Published on April 21st, 2016 | by UC&D Magazine0
Strong Economy Fueling Growth in Curtain Wall/Glazing Market
Abundance of work means better overall profit margins; lack of skilled workers remains a major industry concern
In the current business of fabricating and installing glass facades in Utah, a few things are clear. The market is strong, labor is tight, and innovations in energy conservation and aesthetics are, quite literally, changing the face of the business.
In a recent round of interviews, key players in Utah’s curtain wall and glazing industry shed light on the state of the market in recent years.
“There is a lot of catch up happening after years of not developing. 2015 was really the year with the first sign of relief from the recession,” said Derek Losee, VP of Architectural Business Development at Salt Lake-based Steel Encounters. “In Utah, this industry is seeing a lot of growth in Midvale, at Thanksgiving Point, and we’re seeing an especially significant amount of work in Utah County.”
Ted Derby, Business Development Manager at LCG Facades of Salt Lake agrees. “We have seen an increase each year for the past couple of years, but in 2016 there is more work than we have seen in several years.”
“We’ve doubled our volume in 2015 compared to 2013 and 2014 and our current backlog is $10 million,” said Tom Tromley, Managing Member at Skyview Glass in Orem. “For a period, we weren’t bidding on new projects because our work schedule is currently full through July.”
Though there has been considerable growth in the sector, it hasn’t necessarily correlated with decreased competition in the bidding process.
“In the last few years, there are fewer competitors bidding a project, but I’m surprised at how highly competitive the bids still are,” said Losee
Derby offered an explanation for why this might be the case. “During the recession, we were all looking for projects to keep our crews working,” he said. “We learned to be more competitive and now that we don’t have to be, we are still adjusting.”
Tromley, however, has noticed a change. “There is so much work that the market is not as competitive as it has been in the past,” he said.
The main segments driving current growth are health care, corporate offices, and higher education facilities.
LCG Facades works in all three segments and specializes in different types of exterior skins, such as terracotta and dimensional stone, in addition to glass.
“Here in Utah, we’re definitely seeing health care taking real strides in construction and development,” said Derby. “It is probably attributing to about 35-40% of our sales. The next largest sector is the construction on college campuses, which attributes another 35%. The balance is office buildings.”
Skyview Glass, based in Orem, is especially active in the Thanksgiving Point area with six jobs at various stages of construction there. They are also working on projects in the education sector on both the University of Utah and Brigham Young University campuses.
Steel Encounters, the firm behind the glass canopies of City Creek and the glass roof of the Nu Skin building in Provo, it witnessing similar trends. “Health care and corporate offices are seeing the most development in the state,” said Losee.
No matter the type of building, all of the firms share one thing in common—a focus on pre-fabrication.
“Pre-fabrication is more efficient and allows for better quality control. It’s 90% of what we do,” said Tromley, who has 10-12 people out of his total staff of 80 working in the fabrication shop at all times. “In fact, we’ve done projects where 100% of the work has been pre-fabricated, shipped to the site, and installed directly.”
At Steel Encounters, roughly 55 members of the 160-person architectural division are in the fabrication facility, with 80 in the field and the remainder in the office. “Everything is pre-fabricated to some extent,” said Losee. “About 25-30% of our units are fully assembled in advance and ready for installation by the time they leave the fabrication facility.”
At LCG Facades, the staffing ratio is similar with 45 fabrication experts, 85 field installers and a mix of sales, engineering, accounting, and administration making up the company’s 200-person staff.
Speaking of staffing, another similarity across all three companies is the notable shortage of skilled labor in the market.
“The labor market is very tight. We lost of a lot of people in construction during the recession and it’s tough to
attract good talent in our marketplace when wages in neighboring cities are often higher,” Losee said, explaining factors leading to the shortage locally.
To attract new talent, Steel Encounters created a recruitment video, which was shown before screenings of the recent Star Wars release, albeit with limited success given the current market conditions.
With a similar goal to recruit and retain talent, LCG Facades started an inhouse training program about a year ago. “It became very apparent that as more and more construction was developing in the valley, we were going to be limited in the size of our growth by the ability of our installers,” said Derby. “Labor was far and away the biggest limiting factor we had.” Now, 39 installers attend the weekly night classes, which provide a path to wage increases related to training and skills.
Tromley echoed concerns about the tight labor market. “We could take a lot more work if I could get the people to do it,” he said. “We just need bodies right now. It seems everyone who wants a job already has one.”
In contrast to the difficulties of the current labor shortfall, the strong market does have a considerable upside. It has paved the way for market innovation in both energy conservation and design.
“Eight or nine years ago, glass was a shrinking percentage in the overall skin of the building,” said Derby. “The primary concern was energy. At the time, the solution for a lot of energy consultants was to reduce glass and increase brick and mortar. Since then, the glass industry has responded with energy-conserving technology to meet that challenge. In recent years, we’ve seen a stabilizing of glass-to-wall ratios with about 35% being glass and the balance being non-visible wall.”
These energy-saving technologies include glass that both preserves energy and creates it.
“Over the past few years, we’ve seen the acceptance of dynamic building skins that change with the conditions of the day,” said Losee. “The glass on the east side of the building automatically darkens in the morning and then as the sun moves, the glass matches its movement. This technology helps primarily with energy savings and occupant comfort.”
“A good example of energy-producing glass is in the new Salt Lake City Public Safety Building,” said Derby. “Photovoltaic glass is integrated into the structure and there is an array of solar panels on the roof, which has made it a net zero building.”
Steel Encounters and LCG Facades both noted another rising trend — the increased use of large-format glass.
“Four to five years ago, developers wouldn’t even consider large format glass because of the expense. Now we see it more and more,” said Losee.
“Jumbo-size glass is an architectural trend that has developed in the last three to four years,” said Derby. “The real trend leader has been the Apple stores. They are using very large lites of glass to give the building an open, expansive look.”
Open and expansive seem appropriate descriptions of the curtain wall industry in Utah as well. Though the labor shortage reflects a trend felt in much of the construction industry, innovations and a rise in development are clearly opportunities for those specializing in glass facades to shine