FDMC 300: Architectural woodwork and retail fixture firms share outlooks

A majority of companies in the FDMC 300 anticipate sales to stay steady or grow in 2024 and 2025. Photo: Mystic Scenic.

Despite ongoing labor economic issues, compounded by this being an election year, wood products manufacturers in the architectural woodwork and retail fixtures segments remain relatively optimistic for 2024.

Keeping in mind the variance in regions, the AWI’s Business Sentiment Index (BSI) shows current sentiment is 71%, up from 64% last year, said Doug Hague, CEO of the Architectural Woodwork Institute. A score over 50% indicates an improving environment. 
The index shows an average operating margin of 2.71%, up from 2.62%, with the average high-profit firm operating margin at 14.59%, up from 12.66%. Respondents also report 10.1 months of backlog, down from 10.7.

“Some people see it to be a slight decline or no growth, but I would say more than half, see the importance of investing in technology and equipment during this slower growth period,” Hague said. In fact, 53% said they plan to invest $100,000 or more in the next 6 months, up from 42%, while 57% of high-profit firms said they plan on investing $100,000 or more next year, up from 42%.

The Architecture Billings Index also reported modest easing in February, the most since July 2023, suggesting the recent slowdowns may be receding, noted the American Institute of Architects. The AIA/Deltek Architecture Billings Index (ABI) score was 49.5 for February, the most recent available at the time of publishing, with Design Contracts at 51.1, and Project Inquiries at 56.0. The ABI shows Work-on-the-Boards, with an index score above 50 indicating growth.

The retail fixtures industry is also showing improvement, highlighted by news of companies such as Chipotle’s, Potbellies, Love’s Travel Stops, Uniqlo, and JC Penney planning expansions, others announcing plans for remodels and reports highlighting the comeback of the mall in 2024.

“Companies across the Shop! Association membership base continue to have a cautiously optimistic outlook for the year, as they did in 2023,” said Murray Kasmenn, executive director of Shop! Association. “Overall, however, retail sales so far this year have been improving and companies are adapting to the challenges of doing business in 2024 by meeting customer pain points through increasingly frictionless in-store experiences. From small mom-and-pops to big box stores, retail theft, employee retention and supply chain logistics remain the top concerns for retailers across the board. Despite these challenges, more companies are seeing the benefit of brick-and-mortar stores and the irreplaceable value of face-to-face customer interaction.”

The news from Placer.ai on mall traffic is also positive. In a year-over-year comparison, Placer.ai’s Mall Index for March showed increased foot traffic across all formats for the second month in a row for all three shopping formats, with traffic to indoor malls, open-air shopping centers and outlet malls up 9.4%, 10.1%, and 10.7% respectively in 2024 compared to the year prior. The report, which analyzes data from 300 U.S. malls, also found fewer consumers are treating malls like a one-stop shop, with more time spent at more stores, during the visit.

The Mastercard SpendingPulse saw U.S. in-store sales rising 2.6% in March compared to a year ago. The top growth market was electronics, with overall sales increasing 8.7% in March compared to a year ago. However, home improvement, home furniture and furnishings continued to lag in YOY growth.

The National Retail Federation forecasts retail sales will increase in 2024 between 2.5% and 3.5% over 2023, to between $5.23 trillion and $5.28 trillion. NRF noted the pace is in line with the pre-pandemic growth rate of 3.6%.

Also boding well for retail fixture providers, a recent global shopper satisfaction survey by Zebra found retail channels continue to blur, with 71% of respondents indicating they make most of their purchases by integrating physical and online destinations.

Montbleau & Associates
Workforce recruitment and retention is an ongoing issue throughout the industry, including for companies involved in architectural millwork and retail fixtures. Photo: Montbleau & Associates - Paul Montbleau photographer.

FDMC 300: Steady or better
The FDMC 300, an annual ranking of the largest wood products producers in North America, saw sales for those in the architectural woodwork/millwork and retail fixtures segments reach an estimated $1.4 billion and $1.6 billion respectively in 2023. What’s ahead for 2024 and 2025?

“2024 booked sales will exceed 2023 booked sales,” Dustin Giffin, president of Giffin Interior & Fixture, Inc.  (#258) projected. “There are a number of large projects underway in our region, but most won’t be ready for woodwork until mid to end of 2025 and are bidding and selling now.  That being said,” he added, “recognized revenue will be down from 2023 due to the same reason.  A lot of projects finished in 2023 and there is a slight lull in our market it 2024 for jobs finishing.” Projections for 2025, he said, are “good to excellent.”

“We expect our 2024 sales to be about the same as 2023,” said Eric Smith, president of Panel Processing Inc. (#135).  “The year started with slow activity, and although quoting activity has picked up, there are too many challenges in business today for activity to be strong.”

Looking ahead, he is more optimistic. “We expect sales to pick up in 2025 to a good level,” he added, noting, “The election will be behind us, and we expect lower interest rates.”

“A factor I personally look for when forecasting is the quality of opportunities relevant going forward.  The opportunities are still viable,” commented George Reitz, president of American Millwork & Cabinetry (#286). Another factor is cash flow. I am watching not only my cash flow but those in my industry.”

He added, “For AMC we are OK, but for others, I am getting telltale signs of cash flow fatigue.” Projections for 2025, he said, are “stable.”

“Prices for materials continue to fluctuate but supply is less of a problem than it has been in past years.,” said Jim Fitzgerald, CEO of Mystic Scenic Studios/Mystic Millwork (#267). That said, he added, “I expect that sales for 2024 will be marginally better than they were for 2023 mostly due to the availability of skilled labor both on the shop floor and front of house management (PM, drafting, estimating).”

Regarding 2025, he said, “Mystic has been growing steadily over the last few years and I expect that to continue into 2025, so I think 2025 will be a good year.”

See Strategies for Success - sidebar below

Labor is still a challenge
Although 39% of respondents to AWI’s Business Sentiment Index said they plan to increase their workforce by 10% or more in the next 12 months, the question over where that labor will come from continues to be a question, Hague said. 

“The biggest concern is always skilled talent,” Fitzgerald said. “Fewer young people are getting into the trades and the current workforce is starting to age out so maintaining a good quality team is a great challenge.”

Smith agreed, “It is very difficult to attract quality employees and turnover is causing significant stress.”

“Many shop and field employees are retiring,” Giffin commented. “Automation is slow to replace them in the custom world.  AI is able to help augment some office work, but it’s not ready yet, [although] I assume it will be in the next two years.”

Giffin added, “Whoever figures out AI and automation combined will win the labor issue. “


FDMC 300: 2024 Report

View information on all 300 companies listed in the this year's FDMC 300. The 2024 FDMC 300 is sponsored by IMA Schelling Group.

Industry opportunities
Hague also referenced AI, and its ability to affect the industry.  “I’ve seen firsthand AI doing takeoffs and providing aspects that are mundane tasks that happen immediately,” he said.

“It’s becoming more and more real in the construction industry, which now means that it is just one more step away from reaching subcontractors and being very real in our space,” Hague added. Borrowing a quote he heard from a presenter at AGC: “AI will not take your job, but the guy using AI will.” 

“I believe quality workmanship will always create new opportunities,” Fitzgerald said. “Many of the projects I work on now are negotiated projects because my clients specifically want to work with Mystic because of our reputation for great work at a reasonable cost. For the industry at large, I think that holds true for the custom sector. It’s less about price and more about the deliverables than it was in the past. Clients want quality and are willing to pay more for it.”

Reitz agreed, adding “AMC is expanding into another division of construction as well as departmentalizing certain functions within our current business model.”

Noting that “high-interest rates have choked off a lot of construction projects,” Smith said, “We expect significant pent-up demand as rates are reduced in 2024 and 2025.”

About the FDMC 300
More than 50 architectural woodwork/millwork and retail fixture firms are included in the 2024 FDMC 300, an annual report published in April that tracks the largest wood products manufacturers in North America and ranks them by sales. Updates of the FDMC 300 firms and the industry segments are posted throughout the year. For information on how to be included, contact [email protected].

The 2024 FDMC 300 is sponsored by IMA Schelling Group.

FDMC 300 firms share strategies for success
We asked some of the FDMC 300 architectural woodwork and retail fixture manufacturers to share a tip for succeeding in the coming year. Here’s what they had to say:

  • “Remain flexible.  Change keeps coming,” said Eric Smith, president of Panel Processing Inc. (#135)
  • “Make sure you are running on an operating system for your business,” said Dustin Giffin, president of Giffin Interior & Fixtures Inc. (#258).  “Find a book like Scaling Up, Traction, the Advantage, Profit First, or one of many and decide to implement their system and follow it across the organization.”
  • “Be mindful of what your customers are doing as decisions made last year by management will come back and haunt us all,” said George Reitz, president of American Millwork & Cabinetry (#286). 
  • “Cultivate the best people you have and actively seek new personnel who can grow with the company. It’s really all about the people who do the work. If they are set up for success then the company will be successful,” said Jim Fitzgerald, CEO of Mystic Scenic Studios/Mystic Millwork (#267).

(More tips by large, mid-size and small wood products manufacturers can be found in the WOOD 100: Strategies for Success.


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About the author
Karen Koenig | Editor

Karen M. Koenig has more than 30 years of experience in the woodworking industry, including visits to wood products manufacturing facilities throughout North America, Europe and Asia. As editor of special publications under the Woodworking Network brand, including the Red Book Best Practices resource guide and website, Karen’s responsibilities include writing, editing and coordinating of editorial content. She is also a contributor to FDMC and other Woodworking Network online and print media owned by CCI Media. She can be reached at [email protected]