The Resurgent Lumber Industry… And Schaffer Associates’ Role to Play
A recent article in HBSDealer on the “Top 200 Pro Dealer Industry Scorecard” listed the most successful lumber and building materials (LBM) industry companies in the last completed fiscal year of 2016. And while Schaffer Associates operates across the whole of the hardware, home improvement, and building materials sector in the areas of retail and manufacturing, in addition to distribution, we were proud to see several of our clients make the top 200 LBM dealers list. In fact, Schaffer Associates had four clients in the top 20, as well as five in the top 50, and eight in the top 200! The success of our current and future clients in the LBM industry in particular revolves around their ability to take advantage of momentum in their sector and the economy overall.
As the HBSDealer article indicates, 2016 was a watershed year for the lumberyard industry, regardless of whether a company landed on the top 200 list. The greatest single cause of the industry’s economic momentum in 2016 was a 9.4% increase in single-family housing starts over 2015 (781,500 in ’16 vs 714,500 in ’15). And while residential construction still has a long way to go to regain pre-recession levels in terms of new starts, the strong numbers in 2016 were a huge boost to companies throughout the industry.
A second incredible storyline coming out of 2016 was the remarkable trend of mergers and acquisitions that reshaped the landscape of many of the larger LBM companies. This activity has grown the footprint of some of the leading companies in the market, while creating new opportunities for the sector as a whole.
Now that we are in the eighth month of 2017, we can begin to paint a picture of what 2017 will look like when it concludes and draw comparisons to 2016. In the spring of this year, housing starts were down slightly from their improved numbers in 2016, causing some to question what the balance of 2017 might hold for the LBM sector. However, those numbers have improved during the summer months and that trend is expected to continue into the fall. In addition, in early 2017, the overall economy seemed hesitant to grow quickly based on uncertainty around the new administration following the 2016 election. While some uncertainty lingers, most markets seem to have adjusted, and more stable overall economic growth seems likely throughout the year.
To be sure, it’s an interesting time to work in the LBM industry. Other factors affecting performance (either positively or negatively) in 2017 are the continually increasing importance of technology, the growth of modular/offsite construction, and the ever-present shortage of skilled labor in the workforce. Schaffer Associates specializes in helping companies overcome that shortage and fully capitalize on the opportunities that exist within the LBM industry this year and every year since 1992. We hope you’ll join the eight Schaffer Associates clients in the top 200, and the four in the top 20 in particular, by giving us a call today!
Headquartered in Charlotte, North Carolina, Schaffer Associates is a national management consulting firm specializing in executive search and organizational strategies for the hardware, home improvement, building materials, and consumer products industries. As the premier management consulting firm serving the industry, we help build organizations and leadership teams that foster corporate growth and success well into the future.
Call us at (704) 535-9939 or find us at www.SchafferAssociates.com