North american housing market remains strong, despite a global slowdown

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NORTH AMERICAN HOUSING MARKET REMAINS STRONG, DESPITE A GLOBAL SLOWDOWN

The Wall Street Journal published an interesting article on the world economy and its impact on the housing slowdown. At DuckerFrontier, our Building & Construction industry experts are monitoring true indicators of the housing demand, and we see strong growth for the North American housing market as demonstrated in our 2020 Building & Construction Outlook. We outlined below four key considerations to remember when planning for demand in the United States through 2020 and 2021:

  • Risk of a housing market slowdown due to decelerating home values/pricing is buffered by our US Housing market, which has a healthy forecast in 2020 and is likely to resist typical cycle dynamics – low interest rates, higher employment and confidence, better financial status.
  • Over 60% of US housing is moderate single-family construction, which is generally influenced by local or regional demand, rather than international markets. Some ultra-high-end condo purchasing in leading urban areas may be impacted by global markets, but these make up a significant minority of current housing projects.
  • Residential investment – new construction of single and multi-family homes – only averages about 3-5% of GDP in the US, creating less of a concern regarding global GDP issues.
  • Price deceleration is actually a good development, which should open up more access to the segment of the US population who looks for more affordable homes – representing the largest buying segment and offering plenty of demand for builders.

DuckerFrontier’s Building & Construction experts are at the forefront of key trends impacting the industry. Our goal is to help clients deliver growth solutions to support critical decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us to connect with a team member.

2020 trends in adhesives and sealants

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2020 TRENDS IN ADHESIVES AND SEALANTS

Market Overview

The Global Adhesives and Sealants (A&S) market has a projected CAGR of 5.6% from 2018 to 2025 and a starting market value of USD 52.55 billion as of 2017. With the global A&S market for building and construction industry applications forecasted to be 5.47 million tons and worth 13.7 billion by 2023, we see considerable opportunities for growth in the adhesives and sealants market in the near future, despite current signs of single-family construction sputtering and nonresidential construction activity slowing – but not declining. The opportunities for growth will manifest in four primary areas:

Construction costs and efficiency: As the fabrication of building components occurs more often in a controlled factory environment, new use cases arise for A&S materials that cannot be applied in an external environment where weather is a factor.

A&S Product Development: Manufacturers are moving toward products with a wider range of end uses and that are easier to apply and clean in the field without compromising performance.

Demographics: Increased urbanization is encouraging more multi-family building construction, creating more opportunities for exterior building application within A&S.

Regulatory Climate: With increased levels of green building adoption occurring in both nonresidential and residential buildings, manufacturers will continue to improve new products that replace varying quantities of solvents with water in their product formulations.

Opportunities

We see clear opportunities for significant A&S market growth within several sub-segments of the building and construction industry.  For example, there is opportunity to replace traditional fasteners via water-resistive barriers (WRBs), which are fluid-applied wall barriers (spraying, troweling, rolling, or brushing). These WRBs avoid the need for fasteners like screws that can often cause membrane distortion and water leakage. The A&S market is also positioned to take advantage of the growing trend in indoor pre-fabrication activities, which allows for indoor spraying processes and renders foul weather conditions less of an obstacle. This opportunity for the A&S market also exists for indoor window glazing. Although challenges still exist in using A&S on roofing systems compared to traditional fastening systems, like longer curing times, installation speeds, and narrower temperature application windows, there is ample opportunity for market growth in this segment because A&S can help produce a more watertight, higher quality, quieter, and lasting roof. Together, this will contribute to energy savings in buildings and provide longer product service life.

DuckerFrontier’s Building & Construction team is at the forefront of key trends impacting the industry. How can we help you deliver better outcomes for your business in 2020? Contact us to connect with an industry expert.

2020 automotive outlook

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2020 AUTOMOTIVE OUTLOOK

The global automotive industry continues to evolve alongside changing regulatory environments, consumer demand, and material innovation. A patchwork of automotive suppliers – despite consolidation efforts – work hand in hand with their customers to augment design, engineering, and technology innovation to accelerate the market with new vehicles and move toward more scalable mobility solutions.

*Editor’s Note (March 16, 2020): Our team of analysts’ are currently working to refresh this outlook in light of COVID-19 and uncertainty in the global economy. As we monitor these rapidly changing developments, visit our new Resource Hub, a centralized location with all of the latest insights and business implications surrounding COVID-19, designed to help executives navigate uncertainty and the resulting impacts on global business.

In the short video below, DuckerFrontier’s industry experts outline key trends that are emerging in 2020 as discussed in the 2020 Automotive Outlook, as well as strategies for your business to win in 2020 and beyond:

  • Joining and coating advancements enable new, stronger and more formable materials.
  • Metal forming and manufacturing are keeping up with accelerated automaker product launches.
  • Mobility business requires new focus.
  • Uncertainty with the USMCA and global trade wars.

DuckerFrontier’s Automotive & Transportation team is at the forefront of key trends impacting the industry. How can we help you deliver better outcomes for your business in 2020? Contact us to connect with an industry expert.

*Editor’s note: This page was updated on January 22, 2020 to reflect current trends in the Automotive Industry.

Ces 2020 – the global stage for innovation recap

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CES 2020 – THE GLOBAL STAGE FOR INNOVATION RECAP

DuckerFrontier’s Managing Principal, Scott Ulnick recently attended CES 2020 in Las Vegas, NV. CES is the world’s gathering place for all those who thrive on the business of consumer technologies. It has served as the proving ground for innovators and breakthrough technologies for 50 years — the global stage where next-generation innovations are introduced to the marketplace. Outlined below are several key trends that came out of CES 2020 in Automotive, Industrials, and Building Products.

Automotive

Mobility innovations have been top-of-mind for many automotive manufacturers, suppliers, and consumers. While CES displayed few completed automotive products, the automotive industry had a bigger presence this year than previous shows:

  • Autonomous cars: Autonomous cars will not be hitting the market within the next few years, though manufacturers have taken large strides toward driverless vehicles. Toyota has even launched plans to create a fully autonomous city.
  • ADAS: The auto industry’s answer to fading optimism surrounding autonomous cars is advanced driver assistance systems, particularly for highway driving and automated parking. The focus for ADAS is increased driver safety, and consumers are already seeing products hit the market.
  • Smart biometrics systems: Automotive manufacturers are beginning to introduce biometrics to improve historical safety concerns and as a bridge toward fully autonomous vehicles. This technology will allow vehicles to recognize drivers, monitor breathing, and detect pulses to ensure the safety of passengers.

Industrials & Building Products

Technology giants have made astounding progress in industrial technology over the last decade. With countless products already on the market, we see a continued upward trajectory of innovation in some areas, while others fall behind:

  • Privacy and security in smart building: While we continue to see smart technology dominating the market, 2020 is showing increasing attention to security with more sophisticated products and regulatory changes surrounding data privacy.
  • Lack of environmental technology: We continue to see a surprising lack of green and environmental technology making headway in the industry, with smart technology and home automation dominating the market.

DuckerFrontier’s Automotive and Industrials teams are at the forefront of key trends impacting the industry. Our goal is to help clients deliver growth solutions to support critical decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us to connect with a team member.

2020 building & construction outlook

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2020 BUILDING & CONSTRUCTION OUTLOOK

The North American construction industry has benefited from growth in nearly all application segments, from residential new and remodel construction, to maintenance, repair, and operations (MRO) and infrastructure. The industry continues to see spending and volume increases since the Great Recession. While homebuilders struggle to supply new homes at entry-level price points, skilled labor shortages impact construction throughput and completions, and supply and demand models are shifting, we expect to see a fast start to 2020 in housing construction.

*Editor’s Note (March 16, 2020): Our team of analysts’ are currently working to refresh this outlook in light of COVID-19 and uncertainty in the global economy. As we monitor these rapidly changing developments, visit our new Resource Hub, a centralized location with all of the latest insights and business implications surrounding COVID-19, designed to help executives navigate uncertainty and the resulting impacts on global business.

Construction industry professionals should think about rebalancing their building product and service portfolios to include more renovation, remodeling and non-building emphasis. Despite uncertain macro-fundamentals, we do see opportunities in housing, with no recessionary conditions for US GDP in the first half of 2020.

In the short video below, DuckerFrontier’s Building & Construction experts outline the key segments to monitor and strategies discussed in the 2020 Building & Construction Outlook to help your business capitalize on the industry’s healthy growth in 2020:

DuckerFrontier’s Building & Construction team is at the forefront of key trends impacting the industry. How can we help you deliver better outcomes for your business in 2020? Contact us to connect with an industry expert.

*Editor’s note: This page was updated on January 15, 2020 to reflect current trends in the Building & Construction industry.

Managing principal scott ulnick to speak at aluminum symposium 2020

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MANAGING PRINCIPAL SCOTT ULNICK TO SPEAK AT ALUMINUM SYMPOSIUM 2020

DuckerFrontier’s Managing Principal, Scott Ulnick is speaking at this year’s S&P Global Platts Aluminum Symposium 2020 Conference in Hollywood, Florida on Tuesday, January 21, 2020. He will join a panel of industry executives to discuss the following topics:

  • Tariff and trade war impacts
  • Automotive – Will increased penetration offset slower demand?
  • Hot spots and struggles – Truck trailer, construction, and extrusions
  • Casthouse competition
  • UBC, class scrap in surplus – What’s next for spreads?
  • Effects of US 232 and antidumping cases

Join over 300 executives, analysts, and investors from every facet of the aluminum business this New Year. You’ll meet producers, extruders, traders, plant operators, manufacturers, recyclers, transporters, and end-users all in the same place at the same time.

Mapping out your business strategy is risky without a game plan—especially given the trade war, supply and demand dynamics, pricing fluctuations, and all the other market variables currently in the mix. At the Platts Aluminum Symposium, you can gain valuable insights, engage with industry leaders, and be a part of the debates.

DuckerFrontier’s Automotive team is at the forefront of key trends impacting the industry. Our goal is to help clients deliver growth solutions to support critical decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us to connect with a team member.

Agritechnica 2019: hoping for the best and preparing for the worst in agriculture

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AGRITECHNICA 2019: HOPING FOR THE BEST AND PREPARING FOR THE WORST IN AGRICULTURE

DuckerFrontier’s Europe, Middle East & Africa Heavy Equipment and Agriculture experts, Marcela Lukaj, Business Development Associate, and Audrey Courant, Managing Director attended the Agritechnica Trade Show in November 2019 – an unmissable event attended by major market players to showcase new products and innovation as well as interact with customers traveling from across Europe.

Agritechnica is also an occasion for experts in the sector to discuss developing trends on the macro-economic side such as Brexit. Stay tuned for Part 2 of this series for insights into the impact on the agriculture-specific side like labor shortage and regulatory changes as drivers of technological development, as well as actions for multinational executives.

With little surprise, many industry concerns are driven by Brexit uncertainty, particularly considering the downside risks in the medium-long term and their impact on the heavy machinery and agriculture sectors.

At the Brexit conference, Stephen Howarth, Farm Equipment Council Secretary, discussed the impact of the diverging regulatory changes on the trade of machinery. He explicated that both a No-Deal and a New-Deal Brexit would not have direct consequences on machinery tariffs. However, we would see a large impact on trade of used machines as they will need to comply with EU regulations at the time of import. According to Howarth, this could make exporting machines in the short-term impossible.

Farmers have been paying the consequences of Brexit uncertainty with an increase of 5% on machinery prices since 2016. A No-Deal Brexit will continue to erode their margins, rendering it impossible to sell old machinery abroad and affecting the purchase of new equipment.

Nick von Westenholz, Director of EU Exit and International Trade at NFU, elaborates on the consequences of a no-deal on farmers, pointing out the dramatic impact on the labor market and export from UK:

  • Famers are facing increasing challenges in covering demand for labor; 56% did not secure seasonal workers in 2015 and these numbers remain stable until 2019.
  • Another negative impact would be on export of agriculture production, in particular sheep meat, 40% of which goes to the EU.
  • A lot of preoccupation also on the changes of regulation and the structure of the subsidies, which risk to hit a sector that is already shrinking. Von Westenholz argued that the shift from CAP (common agriculture policy) to ELM (environment land management) would negatively impact farming activity, since it would reduce the support for food production and consequently decrease the cultivated land, 75% of UK soil.

DuckerFrontier’s Heavy Equipment team is at the forefront of key trends impacting the industry. Our goal is to work with clients to deliver tailored growth solutions to support your critical business decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us here to connect with a team member to get started.

On-the-ground insight: excon 2019

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ON-THE-GROUND INSIGHT: EXCON 2019

The 10th edition of the construction equipment trade fair – EXCON 2019 was held last month at Bangalore International Exhibition center and provided a platform for the display of technological advancements, innovations, and latest developments in the construction equipment sector. Despite the sluggish Indian economy, the construction industry expects good business. Driving factors will be the trend of mechanization to develop infrastructure in an ecologically sustainable manner, enabling projects on smart cities,  promoting skill development, and position “Make in India” – as the national agenda for achieving holistic growth in the infrastructure and related sectors.

Over the last years, EXCON has developed into the largest of its kind in South Asia with over 300,000 square meters of display area; 1,250 plus exhibitors, including 390 overseas companies from 21 countries and featuring country pavilions from China, Germany, Italy, South Korea, Turkey, and the UK. The event attracted over 70,000 business visitors from India and abroad. Aman Choudhari, Chairman, CII Karnataka State Council said, “EXCON’s initiative over the last two decades helped Bangalore to emerge as the Construction Equipment Capital of India with the presence of global players from both the public and private sectors.” As part of the 10 year celebration, there were special activities like exclusive pavilions on AI, IoT, Robotics, Start-ups, and Components and Parts.

In this short video, DuckerFrontier’s Managing Director, Markus Pfefferer, shares key takeaways from the show and trends we are seeing in the heavy equipment industry.

DuckerFrontier’s Heavy Equipment team is at the forefront of key trends impacting the industry. Our goal is to help clients deliver growth solutions to support critical business decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us here to connect with a team member.

Is india the new face of smart mobility?

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IS INDIA THE NEW FACE OF SMART MOBILITY?

Managing Director of DuckerFrontier’s Asia Pacific practice, Markus Pfefferer recently wrote an article for Automotive World’s November 2019 edition on India’s readiness to adopt smart mobility.

While some manufacturers have begun to move into the electric vehicle space, the current business culture still needs to change to encourage mobility technology and shared mobility.

Tata Motors, another of India’s leading automotive manufacturers, has created a separate division to explore ways to tap into its entire range of passenger and commercial vehicles for offering shared mobility solutions. The new department, Mobility Innovations Hub, will also look at collaborating with start-ups such as Ola, Uber and with freight aggregators.

Millennials are a large driver of technological advancements in India, with 50% of the generation questioning the need to own a vehicle. This type of change in consumer behavior and willingness-to-pay is disrupting the current business environment and spurring change in automotive manufacturers in India.

Read the full article on Automotive World here. More from Markus on vehicle telematics and electrification in India here.

DuckerFrontier’s Automotive team is at the forefront of key trends impacting the industry. Thus, our goal is to help clients deliver growth solutions to support critical decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us to connect with a team member.

SMART BUILDING TRENDS IN 2020

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SMART BUILDING TRENDS IN 2020

Smart buildings and homes and the “Internet of Things” (IoT) have dominated headlines in recent years as an emphasis on energy efficiency, productivity and sustainability have remained a focus of global governments and corporations.

DuckerFrontier has been tracking these developments for years, and in 2020 we see significant trends impacting the building industry, suppliers to the industry, and all companies that interact with smart technology. Below we provide four key trends for executives to watch to win in 2020.

Key Trends

1. Virtual BAS (Building Automation System): Newer smart building technology will continue to replace obsolete conventional BAS systems at the fraction of the cost. These new technologies will drastically improve energy efficiency.

2. Operational Technology Focus (OT): OT represents hardware and software that detects or causes a change through the direct monitoring and/or control of physical devices, processes and events in the enterprise. This is called “the edge” and is the place where inexpensive wireless devices can bring much needed visibility into a building. Examples include monitoring HVAC equipment, pumps, meters, pipe temperatures, etc.

3. Workspace/Workforce Management (The 3-30-300 Rule): The “3-30-300” Rule is often used in reference to the estimated annual amount a company pays per square foot in terms of total occupancy costs for energy costs, real estate costs, and workforce costs. $3 for utilities, $30 for rent and $300 for their employee costs (salaries, benefits, etc.). As a result, leveraging smart building technology to reduce costs in this arena are too prominent to ignore, making management of space a big trend for 2020.

4. Subject Matter Experts (SMEs): SMEs have the most leverage in the Smart Building Market because they are positioned to take advantage of the benefits of IoT by offering real solutions with their knowledge. There is no doubt SMEs are the future and have the most experience in troubleshooting problems that arise in the MEP – mechanical, electrical and plumbing engineering – sector. This trend will become especially visible in 2020. Using expertise and knowledge to create practical solutions is the key to a successful future. SMEs will remain very influential in the blooming IoT industry.

DuckerFrontier’s Industrials team is at the forefront of key trends impacting the industry. Our goal is to help clients deliver growth solutions to support critical business decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us to connect with a team member.