Sales were definitely good across the board in 2003, and perhaps the industry sector feeling the greatest positive impact from the trend is the small- to middle-market pro dealer. With savvy purchasing, service flexibility, and a solid financial economy to grow both organically and by light, one- to two-unit acquisitions, companies in this range are beginning to show an emerging strength, including adaptability in the installed and manufacturing end of the markets. According to Sam Dunn, chair elect of the National Lumber and Building Material Dealers Association (NLBMDA) and president of seven-unit Dunn Lumber in Daytona, Fla., members of the association, which has a high percentage of middle-market dealers, posted significant gains in sales and scale in 2003. Dunn also echoes the expectations of most respondents to the PROSALES 100, indicating that he anticipates slightly more moderate but still solid growth among NLBMDA pro dealer-members in 2004, with sales increases between 5 and 15 percent handily achievable despite some tempering by a decrease in price inflation. Here's Dunn's take on the successes of 2003 and what the future holds:

The primary drivers behind the phenomenal growth in the 2003 pro sales economy: "One, you have to realize that part of that growth is in the inflation of price. Even if you were doing the same amount of business in sticks in 2003, the price is higher, and some of the growth comes from that. Interest rates were also a key driver, and as long as they remain low the opportunity for people to invest in housing is still there. ... Right now there seems to be solid growth and most of us are looking for the future to be good. In many respects, if you're not doing well now, then there's something else that may be a problem."

The emerging market strength among small to middle-market independent dealers: "I believe you are going to continue to see solid growth in the mid-size lumberyards. As communities grow together, you see the opportunities for what used to be single-yard operations that, because of the dramatic community growth, suddenly there is the opportunity for another yard to be opened. [Middle-market independent dealers] are stable financially and have the technology and the systems now to do that. As we all get our feet under us, we see those opportunities and desires to expand, probably most of us in a conservative nature, but there are others that will plunge right ahead. It's a very dynamic industry [in that sense] that is going to continue to change."

The future impact of production builders on the independent pro dealer customer base: "That varies widely throughout the country. There are dealers in certain markets that have very little contact with the national tract builder while there are other areas where that is the predominant customer market that they have. ... When you consider the volume of dollars, they are growing dramatically, but there are still a large number of independent builders and custom builders in this country, and I think there will always be a demand for that—it is a very good market that most dealers prefer."

The increasing interest in manufacturing and installed sales as part of a value-added business model: "I think you are finding all of us across the country changing our philosophy as the contractor business and the home builders are changing the way they do things. ... They are looking for partners from subcontractors and in many cases the supply chain to do the work. We all have to look at that as an opportunity. ... Only liability and regulatory aspects could possibly dampen the potential we have there, but I can conceive that we will continue to have more complex businesses beyond the buy it, sell it, deliver it business [models]."