Association of the Wall and Ceiling Industry Logo

Construction Trends

All 50 States Expected to Experience Housing Recovery in 2013, Says PCA

Since 2005, tepid economic growth and high foreclosure rates have depressed home prices, bloating inventories and preventing start activity. In 2013, economists are revising nearly a decade of pessimism and forecasting growth throughout the residential construction industry.

A report from the Portland Cement Association introduced Jan. 17, 2013, projects total housing starts to reach 954,000 units in 2013, reflecting further improvement on 2012’s nearly 30 percent growth.

Even stronger growth in homebuilding is predicted to materialize in 2014 with starts surpassing 1.1 million.

In another optimistic turn from previous residential forecasts, PCA expects the recovery to be broad-based and is projecting all 50 states will see increases in single family housing this year. Already under way in the interior United States, the emergence of accelerating construction growth has begun to appear in some of the hardest hit states during the housing bubble burst. These regions are now likely to lead growth in coming years as the long depressed markets begin to return to housing construction rates consistent with their demographics.

PCA expects multifamily construction to continue to grow at a strong pace as favorable fundamentals fuel the sector. Multifamily starts recorded a 55 percent gain in 2011 and 36 percent growth in 2012. PCA expects an additional growth of 15 percent in 2013 to 277,000 units. Damaged credit due to foreclosure activity and tight mortgage lending standards have combined to create robust apartment demand.

Remodelers Forecast a Bright 2013

The National Association of the Remodeling Industry’s fourth-quarter Remodeling Business Pulse data of current and future remodeling business conditions has experienced significant growth across all indicators, with forecasting in the next three months hitting its all-time highest level.
The significantly positive results have a lot to do with homeowner security, remodelers say.

Growth indicators in the last quarter of 2012 are as follows:

Current business conditions up 2.1 percent since last quarter.
Number of inquiries up 3.9 percent since last quarter.
Requests for bids up 3.7 percent since last quarter.
Conversion of bids to jobs up 3.5 percent since last quarter.
Value of jobs sold is up 4.3 percent since last quarter.

Throughout 2012, the Remodeling Business Pulse produced less statistically significant increases and decreases; however, the fourth-quarter data show movement in highly important business areas such as conversion rates and value of jobs.

Although they provide positive marks, NARI members are realistic about the reasoning, saying many consumers are spending on remodeling out of necessity.

According to the data, expectations for 2013 look to be even brighter. Two-thirds of remodelers forecasted the next three months positively, and the rating jumped 13.1 percent from the last quarter.

Drivers of this positive outlook continue to be postponement of projects (81 percent reporting) and the improvement of home prices (51 percent reporting).

Of the small segment predicting declines, 91 percent cited uncertainty of the future with commentary focused largely on tax increases and leadership issues in Washington.

To review the research in its entirety, send your request to [email protected].

List of Improving Housing Markets Expands to 242 in January

In the latest sign of a burgeoning recovery in U.S. housing markets, the number of metropolitan areas on the National Association of Home Builders/First American Improving Markets Index rose for a fifth consecutive month to 242 in January 2013. This is up from 201 markets listed as improving in December, and includes entrants from 48 states and the District of Columbia.

The IMI identifies metro areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. A total of 47 new metros were added to the list and six were dropped from it this month. Newly added metros include such geographically diverse locations as Los Angeles; Auburn, Ala.; Des Moines, Iowa; Nashville, Tenn.; Richmond, Va.; and Cleveland.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list.

A complete list of all 242 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in January, is available at A state-by-state listing of metro areas on the list is also available at

Builder Confidence Holds Steady in January

Builder confidence in the market for newly built, single-family homes was unchanged in January, remaining at a level of 47 on the National Association of Home Builders/Wells Fargo Housing Market Index, released Jan. 16. This means that following eight consecutive monthly gains, the index continues to hold at its highest level since April 2006.

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The index’s components were mixed in January. The component gauging current sales conditions remained unchanged at 51. Meanwhile, the component gauging sales expectations in the first half of 2013 fell one point to 49 and the component gauging traffic of prospective buyers gained one point to 37.

The HMI three-month moving average was up across all regions, with the Northeast and Midwest posting a two-point gain to 36 and 50, respectively. The South registered a three-point gain to 49 and the West posted a four-point increase to 51.

Dodge Momentum Index Rebounds in December

The Dodge Momentum Index rose 3.2 percent in December, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

The December gain brought the Momentum Index to 94.9 (2000=100), up from November’s revised 91.9. After showing a hesitant upward trend during the first seven months of 2012, the Momentum Index settled back from August through October, and then stabilized in November. This coincided with the economic and political uncertainty that dampened investment during that time. The December rebound for the Momentum Index brings it back close to the 95.4 reached in July, which was the highest reading reported during 2012. The latest month’s upturn may also be the initial sign that the uncertainty that restrained plans for construction is now easing, with the November 2012 elections now final and the fiscal cliff being averted for the time being.

December’s increase for the Momentum Index was due entirely to a pickup by its commercial building segment, which advanced an impressive 9.0 percent relative to November. New plans for stores and office buildings were stronger in December, and several notable warehouse developments also bolstered the Index, including plans for two new Amazon distribution facilities in Dupont, Wash., and Fort Worth, Texas. In contrast, the institutional building segment of the Momentum Index dropped 2.4 percent in December, weighed down by a reduction in the number of new hospitals entering the planning phase. The retreat for the institutional building segment is likely to continue for a while longer, given expected cutbacks in federal spending and state budget constraints.

U.S. Demand for Molding & Trim to Reach $9 Billion in 2016

U.S. demand for molding and trim is forecast to rise nearly 11 percent per year to $9.0 billion in 2016. A sharp rebound in new housing construction and a partial recovery in nonresidential building construction will drive gains. However, this revival in new construction activity will still not be sufficient to raise molding and trim demand in 2016 to the level achieved in 2006. These and other trends are presented in “Molding & Trim,” a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Exterior trim is one application in which material shares are expected to change slightly over the forecast period. Wood will remain the market leader but face increasingly stiff competition from plastic and engineered wood, which better resist degradation caused by insects and exposure to the elements.

Engineered wood molding and trim is forecast to advance at the most rapid pace of all materials through 2016. The increasing use of these materials in the fast-growing new residential market will spur advances. Home builders will choose engineered wood products because they look like wood but do not need to be painted or stained prior to installation. This will support the use of engineered wood as molding and exterior trim.

Stairwork demand is forecast to advance more than 11 percent annually through 2016. Because most stairwork is installed in new structures, rebounding new building construction spending will drive gains. Wood will continue to dominate residential stairwork demand, while metal will account for the majority of the nonresidential market.

Demand for molding—defined here as molding and trim products only used in interior applications—will be driven by strong growth in housing completions. Wood will remain the leading material used in its production. Consumers prefer the appearance of wood to that of other materials, while construction professionals specify wood due to its low cost and their familiarity with the material.

“Molding & Trim” (published 12/2012, 328 pages) is available for $5,100 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details contact Corinne Gangloff by phone (440) 684.9600, fax (440) 646.0484 or e-mail [email protected]. Information may also be obtained through

Drywall Safety Act Cites ASTM Standard

In response to the importation of contaminated drywall that caused health and safety hazards when used in home construction, the Drywall Safety Act of 2012 (PL 112-266) was signed into law by President Barack Obama on Jan. 14, 2013. The new law cites ASTM International standard C1264-11, Specification for Sampling, Inspection, Rejection, Certification, Packaging, Marking, Shipping, Handling and Storage of Gypsum Panel Products.

The Drywall Safety Act requires the U.S. Consumer Product Safety Commission to set regulations based on C1264, which was developed by ASTM Subcommittee C11.01 on Specifications and Test Methods for Gypsum Products, part of ASTM Committee C11 on Gypsum and Related Building Materials and Systems. The standard provides the CPSC, states, suppliers and consumers with an effective tool for supply chain communication by specifying that each gypsum panel product or package must be marked for the thickness, the name of the producer or supplier, the brand name, if any, and the ASTM specification for the product. The inclusion of ASTM C1264 in the Drywall Safety Act will help builders and consumers better understand the origin and source of drywall and other gypsum products.

Under the act’s provisions, ASTM International will notify the CPSC of any updates to the labeling standard within 60 days; the CPSC will then have 90 days to disapprove ASTM’s recommended changes. If the CPSC accepts the most updated version of the ASTM standard, then the new version becomes effective 180 days after ASTM’s initial notification.

Because sulfur content levels in the imported drywall have been associated with elevated corrosion rates in a home, the act requires that the CPSC issue a regulation that limits the sulfur content for drywall manufactured in the United States or imported from abroad. In lieu of issuing a federal rule, the CPSC may adopt a voluntary consensus standard, developed by C11.01, that addresses the level of sulfur content in drywall. Currently, ASTM test methods do not address the sulfur content in drywall, however, C11.01 intends to bring together public and private stakeholders to determine how to best address this need through the possible development of a technical standard.

ANSI Approves Next Generation of the ICC 700 National Green Building Standard

The National Association of Home Builders and the International Code Council applaud the recent approval of the 2012 ICC 700 National Green Building Standard™.

In 2007, NAHB and the ICC partnered to establish a nationally-recognizable standard definition of green building. The resulting ICC 700 National Green Building Standard is the first and only residential green building rating system to undergo the full consensus process and receive approval from the American National Standards Institute. This is the first time the standard has undergone Consensus Committee review and update since it was published in 2009.

To date, the standard has been widely implemented throughout the industry. The NAHB Research Center, which serves as the secretariat of the standard as it progresses through ANSI, has certified the compliance of thousands of dwelling units and developed lots to the ICC 700. The new version of the standard includes several important changes:

Energy Code Update—While the original ICC 700 used the 2006 version of the International Energy Conservation Code as a basis, the new version will use the 2009 IECC. The requirements of the 2009 IECC are estimated to result in energy efficient performance that is about 15 percent higher than the previous 2006 code.

Restructured Scoring for Remodeling—The new version completely revamped the scoring for renovations and remodeling projects. The revised standard includes two entirely new chapters devoted to existing building projects. The first provides criteria for entire buildings and includes requirements for improved energy and water efficiency that increases as higher levels of compliance are sought. The second provides a green protocol for the most common renovation and addition projects that focus on functional areas of a home such as a kitchen, bathroom, basement or addition under 400 square feet.

The standards are available for order at

For more information on the 2012 ICC 700 National Green Building Standard visit

AWCI Member Contractors in the News

For the fourth consecutive year, Heartland Acoustics & Interiors, Englewood, Colo., has been selected for the 2012 Best of Englewood Award in the Acoustical Contractors category by the U.S. Commerce Association.

Nationwide, only one in 250 (less than half of 1 percent) of the 2012 Award recipients qualified as four-time Award Winners. Various sources of information were gathered and analyzed to choose the winners in each category.

The USCA “Best of Local Business” Award Program recognizes outstanding local businesses throughout the country. Each year, the USCA identifies companies that they believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and community. Various sources of information were gathered and analyzed to choose the winners in each category.

People in the News

Niles Building Products, Niles, Ohio, has promoted Dave Muccia to vice president of sales and marketing.

Muccia joined Niles in 2011 as national sales manager and has been the driving force behind the growth of Niles into new markets and the reopening of the company’s Dallas/Fort Worth distribution center.

Browse Similar Articles

You May Also Like

The U.S. Department of Labor announced a final rule clarifying the rights of employees to authorize a representative to accompany an Occupational Safety and Health Administration compliance officer during an inspection of
AWCI's Construction Dimensions cover

Renew or Subscribe Today!