AWNINGS AND CANOPIES
In 2017, growth in the awning market increased, in the low single-digit range. Contributing to the growth was an approximate 6.5 percent rise in housing values in 2017; a 4.1 percent increase in home values is anticipated in 2018.
Many homeowners used their rising home equity to remodel in 2017. According to the National Association of Home Builders Remodeling Market Index (RMI), the RMI figure for fourth quarter 2017 was 60. (An RMI above 50 indicates that more than half of remodelers reported that market activity is increasing.) Remodelers across the U.S. are seeing increased demand for residential repairs and expect to be busy well into 2018—especially in the southern states, due to damage caused by hurricanes.
U.S. construction activity increased 3.8 percent in 2017 over 2016. Residential construction was up 10.4 percent in 2017 over 2016; nonresidential construction was down slightly at -0.6 percent.
In 2016 and 2017, the U.S. and Canada had good weather conditions in April through June. The result was a longer selling season for awnings, which translated into an improvement in awning sales in 2017—helped by a much stronger U.S. economy compared to 2016.
In November 2017, a survey was administered to U.S. and Canadian awning suppliers and end product manufacturers. Eighty-three percent of the suppliers and end product manufacturers surveyed reported that the outlook for the awning and canopy business will be somewhat better in 2018 than it was in 2017. This year, a 4.1 percent increase in home values, unemployment hovering close to 4.4 percent, and (weather permitting) an earlier start to the awning selling season should lead to an increase in sales in the U.S. and Canadian awning/canopy markets.
Several developments in 2017 helped to support growth in the marine fabric market:
• A sunny and warm summer, which helped to bolster boat sales
• A stronger job market—unemployment rate at 4.4 percent in 2017 (4.9 percent in 2016)
• A consumer confidence index averaging 120 in 2017 (in general, a consumer index above 90 correlates
to increased consumer spending)
• Consumer spending of 2.7 percent; expected to be 2.5 percent in 2018
• Higher oil/gas prices in 2017/2018 shouldn’t deter consumer spending on boating in 2018
The Conference Board’s consumer confidence index, a key barometer for growth in the marine fabric market, averaged 120.4 in 2017, 20.5 points higher than in 2016. Growth is expected to continue into 2018 despite higher oil and gas prices.
Future challenges for the U.S. marine industry include attracting younger, more diverse audiences to boating. Thirty-two percent of first-time boaters in the U.S. are Hispanics—a strong emerging market.
An integral way to expand the U.S. marine market is to devise and implement ways to increase boat ownership among people who fish and participate in water sports. Another catalyst for market expansion: innovation, which plays a crucial role in the growth of marine businesses. Innovations reflect many of the changing consumer trends and expectations in the boating market.
Recent innovations in new boats include a Joystick for Inboard propulsion; it delivers a complete helm-to-prop solution for inboard applications that makes docking and driving a shaft boat effortless (shaft boats transmit power from an engine to a propeller). Other recent innovations include leading-edge boat designs for the fishing activist that incorporate customizable electronics, large livewells and in-floor fishboxes. The ongoing development of innovative boat designs is essential to attracting new boat owners as well as retaining current owners in the marine market over the long term.
The U.S./Canadian fabric graphics market grew in the low-to-mid single-digit range in 2017, and is projected to do so again in 2018.
TRENDS AND OPPORTUNITIES
In a November 2017 survey administered by IFAI, respondents reported that they think the U.S./Canadian fabric graphics market will be somewhat better in 2018 than it was in 2017. Key trends cited for driving opportunities (and threats to boosting sales) in 2018:
• Good economics in terms of low unemployment and good consumer spending (although some customers are unwilling to pay for quality).
• Single-digit sales growth over the next few years.
• More digital inkjet printers for fabric are being used, which helps to increase growth in latex print
and ink technology.
• Demand continues to increase for printing on wider width materials.
• The retail segment continues to expand the soft signage market—both indoor and outdoor signage. There are more sales of high-end point-of-purchase (POP) substrates.
• The trade show and exhibition market continues to realize double-digit growth.
• More black-backed materials are being used to eliminate liners.
• Printed materials are becoming more colorful and lasting longer.
• Customers continue to demand shorter lead times for their projects.
• The trade show and exhibition market continues to realize double-digit growth.
• Inexpensive imports from Asia—particularly China—remain a problem, taking sales from U.S. fabric graphics end product manufacturers and print shops.
U.S. GDP increased to 2.3 percent in 2017 and is expected to reach 2.4 percent growth in 2018. Consumer confidence increased significantly in 2017. Developments like these helped fuel growth close to the mid-single-digit range in the U.S./Canadian fabric structures market in 2017. A similar rate of growth in the fabric structures market is expected in 2018.
TRENDS AND OPPORTUNITIES
• The U.S./Canadian fabric structures market is projected by survey participants to be somewhat
better in 2018 than in 2017.
• We’re continuing to see robust demand for residential remodeling work (2014-2018).
• There was an uptick in demand in 2017 for temporary fabric structures used by emergency response teams in response to hurricanes in the southern United States and fires in California.
• More projects are occurring in infrastructure development such as stadiums and shade structures for schools, automotive dealerships and sporting events such as golf and tennis.
• There is a continuing increase in demand for engineered structures.
• The quality and performance of fabrics has improved. They are more colorful and more durable; coating applications are being applied to fabrics that give them value-added enhancements, such as making them waterproof, fire-resistant and even self-cleaning.
• Too many manufacturers make distorted claims about their fabrics—especially overseas firms.
• Strict, hard to interpret U.S. building codes can increase the cost of business.
• The continuation of inexpensive imports of shade structures from Asia, especially China, hampers domestic sales efforts.
The U.S./Canadian tent rental market grew in the mid-single-digit range in 2017; similar growth is predicted for 2018.
TRENDS IN TENT RENTAL
• Better weather in spring and summer 2017 contributed to an increase in the number of events held in 2017—especially outdoor events for weddings and corporations.
• Increased demand for flooring and lighting helped increase revenues for event operators.
• Shorter lead times continued to be demanded by customers for their events.
• Sailcloth tents continue to be popular.
• Government regulations and permitting remain a challenge for event operators, who spend too much time obtaining the correct permits to remain in compliance with building codes.
2018 TENT RENTAL FORECAST
(From Special Events Magazine’s 2018 Event Planner Forecast)
• Eighty-three percent of independent event planners expect to stage the same number or a greater number of special events in 2018 (versus 2017).
• Ninety-two percent of in-house event planners expect to produce the same number or a greater number of special events in 2018 compared to 2017.
• Sixty-two percent of independent event professionals expect their revenues to increase in 2018.
Leading challenges facing independent event professionals in 2018:
• Shorter lead times (50 percent of respondents)
• Increased competition (46 percent)
• Reduced client budgets (44 percent)
• Labor shortage and lack of skilled labor (37 percent)
Steps independent event professionals plan to undertake to improve their businesses in 2018:
• Forming partnerships with other event professionals (58 percent)
• Trying to broaden their client base (57 percent)
• Marketing more aggressively—more social media (54 percent)
• Trying to focus their business on more profitable customers (51 percent)
TARPAULINS AND TRUCK COVERS
The U.S./Canadian tarpaulin and truck cover market grew in the mid-range single digits in 2017, and comparable or slightly higher growth is anticipated for 2018. In a survey of IFAI tarpaulin members and nonmembers in November 2017, respondents cited a number of trends and their impact on the U.S. market.
In the IFAI tarpaulin survey, respondents reported that they expect sales to be somewhat better in 2018 than they were in 2017. Market developments cited included:
• Growth in the U.S. transportation infrastructure construction market decreased 2.8 percent in 2017; it is expected to rebound slightly in 2018. Growth in the U.S. construction market overall was up 3.8 percent in 2017; residential construction growth was up 10.4 percent. This growth is expected to continue into 2018, driving an increase in demand for lumber, poly and mesh tarps.
• Tarpaulin and truck cover businesses continued to experience a shortage of skilled truck drivers in 2017;
this trend is expected to continue throughout 2018.
• Imports of tarpaulins and truck covers, especially from China and Korea, will remain an issue for U.S. tarpaulin and truck cover end product manufacturers.
• U.S. tarpaulin and truck cover manufacturers reported optimism that the 2018 market will experience solid growth due to the increase in volumes they’ve seen, sold and shipped in 2017.
ADVANCED TEXTILE PRODUCTS
(SAFETY AND PROTECTIVE MARKETS)
Growth in the U.S. advanced textile products market was up 6 percent in 2017, and is expected to increase another 6 percent in 2018. Growth was supported by an improved job market in 2017—with unemployment decreasing to 4.4 percent. The U.S. manufacturing sector has remained stable over the past five years. According to the December 2017 Manufacturing ISM Report on Business poll of U.S. supply executives, in terms of America’s manufacturing sector, the economy overall has grown for 103 consecutive months, achieving growth in the manufacturing sector in December 2017. Those figures indicate growth in U.S. manufacturing for the sixteenth straight month, led by strong expansion in new orders and production.
MARKET TRENDS IN 2017
• In the U.S. and Canada, there has been ongoing effort by manufacturers to ensure compliance with government safety regulations, such as OSHA- and ANSI-compliant clothing.
• Strong growth is occurring in the safety and protective markets in China and India. Growth in those markets is fueled by significant government investments in infrastructure and in key advanced markets such as military and automotive.
• There is increasing adoption of personal safety standards and guidelines in emerging markets, especially in China and India, as their workforces continue to become more organized—demanding better pay and worker rights.
• Smart fabrics are taking on a greater presence in the advanced textile products markets across
the world. That global growth rate has reached 18 percent per year, serving key market segments like transportation, military, consumer, industrial, medical, sports and fashion.
The U.S. military market covers safety and protective products (including the use of smart technology) for troops, firefighters and law enforcement. A driving force behind product development for the firefighter, law enforcement and industrial markets, the military’s influence on the safety and protective market will continue throughout 2018.
Spending by the Defense Logistics Agency (DLA) on U.S. military clothing and textiles has been held in check over the past five years. Key constraints on spending have included the gradual phase-down of U.S. troops in Afghanistan, from 33,500 thousand in April 2014 to approximately 15,000 in December of 2017, coupled with the DLA’s concern over sequestration caps on spending by the Pentagon in 2017.
Despite these constraints, growth did occur in 2017—with spending reaching $1.7 billion. Military clothing and textile spending by the DLA is expected to reach $1.7 billion again in 2018.
The U.S. and Canadian geosynthetics market includes geotextiles, geomembranes, geogrids, geosynthetic clay liners, drainage materials, geocells and erosion control materials. In 2017, the market grew in the low single-digit range, and is expected to increase slightly in 2018.
Due to the weaker U.S. dollar in 2017 and 2018, coupled with subdued growth in economies across the globe, U.S. geosynthetic manufacturers have been experiencing intense competition domestically as well as internationally. To better compete in this competitive environment, some U.S./Canadian geosynthetics market players have pursued merger and acquisition moves to place them in a better position to serve their customers.
Key geosynthetics market mergers and acquisitions in 2017:
• Montreal-based Solmax, a leader in polyethylene geomembranes, acquired GSE Environmental
(based in Houston, Texas) in December 2017.
• Winston-Salem, N.C.- based Hanes Geo
Components acquired Toronto-based Terrafix Geosynthetics in January 2017.
• South Dakota-based Raven Industries acquired a substantial portion of the assets of Colorado Lining International (headquartered in Parker, Colo.) in August 2017.
The overall U.S. and Canadian geosynthetics market is expected to see modest growth in 2018. Roadway and bridge construction will drive a good portion of this growth.
Although there have been significant increases in state and local revenues for transportation projects in a number of states in recent years, some of the revenue has been dedicated to debt reduction or has been delayed from reaching the transportation market due to state budget issues, which continue to cause a decline in funding on the U.S. transportation infrastructure market overall, hindering growth in 2017.
The upside for the U.S./Canadian geosynthetics market: anticipated growth in 2018 in applications such as air terminals and runways, public transit, railroads, street and parking lot construction, and bridges and tunnels.
The U.S. and Canadian narrow fabrics market increased in the low single-digit range in 2017, and is expected to grow at a slightly higher rate in 2018. In recent years, the main area of growth has been webbing for seat belts in the automotive market. Sales of new light vehicles in the U.S. decreased by 2 percent in 2017; but that still means sales of roughly 17.1 million vehicles.
Spending on military textiles and clothing in the U.S. military market was $1.7 billion in 2017 (see page 49), and the DLA expects spending to remain at $1.7 billion in 2018. The U.S. military is always looking for the most technologically advanced textiles available in the marketplace. The narrow fabrics market has been and will continue to be an important supplier of military camouflage webbings and safety products, as well as medical products for the military.
Other key markets in the U.S./Canadian narrow fabrics market include:
• Safety products (safety or fall control harnesses)
• Transportation and cargo (tie-downs and slings)
• Medical products (straps, orthopedic braces, gauze and bandages)
Narrow fabrics also play an important role in the growing e-textiles/smart fabrics market, providing straps that hold monitoring devices in place for athletes and patients to track vital signs such as heart and breathing rates. Other developments include technological advancements in composites, where the weight-to-strength ratio continues to increase usage in the automotive and aerospace markets.
The U.S. and Canadian industrial fabric equipment manufacturer market includes fabric equipment for a wide variety of purposes, including cutting, heat sealing and welding, labeling and marking, grommeting, pattern-making, sewing, slitting, printing, testing, and tables for cutting and sewing.
In a survey administered to IFAI equipment manufacturer members in November 2017, respondents indicated that they expect the U.S./Canadian industrial fabric equipment market will remain unchanged in 2018. (In terms of value, the market grew in the low single-digit range in 2017.)
Market developments cited by respondents for 2017 and 2018:
• More equipment companies are reshoring their operations from overseas back to the United States.
• The U.S. industrial fabric equipment market has become more competitive in recent years. Imports of equipment, especially from Europe and China, seem to be increasing and will remain an issue for equipment manufacturers in the near future.
• Growth in the market has slowed in the past few years. Customers seem to be more indecisive in making purchasing decisions for equipment—they are willing to wait longer before making a final decision.
• Many equipment markets served by IFAI appear to be well established and vary widely, but sometimes lack depth. There is a challenge for many equipment manufacturers in finding the right platform to interact with potential customers from the awning and canvas markets, automotive and aircraft interiors market and industrial insulation manufacturing market. On balance, the equipment market is growing, but growth is spread across several narrow vertical market segments, a real challenge for equipment manufacturers.
The U.S. and the rest of the world continue to struggle, operating in what’s been a tepid and somewhat uneven economic environment over the past 10 years (although growth in 2017 was significantly better than in 2016). Overall, the weak global economy has made kindling the expansion of the specialty fabrics industry challenging for market participants to overcome—especially when considering that the sluggish growth in worldwide GDP is likely to last another five years.
Most of the players in the specialty fabrics industry are keenly aware of the economic impediments to achieving their sales and profitability goals each year. These manufacturers work tirelessly and commit substantial time and resources to ensure continued growth and better positioning to compete for and stay relevant to new and existing customers.
A business climate centered on an unending pursuit of innovation is critical. Innovation exists in every phase of any business—technologies, markets served, products, processes and services created and delivered to increasingly demanding customers. Using innovative products and processes to deliver innovative products and processes to customers, building credibility and strong market relationships, are the most important tools for business growth, driving industry expansion over the long run.
Some examples of ongoing innovations include working with architects, designers and builders to develop new looks and styles or designs for awnings; actively promoting the benefits of shade products with built-in UV protection to protect people (especially school children) from skin cancer; and developing and using multifunctional fabrics that provide water repellency, flame resistance, durability and sustainability, yet still offer eye-popping aesthetics and graphics for a personal (and promotional) touch.
Specialty fabrics companies that keep innovation in every aspect of their businesses are building iconic brands that live.
*The 2018 comprehensive state of the industry report can be found here.