It was a relatively good year for the roofing industry in 2008 despite the volatility of raw materials and escalating distribution costs.
While economic concerns affected most businesses, the roofing industry nationally flourished as a result of a resilient reroofing market as well as demand created by storm activities.
In normal times, our industry operates very close to full capacity. Last year, though, we experienced modest year-over-year growth in residential roofing, pushing industry manufacturers to “sold out” positions.
Despite a good year in 2008, forecasts predict that the economy is likely to stay weak in the coming months. Even good companies will feel the impact of recent bailouts, bankruptcies and buyouts.
However, roofing remains an excellent and predictable business. In times like these, the secret to success is in knowing how to weather the storm. While companies may find themselves making some tough decisions, this could also be an opportunity for them to strengthen their position in the marketplace. In fact, there has never been a better time to work on improving customer relationships, enhancing quality, being more innovative and controlling costs.
Although you cannot control the weather or the economy, you can control their effects on your business by watching your market share and paying attention to your pricing. Rarely is there a winning outcome for companies that get caught in the “price war” game. There’s more to be gained by marketing value than by trying to become the lowest-price player in the market.
On the sales front, we’ve noticed that property owners today are buying smarter by shopping for products with advanced protection for longevity, better wind protection, better appearance, better warranty coverage and better systems. In our steep slope business, we’re seeing continued increases in our designer lifetime shingles business. In low slope, we’re anticipating continued growth in our TPO membrane business, which is now the best selling roof system in North America.
Though the trend toward informed consumerism is growing in roofing, commodity trends are suffering. With the availability of information through the Internet and other media growing, property owners are much more educated about the products and services they buy these days.
While there always will be a segment that will buy the lowest price, even those with less discretionary income are leaning toward buying better products and systems than in the past. The simple fact is they want to avoid choosing a product that will eventually fail them - and which will, in the end, cost them even more.
So how does our industry affect the trend? In general, as long as we keep educating property owners on the risks and potential problems associated with choosing an inferior contractor and inferior system with an inferior warranty, customers will spend the money needed to receive superior value in return.
Also, we’re realizing the effects of the “green” consumer movement in the roofing industry, and manufacturers are exploring ways to offer more green options - a move that likely will result in more investments in green systems and technologies in the future.
As an industry we have the opportunity to take a leadership role in green initiatives and to demonstrate that “green” does not necessarily mean a garden roof. Better defined, it’s about doing the right thing for the environment, whether it’s recycling materials, using reflective materials or investing in solar roofs.
In summary, while the state of the roofing industry is good, we must remain guarded. All of us in the industry must recognize that we are in a soft economy with no promise of a quick recovery. Yet, while the economy certainly is a factor, it is our own performance that will make the difference. The world can change in a moment, and industry players must remain flexible enough to make adjustments to meet whatever challenges lie ahead.