Brad Segal, President of Bradco Supply, saw some bright spots in 2008, but noted the weak economy is likely to impact revenues in 2009. “While many sectors and markets within the industry were down significantly in 2008, the roofing industry overall fared better than most people expected,” said Segal. “Commercial roofing was stronger than expected, and the industry benefited from weather events and rising prices. We had a surprisingly good year as a company.”
Asked about the outlook for 2009, Segal replied: “I am usually a very optimistic person - but without any significant weather events I think we are looking at a 10 to 20 percent drop in unit demand with some possible softening of prices. We see the slowdown in the market leading to more consolidation among manufacturers, distributors and contractors.”
Segal expects both residential and commercial work to be down this year. “With the weak economy, many people will repair their roofs instead of replacing them, leading to lower sales volume for the industry,” he said.
Contractors plan on seeing a drop in revenues, said Segal. “They should be looking at all of their expenses and making sure their overhead is in line with the sales volume the market will allow them to do,” he said. “They should be looking at reducing all expenses that do not contribute to generating revenue. They should also be looking at ways to increase revenue through increased marketing efforts and diversification.”
He noted that financing issues could impact the industry in many ways. “Building owners and home owners will have a difficult time getting financing for projects, contractors will have trouble getting or maintaining the financing they need to operate their business, and payments from customers will slow as companies and individuals try to preserve cash.”
“Our biggest concern is the increase in bankruptcies affecting contractors,” he continued. “Not only will there be more builder bankruptcies, but bankruptcies by companies like Linen ’n Things and others could have a major impact on our customers.”
“We all need to operate as efficiently as possible this year,” he concluded. “Contractors can work with distributors by planning their jobs as far in advance as possible so as to minimize the number of deliveries needed to service the job and route our trucks efficiently. This will also allow us to better plan our purchasing and manage our inventory.”