Specialty Firms Remain Strong

Despite tightening construction markets around much of the country, most remodeling firms that specialize in a few key areas are still going strong. In many cases, these firms are going strong because the new construction market is weakening.

“New building is slowing down in our area,” says Scot Hayes, owner of New York Sash in Whitesboro, N.Y. (No. 360). “But we’re seeing a corresponding “cocooning” effect where people are spending more money on their existing homes rather than building or buying new.”

Higher interest rates and rapidly rising energy costs are surely two of the main factors for the new construction slowdown. But many remodelers see the spike in energy and fuel prices as actually helping their business. Mike Lumary, a partner in Clearview Home Improvement (No. 157) in Anaheim, Calif., says a great majority of their clients are investing in energy-efficient upgrades on their existing homes because the cost of buying or building is skyrocketing out in Orange County.

“Because property is so valuable out here, people are continuing to put their money into their biggest investment,” says Lumary. “They have no apprehension about continuing to invest in their existing homes.”

Unfortunately, not everyone is enjoying those same conditions. Like many remodeling firms in parts of the Midwest, Wrightway, Inc. (No. 494) out of Fond du Lac, Wis. is reporting a continuation of a slowdown that began at least a couple years ago. President and owner David Wright says his company has shown a loss “for the last few years,” despite increased investment in marketing. “Our siding division is our slowest right now,” says Wright. “Window replacement is plugging along pretty well, and that’s what is saving us right now.”