Optimism Remains High as Industry Growth Continues

Nearly 60 percent of architectural woodworking and store fixture manufacturers surveyed by Wood & Wood Products expect to do more business in 2000.

By John Koski

 

After enjoying a prosperous 1999, the largest manufacturers of architectural woodworking products and store fixtures have even greater expectations for 2000, according to Wood & Wood Products' 13th Annual Survey of Architectural Woodworking & Store Fixture Manufacturers.

 

Hollywood Woodwork did this lobby for the University of Miami's School of Business.

Sixty-four percent of the executives surveyed said 1999 was either "very good" (52%) or their company's "best year ever" (12%). Only 6% said business had been "poor" and none of those surveyed said business had been "terrible."

Despite North America's robust economy, it is interesting to note that 74% of the executives surveyed last year said business in 1998 had been very good or the best ever -- a number that is 10% higher than this year's survey.

Optimism, however, remains strong. In looking ahead to this year, 59% said they have "greater" expectations for 2000, while 37% indicated they expect business to remain the "same." In last year's survey, those numbers were 57.5% and 32.5%, respectively.

Another optimistic indicator is that only 4% of survey respondents have lower expectations for 2000, compared to 10% last year who said they had lower expectations for 1999.

Survey Highlights

Individual companies that performed well in 1999 were led by Vira Mfg. Inc., whose reported sales increased 29.4% over 1998's sales, allowing them to move into W&WP's top 10.

Meyer & Lundahl increased 1999 sales over 1998 sales by 17.6%, Rimi Woodcraft reported an increase of 17.4%, Hird/Blaker Inc's. sales went up 12.3%, and T.J. Hale Co. reported a sales increase of 11.4%.

Six firms reported that 100% of their business was in store fixtures, four firms said they worked exclusively in architectural woodwork, and16 firms indicated they worked in both areas.

The top three firms reported that 100% of their sales came from the retail sector. Two other firms in the Top 25 had a similar response. The only other firm that reported doing 100% of its work in just one sector was Valley City Mfg. Co. Ltd., which said all of its sales came from institutional work. The remaining firms all said they worked in one or more areas.

Only one firm, Environments Inc., reported all of its sales as coming from new work. All of the remaining firms reported sales revenues from both new and renovation work.

Top Concerns

When asked to indicate their top concern from a list of nine industry issues (see chart), 32% of respondents listed recruitment and retention of productive woodworkers as the top challenge. Twenty-nine percent listed profit margins. Finishing third, at 13%, was concerns about the economy.

Jay Hogfeldt, president of Wind Mill Woodworking Inc.of Sheboygan Falls, WI, addressed the worker shortage issue in the comments section of the survey. "We leave no stone unturned in recruitment of employees," Hogfeldt said. "This includes "sending letters to former 'good' employees asking if they wish to return to work for us, and holding our own job fair (complete with bratwurst) to help recruit shop employees."

Jeff Pray, president of Professional Installation Network of Irving, TX, also has difficulty finding skilled workers. "Since experienced workers are so hard to recruit in this market," he said, "we have been forced to constantly look at ways to increase our productivity per man hour. This has been accomplished with extensive training, as well as the addition of machinery to take away some of the dependence on skilled labor."

In addressing profit margins, David Stackhouse, vice president of Millrock Inc. of Sanford, ME, said his company is empowering middle management to manage for profitability, improving job cost accounting, strategically choosing customers and products, and streamlining the process flow.

 

In order to prosper in the competitive store fixture market, manufacturers are constantly looking to add innovative product lines. T.J. Hale's Versaflex allows users to store extra shelves and accessories in the unit itself.

In commenting on the economy, Peter Mielach, president of Mielach Woodwork, of Edison, NJ, said, "The market is on its longest and greatest expansion in history. My greatest concern is the day the bubble bursts. When it bursts, I feel the market will drop drastically, since a large portion of the expansion is based on non-profitable, highly traded technology companies. We have already consolidated all operations to one facility in New Jersey, and are concentrating our efforts on the quality of our work, not the quantity. Our plans for 2000 are to prepare for the worst. If it happens we will survive; if it doesn't, we will prosper."

Addressing the Challenges

When asked how how their company is addressing its biggest challenge or concern, industry executives had some enlightening answers.

"Our biggest challenge is diversification of our customer base," said James Hoover, president of Commercial Store Fixture & Construction Corp of Grand Rapids, MI. "Consolidation in the retail industry continues to shrink the customer base and concentrate sales with fewer, larger manufacturers. Diversification to other areas of wood manufacturing is essential for long-term survival and growth."

"We have developed a retention program within our company," said Phil DeLeers, president of DeLeers Millwork Inc. of Green Bay, WI. "This has helped us maintain our workforce with little turnover." DeLeers' company has also developed a training program and benchmarked its products and services. "This will help us grow without needing to add a lot of people, and will also help our profit margins."

John Iwanski and Barrett Kilmer contributed to this report.

 

Where Will Tomorrow's Woodworkers Come From?

In looking at the results of this year's survey of architectural woodworking and store fixture manufacturing industries, the most important concern among respondents was "recruitment and retention of productive woodworkers." Fully 64% stated that they were very or extremely concerned over this issue.

That result came as no surprise.

Finding and keeping quality workers has become a growing problem, not only in the woodworking industry but other industries as well. The solution, however, is not to throw up our hands and proclaim, "Oh, well, that's the way it is -- I guess we'll just have to live with it." Far from it.

A number of organizations have already stepped forward to find ways to attract new people to the woodworking industry and then train them for long and satisfying careers. Here is information about two of those efforts.



Partners in Progress

The American Woodwork Institute established its Partners in Progress program to assist its members by

improving the "image" of the woodworking industry for students entering the workforce from high school, vocational school and college. The program is designed to show students the benefits of a career in woodworking. Its objectives include:

  • Increasing the number of skilled workers available to member woodworking firms.
  • Helping local AWI chapters or individual firms partner with high schools and vocational schools to create awareness of the woodworking industry and the growing need for skilled workers.
  • Equipping AWI chapters and firms with materials and information to assess current high school woodworking programs and facilities and to show the wood industry's support for their program by offering assistance to instructors in upgrading their curriculum to reflect current methods, materials and machinery.

To achieve these goals, AWI's Partners in Progress has produced a professional-quality videotape, posters, brochures and educational kits for both schools and students. For more information about the program, contact AWI at (703) 733-0600 or fax (703) 733-0584.



WoodLINKS

Over the past few years, secondary and post-secondary educators have worked together with wood industry representatives to develop an effective wood products manufacturing education program beginning in grade 11.

One of the outcomes of this work has been the creation of a non-profit organization called WoodLINKS, originally begun in British Columbia in 1996. The program has 27 sites in Canada and more than 250 certificates have been issued to students, 80 percent of whom went straight into industry jobs after high school.

The Wood Products curriculum looks at the skills, knowledge and attitude that students need to be successful woodworkers. To be successful students must have a general understanding of the wood industry and knowledge of current practices as well as being good communicators and problem solvers.

Through team work projects, they learn the crucial importance of leadership, sharing, independence and interdependence. By emphasizing on-site experiences in wood products manufacturing, students gain valuable insights into the woodworking industry.

For more information about WoodLINKS, phone (604) 822-1693, e-mail info@woodlinks.com, or visit the Web site www.woodlinks.com.

WoodLINKS-USA is based on the successful Canadian WoodLINKS program. In the United States, pilot programs are under way in several states, including Michigan, California, Pennsylvania and Wisconsin.

For more information about WoodLINKS-USA, phone Jerry Finch at (920) 735-5370 or Franklin Brown at (610) 971-4850.

-- John Koski

 

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