Why is construction still in a holding pattern?
Construction has always been one of the key segments of composites demand in the form of bath tubs, shower stalls, flat, corrugated and architectural grade panels, residential doors, garage door skins and window frames. New housing starts and remodeling expenditures are the primary drivers of composites usage—and we all know how miserably weak those statistics have been. As of October 2010, the industry built homes at a seasonalized rate of 519,000 per year, which means the rate of builds has fallen 75 percent from its peak in 2005. Many contractors and lending institutions have been driven to bankruptcy, some 1.6 million jobs were lost in construction and the rate of unemployment in homebuilding is 18.8 percent or twice the national average.
Is there anything set up to stimulate construction manufacturing?
The homebuyers’ tax credit, which expired in April 2010, stimulated home sales somewhat but, in hindsight, the program appears to have merely pulled sales forward from later months. This suggests a weak housing market in 2010 that was temporarily revived by the tax credit. The single-family market remains in a holding pattern as potential buyers await solid positive economic indicators that their jobs will remain in place and that the economy is moving forward. Hence, some ongoing new construction is needed to respond to demand that is growing in those geographic markets that did not experience overbuilding or abnormal price increases.
In terms of wind energy, how is the U.S. measuring up?
The utility-scale wind energy market was born in the U.S. and the U.S. was the global leader in the first half of the 1980s. In the years following, more far-sighted policies in Europe and the expiration of wind energy incentives in the U.S. led to more growth overseas and domestic stagnation. In 2009, the U.S. wind energy business experienced a phenomenal year of growth and installed 9,922 megawatts (MW) of wind power capacity. The accomplishment was a16 percent increase over a strong 2008 performance and 89 percent greater than what the industry installed in 2007. Then we arrived at 2010 and the number of new wind turbines installed nosedived. The U.S. is currently the global leader in cumulative wind energy installed, but the momentum earned in recent years could be squandered if the U.S. does not take steps to encourage more new installations like several other countries have.
Are there areas where composites are thriving?