Blind and Shade Manufacturing
Business for Sale Industry Economics
2005 - 2021
2021 - 2027
The Blind and Shade Manufacturing industry has dropped over the last five years and is expected to continue to drop over the next five years. In comparison to other industries in the production of home products, the sector has faced instability during the last several years.
Since the last economic collapse, though markets have seen a significant increase in both size and growth, consumers have become more cautious and focused on methods to save money. With respect to the expansion of the market, current homeowners have not updated blinds and shades, while new purchasers have gone with cheaper, lower-quality options, which has resulted in the expansion of the market being hindered.
Though confidence and spending rose in the second half of the year, they did not have the impact of helping stimulate demand for industrial goods as in previous years. Despite the fact that in 2020, the COVID-19 (coronavirus) pandemic will negatively impact the overall economy, consumer spending would nonetheless be significantly affected.
While industry income was almost halved in 2020, in 2021, industry revenue is predicted to climb at 1.9 percent due to the passing of the pandemic and the eventual rise in residential development. Based on this volatility, total industry sales is predicted to shrink at an annualized rate of 1.4% over the next five years, with revenue dropping to $2.3 billion by 2021. Because downstream demand continues to expand, the sector is predicted to rise over the next five years, although unfavorable tendencies remain.
For instance, an increase in the number of house starts is projected to increase demand for window coverings, while a slowing house construction rate is projected to have a negative impact on industry performance. There is a lot of increase expected in the number of Americans over the age of 65, which is likely to be beneficial to the business. As the numbers of this age mature, it is predicted to increase renovation activity and furnishings purchases, offering a significant boost to industry sales.
Due to these predicted patterns, revenue is expected to rise, resulting in a yearly 2.1% increase of $2.6 billion to $2.6 billion at the conclusion of the five-year period. Even though economic growth seems good, operators are nonetheless expected to depart the market. Enterprises of all sizes will likely combine and purchase failing small businesses that are under the gun owing to rising input prices and more competition from foreign manufacturers, resulting in an increased level of industry consolidation.
Comparing this with the prior forecast of 285 manufacturers through 2022, even though the economy will continue to recover and demand for blinds and shades from downstream industries will increase, the number of businesses is expected to shrink at an annualized rate of 0.1% to 283 over the next five years. On the other hand, due to increased volatility in commodity prices, profit in industry is likely to stagnate.
While annual revenue has seen an overall fall over the next five years, revenues for the Blind and Shade Manufacturing business have been unpredictable during the period, but overall have decreased, as customers sought for methods to save money and postpone blind and shade upgrades. the overall level of consumer confidence improved by 20.9 percent in 2017, while expenditure on goods and services rose as well. Also, private nonresidential development started expanding early during the era following a long, weakened period of preceding circumstances, which aided expansion in the support sector.
While there was a substantial amount of volatility, the sector has usually profited from various factors that happened earlier in the time. Residential construction has seen a compound annual growth rate of 2.5% over the next five years. The private nonresidential construction value is predicted to shrink by a compound annual rate of 2.0% during the same time. When the construction industry expanded and the economy improved, it led to falling national unemployment, which translated into higher consumer confidence and greater disposable income.
Despite these declines, many of these patterns changed in the wake of the COVID-19 (coronavirus) pandemic, due to the fact that companies were forced to lay off staff, resulting in an increase in unemployment and a decrease in consumer confidence. While the pandemic is starting to dissipate, and the economy is predicted to gradually recover, in the five years leading up to 2021, industry revenue is predicted to fall at an annualized rate of 1.4% to $2.3 billion. The projected rise in construction growth, however, will most likely lead to a rebound in the business. The sector is forecast to have a revenue gain of around 1.9 percent.
The situation has only become worse since the turn of the century. Demand circumstances have, on the other hand, shown significant improvement during the time. Manufacturers have found it challenging to compete with rising global competition during the previous five years due to increasing imports. Employers operating in low-cost countries such as China and Mexico do not have to comply with the same labor rules as those located in more expensive nations.
Manufacturers have the ability to offer their items at prices below industry operators can afford since they are able to pay cheap salaries in these nations. Because of this, overseas competition has had little impact on industry sales. Due to the value of industrial imports increasing at an annualized rate of 5.2% to $2.1 billion over the next five years, the level of annual imports has been estimated to rise to $2.1 billion in 2021.
In the meanwhile, the value of exports has fallen 1.5% every year, down to $43.4 million at the end of the year. Based on data from the World Trade Organization, economists predict that imports will meet 48.2% of domestic demand in 2021, while exports would account for just 1.9% of industry income. While the value of exports has fallen, this decrease has been somewhat compensated by the devaluation of the US dollar.
Throughout the last five years, the value of the US dollar has depreciated at an annualized rate of 0.7%, which has made U.S. exports substantially more inexpensive in international markets. Notably, the extent of the trade deficit (the difference between imports and exports) was worse in 2020 than it had been at any point in the previous two decades, owing to the Coronavirus Pandemic which resulted in great economic misery and severely reduced demand from downstream markets. Even though trade levels are likely to increase when the epidemic passes, the demand for downstream products recovers fast, therefore trade will rise significantly in 2021.
When dealing with volatile material prices, producers will have to contend with additional charges. Due to significant price increases in the window and blind input materials, such as plastic, wood, and aluminum, costs have increased considerably over the previous five years.
When it comes to the price of lumber from sawmills, it jumped 7% in 2018 as a primary example. With regard to this level of volatility, it is difficult for manufacturers to foresee and they are often not prepared to increase their prices in time to prevent incurring a loss as a result of fluctuations in the price of the raw materials used. Also, if they try to raise their pricing in the hopes of retaining profitability, they’ll have to contend with rivals who are always ready to assist wholesalers to locate better deals elsewhere.
On the other hand, despite the dramatic changes in raw material costs, the overall industry profit margin has remained consistent since the start of the present period because of the higher and more constant demand from the majority of the sector’s downstream retail and wholesale markets. According to market analysts, the average sector profit margin, calculated as profits before interest and taxes, is predicted to account for 4.2% of sales in 2021. As a result, profit has declined by practically every year of the time period.
While demand for blinds and shades has steadily improved in conjunction with the recovery of residential and nonresidential construction markets, industry operators have had to adopt several cost-cutting measures in order to meet the challenges presented by import competition and material costs that have been both unpredictable and volatile.
Although this seems like a great idea in theory, in practice many business groups have found it challenging to achieve cost savings by merging or eliminating unproductive factories that can’t compete with cheaper imports. As a consequence of this tendency, the number of industrial firms has shrunk by an annualized rate of 1.6% per year, with 285 businesses expected to have gone out of business during the next five years.
This phenomenon has been exacerbated by a huge number of acquisitions and mergers that have occurred among the top industry players. Some huge corporations have bought up smaller businesses in order to harness economies of scale, allowing them to cut per-unit manufacturing costs and enhance profit while simultaneously expanding the number of employees they have.
Wage growth has averaged 0.9% annually, with about $576.5 million in new yearly earnings projected by 2021, caused by the previously mentioned mandatory furloughs. It seems that two of the country’s top firms, Hunter Douglas NV and Springs Window Fashions LLC, have both taken part in this pattern of consolidation over the past.
According to several forecasts, the sector of manufacturing goods for the blind and the disabled is expected to rise over the next five years due to increased demand for building and remodeling services. It is expected that commodity price volatility will continue to have an impact on the operational expenses of the sector.
As a consequence, research predicts that industry profit will expand at a slower pace over the view period as increasing demand for industrial goods is offset by accelerating prices of key inputs such as plastic. While there is concern over the TWI’s potential decrease in value, it’s believed that a projected depreciation in the TWI over the next five years would help the sector, bolstering its export sales in international markets.
Nonetheless, a normalized housing market is projected to have a little restraining effect on the expansion of industrial activity as the number of new building projects declines. There is a rise in expectations that revenue will increase in the long term, due to the trends and recovery from the COVID-19 (coronavirus) pandemic. It is anticipated that revenue will rise at an annualized rate of 2.1% over the next five years, rising to $2.6 billion by 2026.
The five-year recovery period from the start of the recovery in 2011 to 2021 saw an overall sluggish housing market in the US, with residential construction activity remaining largely unchanged until the recovery experienced a strong comeback during the current five-year period. This return to form is contingent on efforts to combat the MERS coronavirus pandemic.
For the same reasons, research predicts that industry revenue will be growing at a slower and steadier pace over the next five years due to a downturn in one of the sector’s major markets. However, given that the typical construction timeline for new homes can range from three to twelve months, as well as the fact that windows are typically purchased after new homes are complete, the market for industry products is expected to rise during the outlook period as more and more housing projects are completed.
Non-residential construction tends to follow the same trends as residential development but tends to be behind by an average of one to two years owing to commercial structures needing longer lead periods. It is estimated that due to increasing interest rates over the next five years, growth in the value of private nonresidential development would be impeded, with new projects becoming less accessible to finance.
A bright point for this business has been the baby boomer generation, which is anticipated to increase over the next several years since the group already in retirement ages is still growing. This group of millennials is particularly likely to be involved in long-term initiatives, such as home improvements, window coverings, and general maintenance work since this generation tends to reside in older houses. Additionally, as the overall market for house improvements and blinds and shades will be on the rise, this will likely lead to increased income for the business.
It is expected that during the next five years, the sector will continue to expand worldwide. However, a reversal of course in the TWI is expected to impede the rate of industrial import penetration. Although the import value is predicted to rise by an annualized rate of 1.8% to $2.3 billion over the next five years, due to a declining currency that would likely boost the price of foreign items for U.S. customers, the growth is anticipated to be slower than previous projections.
Still, imports are forecast to take up a large proportion of the market over the next five years; by 2026, imports are forecast to account for 47.7 percent of the total demand. Conversely, a declining dollar is anticipated to lead to an increase in local exports, which are predicted to become less costly for overseas customers. This also means that the value of exports is likely to fall at an annualized rate of only 0.5% to $42.3 million each year over the next five years, and this amount is projected to constitute 1.7% of revenue in 2018.
Window covering manufacturers should expect to make various adjustments to comply with changing regulations over the next five years due to the Window Covering Manufacturers Association’s announcement in January 2018 that a new window covering safety standard was approved by the American National Standards Institute (ANSI).
This standard requires window covering products sold within the United States to be cordless or have inaccessible or short cords. Ensuring production efficiency meets new criteria may result in increased operational expenses for industry operators as they fine-tune their production processes, impeding advances in profits.
Not only would increasing material prices limit manufacturers’ ability to alter their operating expenses, they will also make it more difficult for manufacturers to leverage their buying power and safeguard their profitability. Although there is expected to be an increase in demand, it is predicted that industrial profit, defined as earnings before interest and taxes, would rise by a very little amount, contributing 4.5% to the growth of 2026 profits.
Furthermore, research projects that industry operators will fall by 0.1% each year over the next five years, resulting in a decline from 283 businesses to 278 by 2026. Though most smaller firms that have been faced with harsh market circumstances throughout the last five years have had to go through a process of consolidation, bigger, more successful corporations are unlikely to see an increase in their total enterprise value.
At the same time, employment in the sector is likely to rise modestly as bigger firms continue to develop. Thus, industry employment is expected to rise at an annualized rate of 1.3% over the next five years, which would lead to a total of 11,409 persons employed by 2026.
Manufacturers in this area are responsible for manufacturing window treatments, including Venetian and other window blinds, shades, curtain and drapery rods and poles, and other associated fixtures. After the completion of manufacturing, window furnishings are given to wholesalers, retailers, and contract outfitters. Once they have been moved to the residential, commercial, and institutional markets, they are sold to those respective sectors.
The Curtains and drapery business is not included in this list. As is typical for mature industries, the industry has experienced its primary stages of development, which have resulted in little growth, substantial product saturation, and significant market acceptance. The market is substantially consolidated, controlled by two main companies that control more than 40% of the total market share.
While certain niches may emerge within the sector, the sector itself nevertheless focuses on producing a wide variety of distinct items. This has been further emphasized by the fact that acceptance of new technologies has mostly been focused on major manufacturing companies.
The large operators have all sought to purchase smaller enterprises to expand their market share, and hence the number of independent industry operators is predicted to fall at an annualized pace of 0.9% per year for the next decade and a half. To help cope with the increased competition from overseas operators as well as the volatility in input prices, many industrial enterprises have undergone restructuring processes to help decrease costs and preserve profit margins.
This leads to the following conclusion: The number of industrial establishments has declined at an annualized rate of 0.7% throughout the decade before the study. With a general 0.4% yearly growth, the whole industry’s contribution to the economy is expected to rise annually, while the bulk of the estimated rise in the next decade will stem from the coronavirus, which will see much lower growth in 2020.
By taking the long view, it is anticipated that the GDP of the United States grows at a yearly pace of 1.9 percent. In other words, this means that the industry will underperform compared to the domestic economy as a whole.
There is a low degree of capital intensity in the blind and shade manufacturing business. For per $1.00 spent on labor, the industry expects in 2021 that $0.04 for capital investment will be spent.
A significant share of industrial expenditures is allocating to buying machinery as well as trucks and trailers for transportation for the offices and plants to whom the items are supplied, which are made items and fittings and devices.
For the biggest corporations in the business, depreciable asset statistics have increased during the last five years.
Meanwhile, in this area, small and medium-sized enterprises have increased expenditures, where it is possible to match the major actors in the market.
Moreover, more technologically advanced items, such as solar shades and mechanically driven items have been developed in the sector.
The production of these items is more expensive and the volume must be increased to satisfy customer demand. In recent years, while other businesses have increased capital costs, blinds and shades are still producing high-intensity work, which maintains the industry’s average capital intensity low.
Much qualified staff must complete the production process manually. For smaller operators, which constitute the great bulk of the business, this especially applies.
Over 60.0% of the industrial operators, for instance, are predicted to employ less than 10 people and in general small enterprises cannot invest big financial resources to buy big-scale gear.
Moreover, the development of higher-end products, which are becoming more popular among rich, eco-friendly consumers, needs considerable work and manufacturing. The industry wages are quite high due to these variables.
There has been moderate volatility in the production sector Blind and Shade. In 2017, industry sales increased by 2.6 percent in the five-year period, while in 2018 sales rose by 3.3 percent. In general, sales for this sector are susceptible to variations in family income economic activity.
As window coverage is frequently seen as discretionary products, changes in consumer discretionary income can either discourage or stimulate the purchase of window coverage. The good factors associated with consumer sales, including decreasing unemployment and increasing disposable per capita revenue, have consistently increased in recent years.
Available revenues are one of the industry’s most major drivers and have constantly increased until 2020 when coronavirus became prevalent and so have reduced revenues by 6.2 percent in 2020. Depending on the strength of the US housing market, industry income will likewise change.
Fenster coverings are home commodities, hence the demand for Fenster covers tends to decline if dwellings are not built or sell. Over the past five years, the housing market has continued to recover significantly, aggressively over several years.
Due to robust macroeconomic conditions, increased affordability of housing and improving family finances, the value of residential constructions is predicted to climb by an annualized 2.5% during this period and ensures sustained demand in industrial products.
As prices grow for industry revenue, the blind and shade prices typically require additional alternative commodities, such as tapestries and cloths, which are not included in the industry. Price volatility is caused by shifting price and shipping costs for the inputs utilized in industrial goods.
During the current time, significant price fluctuations in plastics and resin have led to a fluctuation in industry sales. Finally, trends in fashion have an extra effect on the industry’s yearly revenues, while not as quantitative, depending on the style of specific marks, or product kinds.