By Tommy Knappich, Johns Manville General Manager of Building Insulation
We’ve heard customers ask, “What is Johns Manville’s outlook for 2019?”
Before looking into the future, I’d like to reflect on the past year – most notably, recognizing the impacts of the overall U.S. economy:
The fiberglass market was up 4.4 percent in pounds shipped through Q3 2018 when compared to Q3 2017.
GDP growth in the second and third quarters was 4.2 percent and 3.5 percent, respectively.
From a headwind perspective, housing starts declined slightly during Summer 2018 and, as a result of the slight decline, many building products distributor and contractor stocks lost over 50 percent of their value.
Despite that, 2018 was a solid year for the insulation industry, with many contractors and distributors stating that it was their best year since 2006.
Over the past two months, we’ve met with architects, building owners, builders, contractors and distributors to discuss their outlook for 2019. Builders are still very confident – wages are rising, interest rates seem to have stabilized, unemployment is at record lows, and household formation continues to see growth. All of this translates in housing construction edging higher.
Many contractors have told us that they have record backlogs going into 2019. But a challenge for the industry will be continued inflationary pressure on materials, services, wages and transportation. Additionally, continued transportation inflation will be a key area to watch out for in 2019.
So, “What is JM’s outlook for 2019?” We see continued mid-single digit growth in the insulation industry through 2019. JM is continuing to make investments into our insulation plants and new products as we see continued industry growth. Slow, steady, consistent growth, similar to 2018, is the outlook.