Bright Forecast for LBM Distributors

A number of market conditions and trends are providing tailwind for profitable growth for the $120 billion-ayear lumber and building material distribution industry, according to new Principia report.

Factors contributing to potential for profitable growth over the mediumand long-term include growing demand for housing, remodeling and commercial projects; increases in U.S. population size and age; existing housing stock profile; and favorable lending markets.

LBM distribution companies are adding complementary product lines to leverage cross-selling opportunities with existing customer relationships. Distributors and dealers are also looking to "out-of-category" products to reach customers in brand-new areas that are not traditional LBM markets. An increasingly larger segment of LBM distribution has manufacturing capabilities, including roof trusses, wall panels, and stair production, with installation service available.

In addition, value-added services such as direct takeoffs from building plans, quick-turn jobsite deliveries, and advice on project design are offered to generate revenue and build customer loyalty. Merchandising, including product showrooms and vignettes, are also a growing trend among more progressive distributors and pro dealers to reach builders and the trades, as well as property owners, to grow their businesses.

"Distributors and dealers are carefully reviewing which products represent the best margin opportunities and how to support these products with current and prospective customers," said Principia's Ken Jacobson. "This program will pinpoint where and how channel dynamics are likely to impact strategies for both manufacturers and distribution, and where alignment opportunities exist."

MiTek Launches New Division

MiTek Industries, Chesterfield, Mo., has formed the MiTek Builder Products division, unifying its growing list ofproducts and services for the residential and commercial construction sectors.

The new division integrates a number of businesses, products and brands, including USP Structural Connectors, 24 Tie-Down System, Hardy Frame Shear Wall System, design software for decks and USP connectors, and Sapphire Supply estimating and design module for LBM suppliers.