Most leaders in the woodworking industry are cautiously optimistic for growth in 2013, although some are more enthusiastic than others. And many point to trends in the new year relating to technology, labor saving, and outsourcing.
We asked a cross-section of industry leaders representing much of the industry to take a look into their crystal balls and make some predictions for the year ahead. In no particular order, here’s what they said.
“Slow and steady”
John Murphy, founder of KCD Software, says from what he has seen of his own sales and what his customers tell him that 2013 will be a year of steady improvement in the industry. “I could tell you from what we’ve seen over the last period, it’s slow and steady improvement in our customers,” he says. “I’m not concerned about immediate future. We’re seeing that over all the country. We are not going to see the economy come roaring back, but it is improving at a smooth and steady pace.”
Murphy describes the current position of the industry as “at the bottom of an uphill slope.” He recommends that companies wanting to be ready for better times consider investments now. “This is the time to buy,” he says, noting that machine costs have come down. Murphy says he sees the most action in the smaller to midrange shops of four to six employees, noting that larger shops have mostly already gone to automation.
“People designing with a pad and pencil are pretty much going away,” Murphy says.
Steve Waltman of Stiles Machinery Inc. is decidedly bullish about the prospects for the woodworking industry in the year ahead.
“We are quite optimistic about 2013,” he says. “We believe companies are returning to optimistic. We believe there is an element of the industry that is enthused and investing in people, infrastructure, and equipment.”
Waltman sees several trends. “People are very active in areas of labor saving,” he says. “That means more value for the employer. People don’t want to lay people off. They want to grow. But they look to use technology to bridge the gap.”
He notes that, as the economy improves and leads to more hiring, companies that have invested in technology will have an edge. “Technology means a better place to work, better for recruiting, and it’s better for retention,” he says.
Another area of growth he sees for Stiles and the industry as a whole is in material handling. “You want to eliminate heavy no-value labor,” he says. “That leads to a more high-value employee.” He noted the positive reception for innovative material handling solutions that were demonstrated at IWF in Atlanta. “Atlanta was a nice shot in the arm for the industry.”
But Waltman also cautions the industry that there is a lot of catch-up to do. “People here (in the U.S.) put their business on hold, but the rest of the world continued to invest.”
“Improving, but not by leaps and bounds”
Christian Smedberg, marketing director for Osborne Wood Products, looks for steady improvement in 2013. “The overall trend is to continue to improve this year, but not by great leaps and bounds,” he says. Smedberg still has concerns about the housing industry. “I’m still not hearing a lot from builders,” he says. “We lost a lot of builders out of our customer base (during the recession) and we haven’t seen those people come back yet. But as far as cabinet and furniture, we saw some gains last year and expect to see some gains this year.”
The biggest trend he sees is people continuing to watch their bottom line, but he thinks some of the cost savings shops are doing is actually no cost savings and might even be counter-productive. He points to shops that make poor outsourcing choices as an example. “When times are tough, some shops say it’s time to bring everything in house. But why? The equation hasn’t changed,” he says. He points to outsourcing as a potential way for shops to add value to projects, such as adding carvings and corbels. “It’s a profit making piece,” he says.
One trend he sees is an influx of custom-requested products. “We do a huge amount of custom products,” he says, explaining how years ago the Osborne product line was only about 60 products, and now it is somewhere between 800 and 900 products.
Smedberg also sees a continuing trend in trying to serve the aging-in-place movement. He thinks shops can benefit by offering designs that allow people to stay in their homes as they get older without having to do major modifications. This includes designs that avoid tall reaches and offer better lower access, such as pull-out doors.
"I’m pretty optimistic”
Todd Herzog at Accu-router was one of the most positive people we talked about for prospects in 2013. He pointed to the economic report that was delivered at this year’s Woodworking Industry Conference. “The WMMA has a very good economist, and he is bullish on 2013,” Herzog says. “He sees a soft slowdown in ‘14, and then three big years in ’15, ’16, and ’17. I’m also looking for housing to see an improvement. Bottom line: I’m pretty optimistic. “There’s a rejuvenation of manufacturing in this country, which certainly will help the wood patch.”
Like others who responded to this survey, Herzog points to a growing trend of people wanting to reduce labor costs and looking to CNC technology to do so. He sees more interest in his company’s efforts at remanufacturing older CNC routers to provide a cost-effective way for manufacturers to get into the latest technology.
“Things definitely looking up”
Jason Howell, president of Weinig Group, points to positive signs in the housing sector. “Housing is looking better, and that’s the primary factor,” he says. Howell also sees good things in being done with the election. “Having the election behind us is a big thing,” he says. Howell looks for the millwork industry to come back at the same pace as the housing market.
He urges woodworking manufacturers to not just rely on an improving economy, but also to make improvements in their plants. “Customers should look internally and exploit lean manufacturing opportunities,” he says.
A major trend he sees is manufacturing integration. “The difference today is equipment is coming from commonly owned factories. That makes the manufacturing process streamlined,” he says. “Integration is impossible with disparate factories.”
Another big source of optimism for Howell comes from his customers’ resilience. “Our customers who made it through the crisis are the survivors,” he says.
Tracy Yarborough, owner of Maple River Woodworks in Coward, S.C., and the new president of the Cabinet Makers Association, says his personal thoughts about the economy are tempered by what he hears from CMA members. “Personally, I think it’s flat, but I’m reading a lot of articles from economists that housing is on the move a little bit. In the CMA, everybody’s busy right now.”
Yarborough thinks a lot of people have been sitting on money and he wonders how long they can wait to do a building project. “Work is coming in, but the backlog is not like it used to be,” he says.
He sees an ongoing trend to simpler cabinets as people cut back on details to save money. He’s doing more stain work than painted in his area. He also sees more shops taking advantage of outsourcing opportunities. “They are able to put an exact figure on the costs,” he explains. “They can do other things while they are waiting (for outsourced components).”
“Trending up for 2013”
David Talbot of Eurosoft describes his position on the new year as cautiously optimistic. “I see it trending up for 2013,” he says. “I see more encouraging signs.” One area of growth he sees is larger companies buying smaller companies and reorganizing them, especially with improved technology.
And that technology is constantly changing. “Software is evolving at a very fast pace,” he says. He sees software increasingly responding to group-wide and strategic needs in larger companies. “Previously, the engineer was running software at an individual plant, now it’s at a central server and it’s used group-wide,” he says, noting how this ties in with the trend to cloud computing in larger operations.
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