Supply Chain Connections

Oct 15 2009 9:27AM | Permalink | Email this | Comments (1) |
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By Glenn Singer

A few weeks ago I attended NAHB’s Fall Board of Directors’ meeting in Chicago. I was surprised in the number of attendees at this meeting because my observations of the Spring Board meeting were that it was not well attended.

Most of the builders with whom I talked with have cut back as much as they can and are holding on until the market turns. Most complained that it was extremely hard to get ADC loans. The other thing that most builders had in common was that they have down-sized their homes so they could provide a more affordable home.

When I talked with manufacturers I heard two basic themes, positive and negative. Let’s start with the negative camp first. These manufacturers said things like “We are holding on and weathering the storm”. Or, “I have never seen it so bad; we are in a survival mode.”

Now let’s look at the positive comments I heard from other manufacturers. These folks said “We have picked up market share this year” or “We are beating our profit forecasts so far this year”. These comments didn’t surprise me because the perfect time to gain market share from your competitors is when the market is down. This is so because while you are taking market share from your competitors they think their business is down due to the market conditions and they are just “weathering the storm”.

I wonder how many builders have gained market share in their respective markets during this down turn. I would appreciate any comments on this from any builders who read this article.