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State of the Industry 2009: Lightweight structures

March 1st, 2009 / By: / Fabric Structures

Challenge, opportunity and growth: Our market forecast for manufacturers of lightweight structures

In a market survey article published in the January issue of the Review, IFAI Market Research Services reported a growth rate of roughly 2 percent for the U.S./Canadian lightweight structures market in 2008. We also forecasted a growth rate of 2.5 percent for 2009. Since then, further economic updates have caused us to revise the 2008 growth rate for this lightweight structures market in 2008 to 1 percent, and to project a negative growth of –2 percent for 2009. For 2008, this translates to fabric consumption of approximately 12.5 million square yards. For 2009, our sales forecast for the U.S./Canadian lightweight structures market is 12.2 million square yards. Most architectural firms are expecting conditions to be weak throughout 2009.

As seen in the awning and canopy market, double-digit growth (11.8 percent for 2008) in the U.S. nonresidential construction market (lodging, office space, amusement and recreation, manufacturing and so on) helped this market to maintain a slow, steady level of growth. The commercial construction market by itself was down 3.6 percent in 2008, which has been a drag on the lightweight structures market in 2008.

Turmoil in the credit markets and the overall lackluster U.S. economy in 2008 were largely responsible for driving down billings at architectural firms. Business conditions at these firms ended on a sour note in 2008, with steep billing declines and ongoing weakness in new project inquiries. Business levels at commercial/industrial firms decreased dramatically in the final few months of 2008. Business conditions remain weak across the United States. In fact, firms with an institutional specialization, the one construction sector that had not been affected by the economic downturn, reported the first slowdown in nearly four years.

Outlook > Lightweight structures

Fabric suppliers see continued economic pressure for the remainder of 2009. Until the economy rebounds, the architectural building market segment will be sluggish. Growth will continue in selected areas of the world experiencing commercial building booms, such as China and Dubai. The industry will continue to consolidate and will emphasize higher quality fabrics where there tends to be a more steady, reliable demand (and better profit margins).

Manufacturers see slow growth for the U.S. lightweight structures market in 2009, which will be aided by the growth of ‘green’ projects and the trend toward using fabric in building projects in place of traditional (and often more expensive and less efficient) materials such as steel and concrete. Like marine fabricators, they feel that the industry will continue to suffer from a shortage of skilled labor.

Coupled with the increasing cost of raw materials and a slowdown in both commercial and residential construction, these factors will likely continue to drive up the cost of doing business and inhibit manufacturers’ ability to grow their businesses. Yet there are opportunities to grow and stay profitable for companies that manage their businesses closely, monitor all costs, and make smart, long-term decisions that focus on optimizing value (emphasizing quality and innovative products) for their customers.

Jeff Rasmussen is a market research manager at the Industrial Fabrics Association International, at +1 651 225 6967, e-mail jcrasmussen@ifai.com.

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