Wood industry representatives from various industry associations were queried on the climate of their wood products market, including expectations for 2013 sales. Below are some additional comments by Phil Bibeau, executive director of the Wood Products Manufacturers Association.
Wood & Wood Products: Overall, what are your members’ sales expectations for 2013 and how do they compare to 2012 figures?
Phil Bibeau: Based on conversations with members they feel that if Congress can “get their act together” and project some stability going into 2013, then sales should increase 2-5% over 2012 levels. Much of the optimism is based on consumers having a stable job and a steady revenue stream to support spending. The previous two years have started with business being strong in the first half followed by a slowing for the remainder of the year. The overall consensus is a hope that business will be steady in the new year, not the roller coaster that has we have been experiencing.
W&WP: What will be the biggest challenges to your members and your industry in 2013? What are the biggest opportunities?
Bibeau: The biggest challenges for members will be those related to cash flow. The management of receivables has turned into an almost full time job. As more and more companies must operate on available cash, the challenge will be to balance raw materials, inventory, and receivables to allow the company to continue serving existing companies and to be able to accept orders from new customers.
The biggest opportunities will come to those companies that have implemented a strong Lean management system within their manufacturing process. Those companies that have managed their cash and are able to respond quickly with rapid turnaround times will benefit from increased product demand.
As more and more products that were once produced in Asia are re-shored, those companies that can act as partners with their customers will see an increase in business.
W&WP: Which market segments offer the most growth opportunities for component manufacturers and why? (i.e., cabinet industry or building products?)
Bibeau: We are starting to see more new business being generated by the building industry. The backlog of unsold homes is shrinking and new home construction has stared on a limited basis in many parts of the country. Members are seeing more small volume orders being placed more often. With the price spread between Asian component parts and those produced in North America down to a 12-15% difference, many manufacturers/distributors of items such as stair component distributors are opting to buy more American products.
W&WP: What current or pending legislation is having, or will have, the greatest impact on the North American wood components industry and why?
Bibeau: Two major legislative items will have an effect on the industry are Obama care and increased OSHA enforcement, especially related to wood dust issues. Companies are going to be forced to spend a lot more time to ensure they are in compliance with each issue.
W&WP: Any additional comments and/or observations about the wood components industry or the woodworking marketplace in general?
Bibeau: The wood products industry is seeing a number of companies that have given up the battle and are closing. Those businesses that are still operating are the true survivors. They have made the changes necessary to compete in the global economy. They will see success if they continue to follow the principles that have brought them to where they are today. Work harder, smarter, and become a partner with your customers.
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