As the construction market recovery continued, sales for several building materials and construction distributors in the third quarter saw double-digit increases from the prior year. Sales for newly public Stock Building Supply Holdings Inc., Raleigh, NC, were $328.5 million, up 28.4 percent.
Atlanta-based BlueLinx Holdings Inc. saw sales jump 12.3 percent to $558 million, and USG Corp., Chicago, IL, reported third-quarter sales rose 12 percent during the quarter to $925 million, with distribution arm L&W Supply sales up 10 percent.
During quarterly conference calls and in earnings reports, distributors in the sector described the conditions they're seeing in residential and commercial markets and offered projections for general conditions in 2014.
Residential
"In the residential market, we have seen some softening in housing starts, which appears to be largely associated with rising interest rates and the U.S. government fiscal issues. Builder confidence as measured by NAHB slipped 2 points in October but still remains above 50, indicating there's still optimism in the residential market." – USG President and CEO James S. Metcalf (earnings call)
"Increased sales volume was primarily due to increased single-family housing starts and higher repair and remodel activity." – Stock Building Supply (press release)
“Sales to the residential new construction market improved, as we expected, with multifamily continuing to be the bright spot." – Gibraltar Industries CEO Brian Lipke (press release)
"The residential repair and remodel is showing signs of strengthening. Both the pace and value of existing home sales continues to increase" – USG President and CEO James S. Metcalf (earnings call)
Commercial
"In the commercial segment, we continue to see volatility. The ABI, or the Architecture Billings Index, which typically precedes commercial starts by about nine to 12 months, has been above 50 in 12 of the last 13 months." – USG President and CEO James S. Metcalf (earnings call)
"Repair and remodeling activity in the residential and low-rise commercial building markets remained equivalent to last year.” – Gibraltar Industries CEO Brian Lipke (press release)
General Outlook
"It's important to know that we still have a long runway before we get to historic averages in each one of the segments. But we do see light at the end of the tunnel. While we are cautiously optimistic, the positive trend in our results and the confidence in our recovery are enabling us to take a more proactive approach." – USG President and CEO James S. Metcalf (earnings call)
“Looking forward to 2014, a number of economic indicators suggest a strengthening in demand for building products compared to conditions in 2013.” – Gibraltar Industries CEO Brian Lipke (press release)
"We recognize that there are some headwinds, but we believe that the U.S. economic recovery is real and the overall demand in 2014 will be stronger than this year in all of our end-use markets." – USG President and CEO James S. Metcalf (earnings call)
“I don’t think the market is growing as fast as some of the prognosticators mentioned at the beginning of the year. But I think the market is growing somewhere between 15 percent and 20 percent this year, and we’ve got some tailwinds for us for going into the next couple of years.” – BlueLinx Executive Chairman Howard Cohen (earnings call)
"While we expect the normal seasonal and weather related slowdown in our business as we enter the winter months, we believe macroeconomic trends remain favorable for year-over-year improvement in our core markets.” – Stock Building Supply CEO Jeff Rea (press release)
