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Component Manufacturing dverti$ dverti $ er
Don’t Forget! You Saw it in the
Adverti$$er
August 2025 #17313 Page #176
TheLast Word Finding Your Place in a Great Industry Joe Kannapell, P.E.
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ouring two plants in July, I couldn’t help wondering which would be a better place to work in the current slowdown. Both are privately owned businesses that are being managed by second-generation owners. Plant “A” is in a stable, rust belt market, and plant “B” is part of a longstanding organization that has expanded to a rapidly growing, southeastern market. Comparing the two sheds light on the key characteristics of a sustainable business. Companies that exemplify these factors are the best places to work, even though all component companies are impacted by the overall health of the housing market. Slowdowns are hard to predict, but they are more difficult when they follow a euphoric period, like the recent Covid-induced mini-boom. That was a rare period when our industry prospered while others suffered. Now it seems that we’re doomed to repeat the feast-and-famine, ratcheting economy that has plagued the component industry. The fact that most of us have been through several of these down cycles offers little consolation. But, most of us also made it out the other side, and many of us even got to a better place, though not necessarily by choice. This component business was, is, and will be a good place to stake our future. Recall its euphoric birth described in last month’s Home Building Technology, Part VII: Carol Sanford’s Quantum Leap, when a piece of metal costing seven cents could be sold for a dollar. And realize that, over the subsequent few years, trusses were so much better than their alternatives that a worldwide industry was created in less than a decade. Certainly, housing starts have been volatile since then, but they have been less volatile since 1990. The sharpest declines have occurred after the greatest excesses, and today we are not generally close to being in an overheated market. We are producing less units, about 1.2 million annually, than the 50-year average of 1.4 million units, with a population more than double what it was at the start of this industry.
According to our builder customers, the future looks bright. At the June SBCA Open Quarterly Meeting, NAHB presented the results of a heartening survey of 1000 builders. Although expected sales increases varied across types of builders and regions of the country, 12% plan to purchase more wall panels and 20% plan to purchase more roof trusses over the next five years. What was striking is that national builders plan to purchase 29% more wall panels, despite the significant skepticism of many CMs. Continued next page
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