Putting your head in the sand has never been a successful strategy for man or beast. As a person who is responsible for both the daily operation and strategic direction of a large steel framing manufacturing business, I have great concerns regarding the future of our industry. There are a number of issues on the horizon that not only impact my company but all steel framing manufacturers, suppliers and contractors in the value chain.
When my career in the steel framing business started in the ’80s, the industry was in fantastic shape and growth was inevitable. We were in a bull market. Flat rolled steel costs were very stable and would continue that way for another decade. Aided by our low cost and price stability, steel framing was beginning to dominate the commercial market for curtainwall and drywall framing. Load bearing construction was at its beginning and looked like there was a tremendous opportunity. To top it off, all the stakeholders-steel mills, processors, steel framing manufacturers, distributors and end users-believed that we could capture a significant portion of the U.S. residential wood framing market. The future for steel framing was loaded with opportunity and strong growth for years to come. Indeed, our future was limited only by our imagination.
Times Change
Now move forward to 2011. Twenty-five years later, our hopes for expanding into the residential market have waned. The market for load bearing applications suffers from a lack of promotion and momentum. Our core position in the commercial sector has fallen in comparison to the wood and masonry markets. How many times in the past five years have you driven by a three-story hotel or small strip mall that is being framed with wood studs? This was a rare sight two decades ago and this increasing occurrence should be a wake up call to everyone who makes a living from steel framing. Unfortunately, our industry does not maintain statistics regarding steel’s market share so we have to rely on anecdotal and drive-by observations.Steel framing has become a less attractive system in the marketplace due to factors both in and out of our control. Steel coil prices have become more expensive relative to its price point in the 1980s and ’90s. Steel has had a similar track record as many commodities over the past decade-increasingly big swings in price and an overall increase in price. We have to face the fact that raw steel costs will continue to be twice as high what they’ve been in the past.
Our industry has to innovate and develop products that reduce the overall cost of delivering structural and nonstructural steel framed buildings to the market despite the challenge of increased raw material costs. If we do not develop an action plan to combat these issues, our industry will suffer the consequences.
Industry Requirements
We face a challenge related to the thermal conductivity of steel framing. Several years ago, the Department of Energy initiated its 30/30 Vision to improve the efficiency of commercial and residential buildings by 30 percent over the 2004 to 2006 energy codes and standards by 2012. Furthermore, the American Recovery and Reinvestment Act of 2009 expedited the enforcement of the IECC by requiring states that received stimulus funding to adopt the most recently published energy standards. These new requirements dramatically increased the material and installation costs for exterior steel framing systems and made some systems, like stucco and brick, difficult to construct. This will force us to surrender even more of our commercial market to competing systems. Whether you make your living producing steel, roll forming, distributing or installing, markets that are constricting are not healthy ones.So the question is, “What can we do about it?” For our company, ClarkDietrich, the solution was to get proactive. We have become part of a new organization, the Steel Framing Industry Association. The SFIA is a vertically integrated organization focusing on the expansion of the markets for steel framing. This organization is designed to address the needs of everyone throughout the value chain-steel mill, steel processor, steel stud manufacturer, steel connector manufacturer, distributor and the end user/ contractor.
We need to start advocating our position with the code bodies and government agencies to ensure that steel is not displaced by other competing systems through simple ignorance. We are working on compliance issues throughout all framing products and accessories to limit liability and increase accountability to our end users. We will also educate and work to find solutions to issues inherent to our industry group. Finally, we want to make sure we are doing our part collaborating with the Association of the Wall and Ceiling Industry, American Iron and Steel Institute and particularly with the Steel Framing Alliance to further their goals of removing barriers and promoting the advantages of cold-formed steel framing. This includes contributing to the research and other activities necessary to drive our industry forward.
We cannot afford to continue to rely on others to take care of these issues for us and must be active in rallying the industry to not only support but expand ongoing efforts. The wood and masonry associations are well-funded and organized to claim more of our market. It is not too late but the clock is ticking. Help be part of the solution by joining the efforts of the SFIA.