ProBuild CEO at NBMDA Speaks on Market Trends

By Lindsay Konzak

November 5, 2009

More about: Building Materials/Construction, Economy, MDM Blog, Pro-Build

Paul Hylbert Jr. of ProBuild addressed the declines his industry has seen this year.

This morning, I heard Paul Hylbert Jr., CEO of ProBuild, speak on industry and market trends to the North American Building Material Distribution Association (NBMDA). Here's a quick overview of some of his key points.

Sales for ProBuild - as with other top pro dealers - have fallen; for ProBuild, sales have declined by about 22% this year. But the company has added a couple hundred outside salespeople this year anyway, a good portion from Stock Building Supply and other closed dealer locations.

In his presentation, Hylbert spoke to the home price impact of foreclosures and shadow supply; noted that repair and remodeling world is not struggling as much as other parts of the building materials and lumber industry; and said commercial construction is struggling and he expects it to continue falling off. Commercial construction makes up a small percentage of ProBuild's sales.

ProBuild holds a conservative view of housing starts moving into 2010 - lower than most forecasts from the National Association of Homebuilders, Moody's and others. Why? He explained that it is ProBuild's nature to run a conservative business model, and that it is easier to build up capacity when a forecast ends up below reality, than it is to take it away. But he expects that over the next decade, we will see housing starts climb back into the 1.5 million-1.7 million range, partly due to demographic trends.

One of the trends Hylbert noted in his presentation: Builders, which make up most of ProBuild's sales, are asking the distributor to do more for them due to their slimmed-down state. As Hylbert said: "You have to listen to customers, and give them what they want."

Hylbert joined ProBuild when it was formed with the merger of The Strober Organization and Lanoga Corp, where he had also been CEO. Hylbert has a long history in building materials. He was the president of the NBMDA in 1993 when he was at PrimeSource Building Products, and is the current chairman of the National Lumber and Building Material Dealers Association (NLBMDA).

ProBuild has been one of the more acquisitive companies in the building materials and lumber space over the past few years. It is the largest building materials and lumber supplier in the country.

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