Ceramic Industry

Architectural Glass Sector Suffers with Construction Market; Modest Growth Projected

July 20, 2012

While the use of architectural glass is prevalent across most building markets (e.g., office buildings, hospitals, schools, retail spaces and condominiums), the significant drop in construction activity over the past five years has hindered the industry’s performance, says Andrea Alegria, IBISWorld industry analyst. As such, industry revenue is expected to have declined at an average annual rate of 7.7% to $1.96 billion in the past five years.

According to Alegria, “The market for architectural glass in the U.S. is mature and moves in line with U.S. residential and commercial construction. The total collapse of the housing market and the subsequent impact on commercial construction curtailed demand.”

Revenue declined from 2007 through 2010, dropping by as much as 26.9% in 2009 during the peak of the recession. Exports represent a decent share of the architectural glass manufacturing industry’s business, but it also faces a significant level of competition from imports. As a result of the drop in demand and deteriorating profit conditions, industry players have implemented a number of cost-control measures, including workforce reductions, divestment of underperforming business operations and adjustments in manufacturing capacities. The number of firms and jobs has subsequently declined from 57 firms and 8,067 employees in 2007 to about 46 firms and 7,070 employees in 2012.

Following a modest improvement in 2011, the industry is expected to grow over 2012, in line with economic recovery and gains in U.S. construction spending. Revenue growth will be subdued by the slow pace of recovery in the commercial construction markets; however, rising demand for energy-efficient architectural glass will help propel the industry forward. Design innovation and new applications for architectural glass will also alleviate competitive pressures and profits will improve.

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