Brick Markets Remain Strong Despite Anticipated Construction Slowdown
Brick shipments roughly parallel trends in residential housing starts, indicating that around 80% of brick shipments are for residential use. Despite the fact that shipments have been at or above record levels since 1996, the average number of brick per start has been flat, at just over 5000, suggesting that it is the increased volume in new housing, rather than an increase in wall share, that has pushed the industry close to its capacity in 1999 and 2000. Based on the number of new home sales in the first quarter of 2001, housing markets remain strong—as of May 2001, sales had averaged 942,000 units, the strongest ever for the first five months of a year and, except for March and April, the strongest five-month average ever. June sales were expected to remain robust, with demand likely to slow by the end of summer. Still, the continued building boom should lead to increased 2001 sales for many brick manufacturers.
Profits, on the other hand, may be more difficult to sustain. While the prices of other building products have increased directly with increasing demand, the cost of 1000 SBE increased only modestly between 1991-1999, with the biggest increases coming more recently due to sharp rises in the cost of natural gas. While housing starts rose 64% and demand for brick shipments rose 49% in the nine-year period, the cost of 1000 SBE rose only 24%, an average increase of 2.5% per year.
South Atlantic Uses the Most BrickAs in past years, the predominant region for brick production, capacity and brick use in the U.S. was the South Atlantic (including Delaware, Maryland, District of Columbia, Virginia, West Virginia, North and South Carolina, Georgia and Florida). This region is also the highest in terms of the number of plants. In total, the South Atlantic accounted for 39.3% of total 2000 brick shipments.
The area of the second highest importance in brick shipments (third highest in production) was the East South Central region (including Kentucky, Tennessee, Alabama and Mississippi). This area represented 20.4% of total 2000 shipments and 20% of total production. In addition, this region was the third highest in capacity at 19.7% of total capacity.
The third most important area for shipments and second for production and capacity of brick was the West South Central region (including Texas, Oklahoma, Arkansas and Louisiana), with 19.9% of total shipments and 20.7% of total production.
States using the least amount of brick in 2000 include Maine, Vermont, Oregon, Montana, Wyoming, New Mexico, Nevada, Washington, Alaska, Hawaii and Arizona. Each of these consumed less than 0.1%.
Manufacturers are Optimistic About the FutureAccording to the Brick Industry Association (BIA), brick manufacturers are steadily increasing capacity to avoid the tight supply and longer lead times of the 1999-2000 building boom. Despite an anticipated slowdown in residential construction in the U.S., most brick companies continue to remain optimistic. Since 1999, the industry has continued to phase in new plants and increase the efficiencies of older plants, adding approximately 900 million (M) units of capacity—or about enough to build more than 60,000 all-brick homes in 2001.
“Although brick plants take longer to build due to EPA and other regulatory considerations, the industry continues to increase its capacity to meet home buyers’ steady demand for brick’s quality and value,” said Tom Perry, vice president of the BIA. “Home buyers are finding their brick choices more readily available without the delays they may have experienced two years ago.”
Brick manufacturers are also helping to offset the rising prices of natural gas by replacing older technologies with more energy-efficient, modern kilns.
Five new plants have started production this year with a total capacity of
277 M. Last year, the industry added six new plants with a total capacity of 293 M, and increased capacity by 116 M among three plants. In 1999, brick manufacturers added four new plants for a total capacity of 195 M (see sidebar: New Plants/Production, 1999-May 2001). In 1998, two plants came on line with a total capacity of 90 M. Four new plants were added in 1997 for a total capacity of 198 M.
The average house is approximately 2200 square feet in floor space, and, if all four walls were brick, would use about 15,000 brick. This means that every million brick in new capacity is the equivalent of 67 average new homes, if all wall space were brick. Every 100 million brick equates to 6700 all-brick homes, or every million brick equals about 150,000 square feet of brick wall area.
Editor's NoteThe foregoing information was obtained from the Brick Industry Association’s (BIA) Brick Sales and Marketing Report 2000 and other BIA information. For more information about the U.S. brick industry, contact the BIA at (703) 620-0010 or visit www.brickinfo.org.
SIDEBAR: New Plants/Production, 1999-May 2001Acme Brick Co., Fort Worth, Texas
New plant, Elgin, Texas, 2000: Capacity 60 M (million)
The Belden Brick Co., Canton, Ohio
New plant, Sugarcreek, Ohio, 2001: Capacity 45 M
Boral Bricks, Inc., Roswell, Ga.
New plant, Augusta, Ga., 2001 Scheduled to open in late October, will produce approximately 40 M clay pavers (residential, commercial applications).
Carolina Ceramics, Columbia, S.C.
New plant, Columbia, S.C., 2000: Capacity 28 M
Columbus Brick Co., Columbus, Miss.
New plant, Columbus, Miss., 2001: Capacity: 80 M
General Shale Products Corp., Johnson City, Tenn.
Hanford, N.C. and Laural, Va. plants, 2000: Increased capacity by 60 M
Glen-Gery Corp., Wyomissing, Pa.
Chillocothe, Mo., plant, 2000: Added kiln, increased capacity by 38 M
Global Clay Marseilles, LLC, Marseilles, Ill.
New plant, Marseilles, Ill., 2000: Capacity 70 M
Hanson Brick America-Richtex Corp., Columbia, S.C.
Roseboro, N.C. plant, 2001: Increased capacity by 20 M
Monroe, N.C. plant, June 2002: Increasing capacity to 80 M
All facilities: Undertaking efforts to improve efficiencies
Jenkins Brick Co., Montgomery, Ala.
New plant, Montgomery, Ala., 2000: Capacity 50 M
Redland Brick, Inc., Williamsport, Md.
New plant, July, 2001: Harmar plant, near Pittsburgh, will increase capacity to 60M (will close an old plant at the same time)
Plant upgrade, 2001: KF Plant, Windsor, Conn.: Has increased capacity of kiln and machinery that handles setting and dehacking. Net: 5 M increased capacity
Richards Brick Co., Edwardsville, Ill.
Edwardsville, Ill. Plant, 2000: Increased capacity by 18 M
Triangle Brick Co., Durham, N.C.
New plant, Merry Oaks, N.C., 1999: Added 100 M
New plant, Wadesboro, N.C., 2001: Added 110 M
Watsontown Brick Co., Watsontown, Pa.
New plant, Watsontown, Pa.: Capacity 40 M
Source: Brick Industry Association (BIA)