Month: May 2022

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Top LBM Dealers See Dramatic Growth Alongside Supply and Labor Challenges

LBM dealers, lumberyard, warehouse

The 2022 LBM 100 from LBM Journal and the Construction Supply 150 from Webb Analytics are not just lists of the leading LBM dealers in the country—they’re a reflection of the state of the greater construction industry and its challenges and opportunities. As such, it’s not surprising that dealers reported dramatic sales increases all while navigating a series of unprecedented obstacles.

“Though the nation’s dealers continued to navigate the pandemic in 2021, the challenges that accompany it were slightly different,” LBM Journal said. “Pandemic-amplified labor shortages and continued supply chain constraints and price hikes have only worsened and have recently been joined by rising inflation and fuel costs, due in part to the war in Ukraine. At the same time, booming residential construction activity continued throughout 2021, forcing dealers to channel their problem-solving even more as they tried to keep materials in customers’ hands, deliveries on time, and expenses down.”

Growth indeed. The magazine reported that all but one dealer on the list experienced sales gains in 2021, with 29 growing 50% and 10 companies experiencing gains of 75% or more. Some of the growth was driven by acquisition, but much of it can be attributed to booming construction activity.

Skyrocketing lumber prices also played a role, Webb Analytics noted. “Largely because of softwood lumber’s 116% price increase between January 2020 and January 2022, according to the Producer Price Index, lumberyards with manufacturing operations saw their revenues shoot up 58.6% in 2021 from the year before,” the analysis said. “This group—one of five subcategories tracked in the CS150—gets a lion’s share of its revenue from sales of framing lumber as well as from manufacturing wood-based components. Thus, a huge amount of what these dealers stock sold for drastically more than it did just a few years ago.”

Here are other notable trends from this year’s LBM Journal 100 and Construction Supply 150:

• Ongoing labor woes: Not surprisingly, LBM dealers are feeling the labor strain like elsewhere in the construction industry and the rest of the country overall. “This year, 84% of companies indicated that recruiting, hiring, and retaining employees is a challenge, up 7 percentage points from last year,” LBM Journal reported. “The most difficult positions to fill, by a significant percentage, were drivers and yard workers.”

In response, dealers said they are implementing a number of efforts, from mentoring programs to pay and benefit increases.

• Price and supply: Also expected, dealers cited price hikes and tight supply as another top hurdle. “Our biggest challenge currently is extended lead times and the constant rising costs,” Charlie Parks, owner and vice president of Parks Lumber & Building Supply, told LBM Journal. “Both of these challenges make it extremely difficult to play a consistent and reliable role in our customers’ attempt to get jobs under contract.”

Yet dealers still came through for their customers. “Priority customer retention was over 95% during extremely unprecedented times in which keeping the customer fulfilled was more difficult than ever,” Parks said.

• Acquisitions abound. The trend of dealers gobbling each other up continued. Webb Analytics reported 156 deals covering 693 facilities in 2021. At the same time, 167 new facilities opened.

• Ecommerce growth: Webb Analytics said that 72.7% of the Construction Supply 150 are allowing customers to access bills online, and 58.6% are allowing online payment, a significant increase from 56.7% and 42.3% the previous year, respectively.

On the other hand, online sales are still sluggish, LBM Journal found. “Compared to 2020, fewer LBM 100 dealers—just 31%—say they conducted sales online last year. However, among those companies, more are seeing greater chunks of sales online: 3.9% are seeing 25% to 49% of sales take place online, up from 0% the year before, and 3.9% are seeing 10% to 24% of sales take place online.”

View the full LBM Journal 100 here and download the Construction Supply 150 here.

Image: iStock.com/Foryou13

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Cost vs. Value Report: Exterior Projects, Including Manufactured Stone Veneer, Deliver Most ROI

Versetta Stone manufactured stone siding

Once again, exterior projects continue to deliver the best return for homeowners’ investment, according to Remodeling 2022 Cost vs. Value Report. Within that, manufactured stone offered the second-best ROI.

The 35th annual study by Remodeling compares the average costs of 22 remodeling projects with the value those investments will retain at resale. Nine of the top 10 projects delivering the best return were exterior, with manufactured stone taking the second spot, with 91.4% ROI, behind only garage doors (93.3%). Vinyl siding also performed well, with the fifth-best return of 67.2%.

For manufactured stone, the study looked at the cost recouped from replacing a 300-square-foot band of vinyl siding from the bottom third of a home’s front façade with manufactured stone veneer (such as Westlake Royal Building Products’ Versetta Stone), along with sills, corners, and address block. Manufactured stone’s ROI was slightly lower than last year’s study, which showed a 92.1% return, but was 20 percentage points ahead of this year’s No. 3 project, minor kitchen remodel (71.2% return).

“Despite sharp cost increases in 2021, the decline in overall ROI in the 2022 report was a modest 1.2%, proving the resilience of the remodeling market,” Remodeling magazine said.

The other exterior projects in the top 10 were fiber cement siding replacement (68.3% cost recouped); vinyl window replacement (67.5%); wood window replacement (66.3%); wood deck addition (64/8%); steel entry door replacement (63.8%); and composite deck addition (62.1%).

“‘Curb appeal’ and ‘first impressions’ are strong concepts in real estate because they have a surprisingly big impact on how much money prospective home buyers are willing to pay for a home,” the magazine explained. “Prospective buyers who see a ‘buttoned up’ exterior form the impression that the house is in good shape—or, as we all like to say, ‘has good bones’—and they proceed to fit all the new information they learn once they walk through the front door around these positive impressions.”

Manufactured Stone Delivers Most ROI in Two Regions

When the Remodeling 2022 Cost vs. Value report is broken down geographically, manufactured stone shows similar levels of ROI as on a national level. In two regions, however, manufactured stone delivers the most return among all projects: South Atlantic (Maryland, Delaware, Virginia, North Carolina, South Carolina, Georgia, Florida), with 92.5% ROI, and West North Central (North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri), with 93.6% ROI.

Versetta Stone offers remodelers an easy way to leverage the ROI opportunity of manufactured stone. The siding panels provide the beauty and texture of authentic stone masonry in a panelized, mortarless format that can be installed easily by traditional carpenters and siding contractors using nails or screws. Each lightweight panel covers 2 square feet and features a built-in rainscreen. Browse profiles and colors here.

See the full Remodeling 2022 Cost vs. Value Report study and associated trends at www.costvsvalue.com.

(Remodeling 2022 Cost vs. Value Report: © 2022 Zonda. Complete data from the Remodeling 2022 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.)

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Celebrate National Remodeling Month With Helpful Tools & Tips

National Remodeling Month 2022

May is National Home Remodeling Month, the NAHB’s annual celebration that spotlights the remodeling industry, recognizes the expertise of remodeling professionals, and showcases the myriad benefits of hiring a professional remodeler. Westlake Royal Building Products is proud to be a sponsor of the 2022 event.

For National Remodeling Month, the NAHB encourages remodelers to leverage tools and tips to promote the industry through the local press, social platforms, and in-person fairs, seminars, and tours. Available resources include social media posts, web banners, press releases, fact sheets, and other materials, along with government proclamations, customizable educational articles, and op-eds. Get started with their Step-by-Step Guide here, get promotion tips here, or access downloadable promo materials here.  

As part of its sponsorship, Westlake Royal Building Products is hosting several events for NAHB members during the month of May, including:

• Shop Talk session featuring Chris “CJ” Johnson, Director – Product & Marketing – Siding, Westlake Royal Building Products, discussing the topic of product warranties.

• Webinar “Addressing Multi-Faceted Needs in AIP & UD Renovations,” May 18, which will address multi-faceted needs in aging-in-place and universal design renovations (Sign up here)

Along with professional tools, the NAHB provides a consumer resources portal, with tips on how to choose a professional remodeler, links to find a remodeler in their community, and design trends.

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3 Google Ads Tips and Tricks for Contractors

When marketing your business to acquire and retaining customers, you can’t always rely on traditional marketing efforts such as print ads to get your business and brand in front of homeowners looking for your expertise. Leveraging today’s digital tools is a necessity, and adding Google Ads to your marketing toolbox can help you acquire more business.

If you’ve already taken this important step, here are three simple strategies to help boost the effectiveness Google Ads can have on your business.


1. Use More Keywords in Your Ads

Simply put, Google Ads allow you to advertise and promote your business, products, and services online when users search relevant keywords. The more keywords you incorporate into your ads, the better traffic and leads you could receive.

Think about what you and your customers use to search for products or services. Make a list and match it to what you are using today to ensure you are getting the most out of your ads.

For example, let’s say one of your services is siding installation on residential homes. Adding “Siding Installation” to your copy can help make your ad more effective. The copy should flow naturally as well.

Using negative keywords can also help optimize your campaign. For example, telling Google to exclude keywords like “DIY siding installation” helps to narrow traffic to those truly looking to hire a contractor. It also helps avoid paying for ad views by those not interested in hiring a pro.

2. Buff Up Your Landing Page

Once your ads are working and driving potential customers to your site, it’s time to make sure they are landing exactly where they should on your website and that it’s easy for them to take a further step in the customer journey.

Let’s take the Siding Installation example again: Once they find and click on your ad, direct them to a page that talks about what makes your services unique—e.g., no callbacks, top-notch customer service, etc.—and include that at the top of the page.

And be sure to include a clear call to action. Keep a fillable form at the top of the page; making them scroll or click around the page will only create frustration. Ensuring the form is clear, concise, and short will encourage more users to fill it out. Name, contact information (email or phone), and the type of project should be all you need to get started. Asking too many questions or making the form too long and time consuming will turn off your potential customer.

3. Take Advantage of Geo-Targeting

When someone uses Google to search for a contractor, it provides location-based results in two different ways. First, if someone searches “home exterior contractors in Pittsburgh,” Google will provide a list of contractors that match that keyword phrase and sort it by their location. Alternatively, if someone just searches “home exterior contractors” without defining their location, Google will still provide a list of results based on businesses that are near the person searching.

If you’re like many contractors, you likely have specific service areas. When you’re creating Google Ads, try to include the specific city where you’re looking to acquire new customers.

Using this tactic regularly with your ads can help you get on the short list of contractors Google will offer to people who are searching in your area. You can even take this tip further by asking past customers to leave a positive Google review for added authenticity.

Once your Google Ads are set up and running smoothly, regular check ins on their performance are key to ensuring ongoing success. The great thing about digital is you can change it immediately and in real time to get the most out of your marketing investment.

Westlake Royal Building Products’ portfolio of siding, trim, stone, and roofing brands offer a diversity of styles and options to meet the needs of your buyers’ shifting tastes and needs. Learn more here.