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2010 State of the Metal Architecture Industry


Author: Brendan O’Neill
Date: 1/1/2010
URL: www.metalroofing.com


The down economy in 2009 obviously affected the metal construction industry. What adjustments/strategies have builders, contractors and suppliers made to weather the storm?

Jim Tuschall: We are having a good year, however there is less new bidding taking place. The adjustments we made are 1) bidding new types of work we would normally pass on, 2) lowered our mark up, 3) shop material prices to get the best deal and 4) more face-to-face contact with customers to strengthen relationships.

Bill Hippard: Residential metal roofing has been a bright spot on an otherwise down metal industry. Our Metal Roofing Alliance member manufacturers are reporting that 2009 sales were steady, and in some cases, above 2008 figures. In fact, the MRA’s consistent national marketing program is one of the few that is actually creating demand for steel. We attribute metal roofing’s steady performance to several factors, including the energy saving and environmental benefits of metal, as well as the trend for consumers to invest in their homes rather than move. A new roof is a need, not a want—a homeowner can wait to update a kitchen, but they can’t put off replacing a damaged or leaking roof.


Chuck Haslebacher: Strategy adjustments are relevant for the entire industry, not just for architects. Public sector work opportunities are the key—military construction, buildings funded by federal and state governments, school construction, health care, fire stations, and public power and utility buildings. Many architectural firms are shifting their focus to the public market in order to keep their businesses viable and respond to a difficult building marketplace. We believe that health care-related buildings offer a particularly vibrant opportunity for architectural firms. For metal building systems structures, this includes health clinics, outpatient facilities and office buildings.

Mark Roddy: We have not made this adjustment, but what has helped our firm is the fact that we are diverse in practice with attention to different market sectors like government, higher education, health care and science/technology.

Kermit Baker: For architects, there’s not a lot they can do in terms of short term successful strategies. Architects think about diversifying. Most of them serve a single market; fairly narrow set of facility types—they do offices or schools, etc. Diversification is something that can help out, but it’s not the answer. When you’re in the midst of a downturn, that’s not when you have the ability to suddenly shift directions and move into a whole new area.

What architecture firms can do is monitor things closely. That’s what happened in the early ‘90s—architecture firms didn’t follow the economy and didn’t know things were that dire until it was too late. Now, I’ve seen much more sophistication in getting ahead of the curve [economically]. They manage their businesses better and the repercussions will be less serious this time.


Strategically, do you expect 2010 to be similar to 2009 or different? And in what ways?

Tuschall: Less work equals more competition. We are used to four to five bidders on any single job. Now we are seeing 10 to 14. More installers are traveling to chase work.

Todd E. Miller: I think we need to continue to hone in on selling the long-term value of metal roofing. Many homeowners are realizing they will be staying in their current house for the long term. As a result, they are more willing to make long-term investments to make that home more beautiful, valuable, comfortable, worry-free and efficient.

Haslebacher: At MBMA, we are expecting the market to get worse before it gets better. We see 2010 continuing to be a very challenging year for our industry. The primary opportunities will be in public construction. We hope that the Obama administration puts more attention on infrastructure growth because this will tend to help the construction market overall. We see lending and financial institutions loosening up on loans and that is a good sign; but that activity needs to expand to give confidence to small businesses and to provide revolving loans for construction growth. Uncertainty keeps business on the sideline.

In addition, there is a huge inventory of vacant or under-utilized buildings in the commercial market, so no appreciable growth is expected there. We hope the building market will move step by step back to equilibrium and we expect small growth increments.

While 70 percent of our economy depends on consumer spending, the consumer activity will continue to be weak in 2010. Non-residential construction will lag the overall economy by 12 to 18 months, so we have challenging days ahead. The exception is in the area of public funding for construction; it will build the basis for our industry to pull out of deep decline.


How has the increasing “globalization” of this and other industries affected metal construction in North America?

Tuschall: I see a lot more European metal products available.

Haslebacher: The value of the dollar is helping to drive exports. If the dollar stays at a reasonable level, manufacturers will export more which will increase their capacity utilization. The steel industry is a totally global market and a key supplier to the metal building industry. What’s going on in China and India has a significant impact on the cost of steel domestically, because iron ore and scrap are set on world market rates, so the U.S. steel industry is impacted by world market fluctuations.

Baker: It used to be that international work was an effective diversification strategy. You could bridge through the economic cycles. This time around, the U.S. heads into a recession and the rest of the world follows in minutes afterward, almost. There’s almost no place to hide anymore.

When this economy comes back, we’re likely to see more companies sending their design work offshore as anyone can be working on any job from anywhere. As the amount of work increases, you’ll see the impact of globalization increase. Working in different time zones can allow for, essentially, an around-the-clock design team.

Who spurs the innovations in metal construction—the architects, the building owners, the builders/contractors, the product suppliers, or does it come from somewhere else? And why?

Tuschall: The architects’ software allows much more creativity with design ideas.

Miller: In our case, it is the suppliers who are always pushing to offer products which provide greater benefit and value to the consumers. There is more visionary expertise there than in our other publics.

Haslebacher: All of them spur innovation. Energy, sustainability, building owners’ desire to embrace technology—each of these factors influence metal building system design. To address these innovations, product suppliers develop new products. Building contractors expand their technical skills to accommodate and streamline change. Communication between all parties spurs further innovation. Collaboration helps make metal building system construction faster, more effective and more agile in meeting the needs of the changing market.

Innovations also evolve through education and advancements in the state-of-the-art. Design guides are particularly valuable in building technical expertise and helping architects understand how to benefit most from metal building systems. MBMA will produce a new energy design guide in January 2010, and a new fire resistant design guide within the first half of 2010. We also expect that a new tapered member design guide will be published in 2010. These will help architects and engineers do an even better job.

Roddy: The architects. We are looking for the most cost effective solutions demanded by the marketplace and our clients. Metal products offer lots of opportunities for creative adaptation within product lines while still remaining cost effective.


Is “green” a lasting trend or a passing fad? Why?

Tuschall: I think it is a false trend that will be around for a while. Everyone seems to pad all aspects to comply.

Hippard: For more than a decade, the Metal Roofing Alliance has successfully promoted residential metal roofing to consumers and contractors, and we’ve created a market that never existed. We’ve educated both audiences about the benefits of residential metal roofing, including their environmental benefits.

With rising energy costs, and an ever-dwindling supply of fossil fuels, there will be an ongoing need for sustainable building products such as metal roofs. Now that consumers are aware of choices such as metal roofing that can save money, add value to their home and are Earth-friendly, I don’t believe they’ll be willing to accept lesser quality products in the future.

Haslebacher: Green thinking is here to stay. The primary motivator is the Department of Energy’s commitment to reduce energy consumption by 30 percent. In addition, ASHRAE is working on 189.1, which is a proposed standard for the Design of Higher-Performance Green Buildings. Further, the International Code Council is developing the International Green Construction Code, which will be a comprehensive new building reference. When you combine all these factors with rating systems through USGBC and Green Globes, and educational sources like Greenbuild, it confirms that green is firmly entrenched in the marketplace and is here to stay.

Roddy: Green is the realization of a responsible way of building. Once people begin to look at life cycle costs for buildings instead of first cost there is no going back. In the end, people will understand that “green” means saving money.

Is “green” more marketing tool or sound business strategy? Please explain.

Tuschall: Marketing, everyone will listen to the green trend because they feel they must.

Miller: Producing products that are long lasting and energy efficient makes sense in terms of providing property owners with what they are seeking.

Hippard: The green elements of metal roofing are inherent to the product—not a convenient add-on to entice buyers. All steel roofs contain a minimum of 25 percent recycled content, and many have a much higher percentage. And, at the end of its useful life, metal roofing is 100 percent recyclable—other roofing materials are routinely removed and disposed of by the ton in landfills. Metal roofing is an important part of the steel recycling process, providing both raw materials and a new use for scrap metal.

In addition to helping the environment, these same eco-friendly residential metal roofs can save homeowners money, beginning on the day they are installed. For example, a study conducted by Oak Ridge National Laboratory found that installation of a reflective metal roof can save homeowners up to forty percent in summer cooling costs.

The MRA thinks of metal in terms of ‘investment grade roofing.’ Metal roofing is a durable, energy and cost-efficient choice for today’s homeowners. Consumers understand the value of investing in a long-term solution. Any product that can protect both the environment and the homeowner’s wallet is well-positioned for ongoing growth.

Haslebacher: As an industry, we consider the evolution of green sustainable buildings as a sound business strategy. Maximizing material utilization and energy efficiency will be increasing trends in 2010. We need to communicate to owners and architects that metal building systems are excellent choices for meeting the needs that these trends embrace.

Roddy: It’s a sound business strategy if you believe in long-term money savings.

Baker: Green is much more than materials, it’s more fundamental in terms of how architects are site-ing the project, how they’re laying it out, some of the programming that they’re doing. I think there are a lot of aspects of green, and the problem is that it’s all in the eyes of the beholder. Because of that consumers are confused and skeptical of what this is all about, which has made it difficult. This is a long process of setting standards, goals and objectives, and getting the industry behind it.


Is greenwashing (a deceptive use of green marketing) a concern for the metal construction industry? What impact (if any) has greenwashing had on the industry already?

Tuschall: No, typically metal is recyclable and meets most green criteria.
Miller: I have not witnessed this. That said, current industry work being done on life cycle analysis will be very beneficial in terms of giving solid support to our claims.

Haslebacher: Yes. Anytime anyone misrepresents green values, it is a disservice to those trying to comply with current trends and standards. Green product certifications and verification programs are being developed, so we think there is a self-correcting element in the market that will help weed out deceptive green marketing practices.

Roddy: Many industry folk use green as a superficial marketing pitch. Until they can understand how a product can help a project from a cost benefit, it’s meaningless. It’s just green for green sake.

What are the roadblocks to increasing the amount of metal used in residential construction, and how can the metal construction industry overcome them?

Miller: The main roadblocks continue to be consumer and trade awareness. Continued emphasis on marketing, especially Internet marketing, seems to be the answer.

Hippard: The MRA has seen continuing increases in consumer demand, and a wide variety of products are available for residential metal roofing. The millions of visitors to our www.metalroofing.com site tell me that consumers are interested. MRA’s biggest challenge has been finding enough qualified contractors to install residential metal roofing. Our program generates thousands of leads each year, and we need to increase the national capacity to handle them.

MRA is aggressively recruiting new contractors to join the alliance, and offers multiple benefits to those who do. In addition to supplying leads, MRA supports its contractor members with a wide variety of online training tools and webinars. MRA manufacturers also offer low-cost or even free training for new contractors entering the field.

Haslebacher: Roadblocks in non-residential, commercial markets occur when communities put ordinances in place that prohibit metal walls on institutional, commercial and industrial buildings. We, as an industry, must educate architects that a building with metal walls along with conventional materials can be aesthetically appealing. Metal building systems can provide the foundational structure for very pleasing, durable, lasting and energy-efficient buildings. Architectural treatments are key to making beautiful buildings and metal building systems can help architects create better buildings.

Roddy: I’m not sure. I used a metal building for residential construction and saved thousands of dollars and came up with an award-winning project.

Will metal construction make its way more deeply into the residential market during the next 12 months?

Miller: I believe residential use of metal roofing will continue to increase. As homeowners come to realize they will stay in their existing home for the foreseeable future, they will seek out products that add beauty, value and efficiency to their home.

Hippard: The McGraw-Hill Construction and Analytics survey shows that metal roofing now comprises 11 percent of the residential re-roofing market, more than doubling in just 10 years. Without question, the MRA residential program has been a success, and all indicators point to continued growth in the re-roof market. In fact, MRA’s strong numbers are supported by a new report: The Remodeling Market in Transition, from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

The JCHS study states, “in today’s uncertain economic environment, owners are likely to focus remodeling spending on projects that improve energy efficiency of homes, generate cost savings and maintain structural integrity.” Metal roofing meets all three of these qualifications. The study found that homeowners are shifting from high-end discretionary improvements, such as kitchen and bath upgrades, to those that maintain the efficient functioning of their home, and also generate cost savings, such as a new metal roof.

Haslebacher: Renovation opportunities exist. Many existing institutional, commercial and residential buildings can be retrofitted with new roofs, whether sloped or flat. These roofs can last for 30-plus years and adding insulation can reduce energy costs.

What do you expect for the industry in 2010? Will the metal construction industry (and global economy) rebound from 2009, or stay stagnant? Why?

Tuschall: I believe a slow rebound will occur in 2010 as financing loosens. The industry is weeding itself out with some companies going out of this business. Companies that can weather this economic setback will remember this condition for a long time and build even a stronger foothold in the industry.

Baker: My sense is that we’re likely to see a turnaround in design activity in the first half of 2010, and probably much closer to the middle of the year than the beginning. If that timing is right, given the lag between design activity and construction activity, that wouldn’t lead to a construction upturn until well into 2011.

The strongest sector—the one seeing the least decline—is the institutional sector. I think that’s typical as it’s just not as volatile as the other areas. But things won’t really take off until it swings over into the commercial side—that’s what really generates growth during an upturn.
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