With housing starts down in double digits for 2008, the window industry could hardly expect to be booming. And guess what? It's not.The recently released "2008/2009 AAMA/WDMA U.S. National Statistical Review and Forecast," a numbingly thorough examination of the door, window, and skylight industry's trends and prospects, found little to celebrate.

Housing starts are down — 40% in 2008 alone — and the plunge in new-home construction has taken windows with it. Consider: In 2005, the peak year for window products in the U.S., manufacturers shipped 70.5 million units. Of those, 34.1 million went to new construction, 36.4 to remodeling and replacement. The study, conducted for the American Architectural Manufacturers Association (AAMA) and the Window and Door Manufacturers Association (WDMA) by Ducker Worldwide, found that by 2008, window shipments had dropped to 48.4 million units.

The AAMA/WDMA study projected a further drop in window shipments to 36.8 million units this year. Roughly speaking, in four years the number of windows sold in the U.S. has dropped by half.

New Construction Fallout

New construction accounted for the greatest portion of that loss. The AAMA/WDMA Ducker study projects that new construction will absorb some 10.5 million window units this year, as compared with 34.1 million in 2005 — a drop of more than two-thirds. Compared with new construction, windows made for the remodeling and replacement market declined roughly 28% in the same period, from 36.4 million units in 2005 to a projected 26.3 million units shipped this year.

The decline has been ongoing: Ducker's study showed an 11.8% drop in remodeling and replacement segment windows shipped from 2007 to 2008. The report put the total combined market decline - new construction and remodeling - for 2008 over 2007 at 18%.

Trends within product types also indicated the effects of the housing slump and economic slowdown:

• Aluminum windows took the biggest hit, according to the AAMA/WDMA report, seeing a 26.6% decline in shipments in 2008 over 2007. Shipments of wood windows declined by 21.4% and vinyl windows by 17%.
• Shipments of fiberglass windows grew 6.2%, reflecting the increased availability and consumer awareness of these products. The study projects that by 2012 the market share for fiberglass windows will grow 84% over 2008.
• Windows in the "other" category, including composites, also saw growth, of 3.4%.
• Skylights posted a sharp drop in shipments — 22% in 2008 over 2007 — and the study expects that drop to continue, with a 28.6% decline in shipments for 2009. Blame it on new housing, or the lack thereof, the report suggests: "As builders looked for new ways to cut costs, discretionary products like skylights saw a more significant drop than entry doors and windows."
• Storm door shipments declined by 18.7%, and the report projects a further decline of 25.5% this year. What's behind it? Not only fewer new homes but increasingly energy-efficient entry doors that make storm doors unnecessary.
• Fiberglass entry doors continue to take market share, though they have a long way to go before displacing steel doors, the market leader, with a 60% share in 2008.

Bottoming Out in 2009

While the report charts an extended contraction in window and door shipments, it also projects that the market will bottom out in 2009, then resume growing. After this year, the report's authors say, the market will "show marked improvement from 2010 to 2012." For instance, sales of windows to the remodeling and replacement segment are expected to grow from 26.3 million units shipped this year to 28.6 million units in 2010 and 35 million units in 2012. That would put manufacturers of those products roughly back where they were in 2004, when 35.7 million windows were shipped to the remodeling and replacement market.

Many in the industry, both manufacturers and installing contractors, have seen an uptick in sales due to tax credits included in the American Recovery and Reinvestment Act (ARRA) signed into law in February. But according to the AAMA, whatever impact the stimulus has had on window sales has been offset by "the growing volume of foreclosures" and other larger trends.

"Replacement windows may receive the most direct boost in the short term," AAMA president and CEO Rich Walker says, about the ARRA tax credits. But he points out that it was difficult to measure the effect of the stimulus legislation on window sales, "due to the unprecedented macroeconomic environment."

-Jim Cory, editor, REPLACEMENT CONTRACTOR.