Study examines future demand for builders’ hardware

Astudy released this month by research firm Freedonia Group pointed to some interesting trends in sales of door, window and other builders’ hardware—notably that the demand for these products will rise 2.1 percent per year through 2012. That’s an improvement, the research firm said, on gains of 1.2 percent from 2002 to 2007.

Adjusted for inflation, sales are projected to reach $11.1 billion in 2012, although low-price imports and declining metal prices will dampen overall values.

The Cleveland-based research group highlighted locks and safety devices as two growth areas, noting that they expect those categories to account for the largest share of the builders’ hardware market—which includes residential and commercial door fixtures, window fixtures and other primary hardware components in new building projects. Demand for locks and other safety devices in the non-residential market will be lead by a desire for enhanced security in “schools, universities, hospitals and other health care facilities.” Electromagnetic locks will offer some of the best growth opportunities, particularly among property managers, the group predicted. In the residential sector, continued homeowner interest in personal safety will add to sales.

Not surprisingly, imports of builders’ hardware products are expected to rise. Imports will account for nearly 42 percent of builders’ hardware demand in 2012, up from 35 percent in 2007. Manufacturers of hardware, especially in China and other countries based in Asia, will take advantage of the region’s low-cost structure to make inexpensive builders’ hardware for export to the U.S. market, the firm predicts.

However, manufacturers of more “advanced” hardware products—specifically European manufacturers—will look to the U.S. as a region with good growth prospects. The United States, on the other hand, will look to export its higher-quality products to its NAFTA neighbors.

The study also notes that while new construction applications will continue to drive the majority of builders’ hardware sales through 2012, the softening home market means that any increase in demand will be driven more by home improvement and renovation spending.

The residential market accounted for 55 percent of all builders’ hardware demand in 2007 and will remain the leading market in 2012, the Freedonia report said. Furniture is expected to account for 37 percent of total demand of builders’ hardware in 2012, and there’s another tie-in to that market as well. Advances will be led by the popularity of home entertainment systems and home offices, which require hinges, pulls, slides and furniture locks, Freedonia predicts.

Assa Abloy on top

Door hardware specialty supplier Assa Abloy was the leading supplier of builders’ hardware in the United States in 2007, accounting for nearly 11 percent of the total demand for these products.

Stockholm, Sweden-based Assa Abloy, in its most recent financial report, noted that the “sales trend was positive for all divisions in the second quarter.” Sales totaled 8.53 billion Swedish kronor (US$1.2 billion), up 8 percent in local currencies for the first six months of the year.

While the company said sales growth prospects were “weak” in Western Europe, the group still saw “stable” sales in North America, alongside “strong” growth in Asian, African and South American markets.

Most recently, the supplier bought a stake in Korean door automation company Cheil Industry—a company with just 50 employees and sales of $21.1 million that is nonetheless representative of one of the company’s greatest areas of potential growth.

“Korea is one of the largest markets in Asia for automatic doors with innovative products,” explained Johan Molin, president and CEO of Assa Abloy. “This acquisition gives Assa Abloy a market-leading position in Korea and brings a broad spectrum of products and excellent relations to general contractors.”

For more information on Assa Abloys predictions for the builders’ hardware market, the Swedish company will hold its annual meeting on Wednesday, Oct. 22.

Assa Abloy was followed in its builders’ hardware category lead by Black & Decker, Stanley Works, Fortune Brands, Ingersoll-Rand and Leggett & Platt. Together, those suppliers accounted for 32 percent of the total market.