped define channel needs within target categories served among the A&D community, contractors, and property owners. Points of need and specific areas of improvement were identified. From the analysis, Principia recommended repositioning several product lines and expanding value-added services to better support the products in each key markets.
Outcome: The client implemented the new market-facing strategy and the sales resources required to meet the projected business plan. Within a three-year time frame, the client increased sales by 10% but more importantly increased its EBIT margins by 300%.
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