Even though housing starts were negatively impacted by unusually cold and wet weather in the South and West during the first two months of 2004, the NAHB's outlook for the year is still very positive. The Department of Commerce's seasonally adjusted rate for single-family new construction starts in 2004 was 1.489 million in February, a 4.1 percent decrease from January, but still a 13.5 percent increase over the same month last year. Overall housing starts in February dipped to an annual rate of 1.855 million, 4 percent lower than January, but 13.1 percent above the pace of February 2003. At press time, NAHB chief economist David Seiders reported in an official statement that "housing starts for 2004 could equal or surpass the excellent performance of 2003 if interest rates are well-behaved as this year progresses."

According to the results of the 2004 Annual Survey of Leading Construction Suppliers (based on responses from 96 PROSALES 100 companies), many of the nation's top 100 dealers also are betting that the market will remain strong and are anticipating expansions on the heels of brisk activity in acquiring and opening facilities in 2003. Looking at the PROSALES 100 as a group, 22 of the companies on the list acquired a total of 104 facilities in 2003, and in 2004 one-quarter of the PROSALES 100 collectively anticipate acquiring 111 facilities. Similarly, 29 firms accounted for the opening of 81 new facilities in 2003, and 33 dealers in the group plan to open an additional 115 locations this year. On the flip side, 15 PROSALES 100 dealers closed a total of 42 facilities in 2003, and only five are planning to close a collective six facilities in 2004.

Standouts in the rankings this year include Costa Mesa, Calif.–based White Cap Industries (No. 11), which purchased 20 facilities last year and plans to continue its pace of acquisition this year, as well as Shelter Distribution (No. 22), a McKinney, Texas–based specialty distributor that acquired 23 locations in 2003. Lanoga Corp. (No. 5) has been very active, too. The Redmond, Wash.–based company acquired 14 facilities in 2003 and plans to continue on the path in 2004, as well as open one new facility. The Strober Organization (No. 12) is already on the fast-track with 2004 acquisitions, finalizing an agreement on Jan. 30 to acquire 26 Lowe's Contractor Yards, expanding the company's geographic reach into six additional Southeastern states.

No doubt, the scale is tipped toward branching out rather than downsizing in 2004, and "expansion" was one of the most frequently cited goals by the PROSALES 100 in this year's survey. Whether it is acquiring businesses, increasing market penetration and reach, or diversifying divisions/product lines, PROSALES 100 dealers definitely are on the move.

When it comes to customer bases, custom home builders and production home builders are still the top focus of the PROSALES 100, representing 37 percent and 27 percent of their overall sales in 2003, respectively. This breakdown has changed little over the past decade, but many companies are anticipating some business shifts going forward.

When asked whether they believed the types of customers they served would remain constant over the next five years, 39 percent of the PROSALES 100 predicted changes, with sales growth in the remodeling and production builder markets cited most often as likely developments.

Considering the BUILDER 100 now account for 34 percent of the U.S. housing market, the prediction meshes with nationwide trends. Moreover, the remodeling market has been booming; according to the Harvard Joint Center for Housing Studies, spending on remodeling/home improvements jumped from $236.1 billion in 2002 to $256.3 billion in 2003—an 8.6 percent increase.

2003 Facility Transactions of the PROSALES 100
2003 Facility Transactions of the PROSALES 100

Anticipated 2004 Facility Transactions of the PROSALES 100
Anticipated 2004 Facility Transactions of the PROSALES 100

Average Customer Base of the PROSALES 100 by Market Segment
Average Customer Base of the PROSALES 100 by Market Segment