Window and door industry heading toward recovery in 2012

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An improving residential market was one of the hopeful signs noted by AAMA Summer Conference keynote speaker Michael Collins, with single-family starts and existing home sales on the rise.

Keynote speaker Michael Collins discussed the current and future state of the fenestration industry during the American Architectural Manufacturers Association (AAMA) 2012 Summer Conference in Oak Brook, Ill.

"A lot of companies I talk to are telling me they are up 15 to 20 percent, and I expect that [percent] to be higher in the next few years," said Collins, managing director of the Building Products Group of Jordan, Knauff & Company.

According to Collins, fenestration industry plant expansions were closely balanced by plant closures during the same period. Industry bankruptcies and business closures dropped substantially in 2008 through 2010, although they inched up again in 2011. Collins considers it a positive sign that many companies are being purchased out of bankruptcy rather than being liquidated.

In regards to the residential market, the National Association of Home Builders/First American Improving Markets Index notes that single-family home starts are recovering from a low base and existing home sales are improving. "Home affordability is extremely high," Collins said. He added that those with a household income at or above the median income level have the ability to purchase "76 percent of homes within their market."

The commercial market is also seeing positive trends in the form of power and energy construction, as well as strong forecasts for building in the manufacturing sector.

Despite these positive trends, Collins noted the constraints on both the residential and commercial markets. "[Future] homeowners still have difficulty obtaining mortgages," Collins said, which causes "an excess of homes for sale." In regards to the commercial market, many new construction projects that have been approved are being delayed due to lack of financing available to developers.

Still, Collins is optimistic about the state of the fenestration industry. "We made it through the storm," Collins said. "It's now time to harvest the benefits of surviving a really tough downturn."

Collins has 18 years of experience in investments, with nearly 10 years at Jordan, Knauff & Company where he leads the firm's efforts in raising capital and mergers and acquisitions advisory for window and door companies.