For the siding segment, cautious optimism holds sway in turbulent times.
When armor was first created around 1400 B.C. by the ancient Greeks, it was far from the elaborate full-body metal outfits Hollywood has come to glamorize. Rather, it consisted of several single-piece bronze plates that protected the upper body, shoulders, neck, and arms. Innovations in blacksmithing techniques over the centuries allowed artisans to transform that basic protection into full suits of ornately-decorated armor that covered almost every square inch of the body. Expensive, heavy, and difficult to maintain, these suits nevertheless provided exceptional protection against just about everything that was thrown at the knights wearing them.
Similar to those armored suits of old, siding provides the outermost layer of protection for our homes while adding a sense of style and aesthetic. The siding market, however, has suffered a few dents and dings over the past few years. Due in part to much-reported labor shortages and supply disruptions, along with record-high demand spurred by the COVID-19 remodeling boom, the siding market has been difficult for the LBM dealer to navigate, predict, and plan for.
It’s an environment that siding manufacturers are well aware of, and they’ve made every effort possible to keep up with demand in spite of those challenges. And while manufacturers continue to face similar issues this year as in the past two, they’re committed to sustained growth and increased options for their customers. “Supply chain issues have put a constant strain on our manufacturing facilities, but our employees and suppliers have done a great job ensuring that we continue to be able to offer our full product line while doing our best to keep up with demand,” says Jon Lapp, product manager of siding for ProVia Siding. “Lead times have not always been what we hoped for, but we have overcome and are seeing positive results. Labor shortages have been a much smaller issue thanks to our dedicated employees.”
Manufacturers are positive despite the challenges, and their predictions range from guarded optimism to outright enthusiasm. “We predict that the siding market will continue to show steady growth over the next year accompanied by an increased demand for premium siding products,” says Derek Blank, marketing director of siding brand, segment, and channel for LP Building Solutions. “There’s an estimated two million homes underbuilt, leaving a gap in housing inventory. This highlights a significant supply deficit that will keep siding materials in high demand for the foreseeable future.”
Steve Booz, vice president of marketing and product development for Westlake Royal Building Products, shares this optimism, citing economic factors as major driving components in the siding industry’s growth. “We have experienced significant growth and demand in the siding market, especially with the historically low interest rates we saw in 2021, an increase in real estate prices and new home builds, and the continued population shift from dense urban areas,” he explains. “Despite some challenges we are seeing now in raw materials, labor shortages, and increased mortgage rates, Westlake Royal Building Products is particularly optimistic about the Repair and Remodel market to drive upward movement in the siding market in 2022 and into 2023.”
These positive predictions from manufacturers aren’t meant to imply there won’t be bumps in the road. There’s an evident cautiousness among them—not surprising considering what they and LBM dealers have gone through over the past two years. “If the economy doesn’t have any additional major setbacks and supply chains have the ability to stabilize, growth is possible because of demand,” points out Greg Fritz, CEO of Evolve Stone, Inc. “That said, growth is dependent on the manufacturing’s overall capacity, which is limited.”
Rising interest rates and increasing inflation may also play a part in slowing the rate of growth for the siding industry. Manufacturers, though, still see reason for judicious confidence. “I expect to see growth continue, but supply is beginning to catch up to demand as manufacturers recover from a host of supply chain and labor shortages that have dragged them down since mid-2020,” says ProVia’s Lapp. “Sales should continue to rise through the year until the fourth quarter when I expect to see them level off going into 2023. Beyond this year, demand for siding will depend on how much the rising interest rates cool the housing market.”
A tricky time for trends
When it comes to identifying growing trends in siding, this year’s market could be compared to what sailors refer to as confused seas. Because of product shortages over the past two years, builders and homeowners alike were more often than not forced to pass over a product they really wanted and instead purchase something that was merely available. It’s a situation that’s made it exceptionally difficult for manufacturers to correctly predict product trends.
“The past 12 months have been difficult for dealers and consumers alike,” explains Lapp.
“Trends and customer preference have often been superseded by product availability as manufacturers struggled to produce enough product to meet demand. Many consumers were forced to make concessions on their preferences and purchase products that were more readily available. Because of the unprecedented demand and the shortages that ensued, it’s been difficult to put a finger on any new trends. While not a trend, many consumers have often purchased the products that were most readily available versus waiting for their first choice.” This isn’t to say that product preferences won’t emerge as the year plays out and product choices increase. Manufacturers report continued demand for “modern farmhouse” aesthetics that include the use of board and batten, but updating it with mixed materials to create unique, visual statements.
“We are still seeing the modern farmhouse trend in homebuilding, but recently designers have been creating hybrid looks incorporating some modern farmhouse designs as well as elements of mid-century modern and industrial influences,” Chris Johnson, director of siding product and marketing for Westlake Royal Building Products explains. “Mixed-use siding is at the forefront of this transitional modern farmhouse trend. Board and batten siding mixed with stone or brick continues to gain popularity for a modern farmhouse look. Another popular design is mixing clapboard siding with textures of shake or vertical style of board and batten to create visual interest and balance.”
Hand in hand with the continued strength of the modern farmhouse look is the use of bold colors and black accents. Westlake Royal’s Johnson reports significant percentages of consumers are opting for a darker color palette. “We are also noticing that customers are continuing to migrate from lighter to darker exterior colors,” he points out. “In fact, we have seen that since the start of 2018. The Royal Vinyl Siding and Exterior Portfolio Vinyl Siding dark color mix has increased by over 20% while the traditional light colors have all trended down as the darker colors have grown.”
Johnson goes on to point out specific products from Westlake Royal’s portfolio to back up this trend. “We’ve observed a trend of new dark grays and dark blues such as Indigo (Exterior Portfolio), Marine Blue (Royal Siding), Carbon (Exterior Portfolio) and Ironstone (Royal Siding) have exploded in usage and now represent some 20% of sales. In fact, medium grays like Harvard Slate (Royal Siding) and Greystone (Exterior Portfolio) are our top selling individual colors.”
These visual aesthetics aren’t the only factors driving product choice, however. According to the U.S. Bureau of Labor Statistics, nearly 8 million skilled-labor jobs were lost from the labor force during the pandemic, and roughly only half of those jobs have been filled to date. It’s that shortage of labor that’s driving siding contractors to choose products that are created to save installation time.
“With fewer skilled tradespeople, installation efficiency becomes more critical,” says LP’s Blank. “Products that focus on installation efficiency, like our LP SmartSide trim and siding are shown to install faster and help reduce the labor required to finish the job.”
Evolve Stone’s Greg Fritz agrees. “Composite siding continues to gain market share compared to traditional materials,” he says. “We see manufacturers moving toward a systematic approach while striving to make products easier to install.”
LP’s Blank points to his company’s pre-finished accessory offerings such as its SmartSide ExpertFinish outside corners as additional products that can save builders installation time. “Because they come ready to install, builders no longer need to manufacture corners on the jobsite,” he points out. “Knowing that labor is an issue, saving time like this onsite is hugely valuable.”
Use knowledge to add value
Considering the challenges of today’s siding market, successful LBM dealers need to be more than just a retail destination. In order to sell more, manufacturers recommend, do more of the things that don’t involve selling. Focus on providing extra value that your customers won’t find elsewhere, they say, so they know you’re putting their best interests first.
As Blank explains, “This could include understanding the benefits of different siding options available in the market that can provide a solution that meets your customer’s needs. For instance, you can help educate them about products that install more efficiently. If they are a green builder, you can recommend products that provide enhanced sustainability advantages relative to other products. Beyond products, you can connect them with technical resources like the LP technical services team or LP SkillBuilder online training portal—an online collection of digital resources to help train their installers on the techniques, tips and tricks of installing LP SmartSide products. Essentially, find the ways that you can easily provide your customers additional value to help them build better, faster, and more effectively.”
Product knowledge—both about the products you sell as well as those you don’t—continues to be a crucial factor, points out Westlake Royal’s Chris Johnson. “Understanding the customer’s project and leveraging product knowledge to find the best siding to meet their needs positions the dealer as an important resource contractors can rely on. Most manufacturers provide these education opportunities for dealers and their customers, in person and virtually.”
Product knowledge alone, however, is not enough. Whether it’s between the LBM dealer and the manufacturer, or from the dealer to their customers, clear communication on all aspects of the sale, from product availability to the ultimate delivery of product, is equally important. “To help navigate the volatility of the economy, constant communication is key to meeting demand,” recommends Evolve Stone’s Greg Fritz. “The more time that distribution and manufacturing can get from the contractor/installer, the more likely the product will be available when need. For now, the ‘Amazon mindset’ of order when you need it won’t cut it.”
Training for today and tomorrow
In order to provide that extra value, manufacturers stress LBM dealers make the best use of technology tools available to them, tools developed by the manufacturers themselves. Available to both the LBM dealer and their customers, these tools deliver immediate access to best practices, installation techniques, and training videos.
“With the shortage of installation labor still an ongoing issue, LBM dealers can continue to ensure their contractor customers are up to speed on the latest technology offerings available,” Westlake Royal’s Booz explains. “Virtual selling tools and electronic workflows such as One Click Contractor offer great opportunities for contractors to set themselves apart. Another resource is WestlakeRoyalPros.com which provides webinars and training videos that we hope are helpful for dealers as well as builders/pros.” Along with its online resources, Westlake Royal also offers a combination of virtual and in-person events such as virtual product knowledge sessions in which an LBM dealer’s sales team can get up to speed on new product lines and discuss product features and installation techniques. “We’re also getting ready to re-launch our fleet of training trailers,” adds Booz, “which makes it easier to show contractors product features and installation techniques across our vast product portfolio.”
LP recommends LBM dealers tap into its LP SkillBuilder, an online library of digital resources and trainings that detail installation techniques for LP SmartSide products. These videos are available in both English and Spanish to help meet the needs of Spanish-speaking customers.
Evolve Stone has introduced its Preferred Pro program to help train contractors and installers on its products while promoting better building practices. “The program includes in-person training by Evolve’s technical staff while proving qualified leads to participants,” says Evolve’s Fritz. “Early success is leading to high hopes for this program.”
And in the case of ProVia, it’s taking a rather innovative approach to its product knowledge training programs. The company is in the initial testing phase of a training plan that works alongside standard curricula at vocational schools. “The goal is to train students and help many get VSI certified before they graduate, helping to make them more marketable to prospective employers,” ProVia’s Jon Lapp points out. “ProVia team members will instruct in-person, hands-on training at the vocational school.”
Planning for the future
If the past two years has taught LBM dealers anything, it’s to be prepared for the unexpected. Industry experts predict shipping delays to continue through the remainder of the year, with port congestion and sporadic COVID-19 outbreaks continuing to inflict damage on the supply chain. Nevertheless, siding manufacturers are striving to provide LBM dealers with a stable product flow that delivers options for customers.
As LP’s Derek Blank explains. “We continue to see strong demand behind new home starts, finishing homes that have already been started, and a strong R&R market. We have added a new LP SmartSide mill in Maine to help meet this demand, but similar to the rest of the industry expect continued longer lead times for the foreseeable future.” It’s the wise dealer who takes these unpredictable factors to heart to best plan for what’s to come.
Michael Berger is the former managing editor for HANDY Magazine and has been writing about home improvement and construction for the past 20 years.