6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
This article is part of the 2012 Distribution Trends Report, an annual update for MDM Premium subscribers. Access the full distribution trends report here.
The challenge is that recovery is inconsistent, depending on which market you operate in. Residential construction remains depressed overall, though activity has increased in certain geographies. States involved in shale oil and gas extraction are seeing stronger residential markets, as well as the Pacific Northwest. Commercial construction overall remains soft.
2. Credit & banking challenges continue to plague the industry. An unhealthy banking industry is translating to a credit crunch for distributors, particularly those operating in this sector. Some improvements have taken place, but “we’ve got a long way to go,” says Ruth Kellick-Grubbs, president of Kellick and Associates.
Kellick-Grubbs forecasts that it will be at least three years before we start seeing anything more than the incremental improvements that are happening now.
3. More focus on technology tools. Building materials distributors, for the most part, are continuing to operate in “all-hands-on-deck mode,” Kellick-Grubbs says. They’re hiring more part-time or temporary workers to meet upticks in demand, but they’re also looking more toward technology to help them operate more efficiently.
Specific tools mentioned include: automated routing software, tablets that serve as sales tools and GPS/routing tools, and customer relationship management software.
Beacon Roofing Supply took aim at Canada for expansion, completing two acquisitions in 2011: The Roofing Connection and Enercon Products. The distributor also completed acquisitions in the U.S.: Cassady Pierce in Pennsylvania and Fowler & Peth in Colorado.
Roofing Supply Group bought Intermountain Supply in Washington before being acquired by private equity firm Clayton, Dubilier & Rice.
Allied Building Products proved to be one of the most active acquirers in 2011, completing several acquisitions including Austin Acoustical Materials and Astro Building Supplies.
US LBM Holdings slowed down its expansion in 2011 but still added two companies to its ranks: John H. Myers & Son and Lyman Lumber.
The Gores Group, a majority owner of Stock Building Supply since Wolseley spun off the unit in 2009, purchased the remaining interest in the company in 2011.
Average growth for companies on the MDM Market Leaders list for building materials/construction: 6.3%