Manufacturers step up investments
In the past few weeks, a diverse variety of manufacturers that serve the hardware and building supply space have been drawing up blueprints or cutting ribbons at the entry of new facilities.
This recent surge in the investment in facilities includes GAF Energy, opened a new Timberline Solar manufacturing facility in Georgetown, Texas on May 1. On top of that, the company plans to build a new state-of-the-art solar roofing testing facility in a to-be-determined location.
With demand rising for its core PVC building products, Versatex Building Products opened a new, 96,500-square-foot plant in Aliquippa, Pennsylvania, doubling the company’s production capacity.
And in Valley, Nebraska, 3M reported a new 90,000 square foot expansion at its facility in Valley, Nebraska, to increase the plant's manufacturing capacity.
More recent facility investments are either in the works or up-and-running at Zurn Elkay Water Solutions (Erie, Pennsylvania and Commerce, Texas); Eagle Materials (Laramie, Wyoming); and Roseburg Forest Products (Dillard, Oregon).
In the last two weeks, Metl-Span opened its insulated metal panel manufacturing facility in Brigham City, Utah; and Stimson Lumber Company said it would invest $50 million into a new high-speed sawmill line at its facility in Forest Grove, Oregon.
What’s behind all the investment?
"Recent manufacturing expansion are not just made in America capacity expansions, but strategic made-for-America investments,” said Matt Fish, managing director of Stax, a global consulting firm. “These investments come on the back of strong earnings and represent meaningful production modernization, a pivot to more advanced building material demand and confidence in continued infrastructure spending.”
At Versatex, the specific reason to expand was the desire to enter the siding market, said Rich Kapres, vice president of sales and marketing.
“I can’t really speak for all other manufactures but I do suspect that we are seeing folks reacting to what occurred during Covid when there were availability issues throughout the industry and the need for more capacity during spikes in demand.”
He added that now seems to be a good time invest in the building product sector in general.
“Given that we have a very low supply of housing and a pent up demand being held up due to interest rates and inflation, when a correction occurs and things loosen up I believe we will see a serious demand increase,” Kapres said. “If you are not investing now you will not be able to react when that occurs, which I think could be in the next 6-12 months.”
