Volume 41, Issue 5 - May 2006

Southwest Forecast

The Weather Isn't All That's Hot in the Southwest...
The Glass Business is Sizzling, Too
by Peggy Georgi

The Southwest, with its mild climate, good economy and many tourist attractions, is drawing more people to the area than ever before. This influx of people has increased both the residential and commercial building segments of an untold number of communities throughout this region. This growth has resulted in a boom of business activity that is keeping the Southwest glazing industry challenged to meet the demands.

“Business is booming,” says Dean Perry, general manager for Glass Unlimited in Tucson. “We have a very favorable outlook on the commercial market while [the market] is somewhat reserved for the residential segment,” says Perry, whose mid-sized contract-glazing firm is booked with projects through the end of the year. “As my colleagues in the industry can attest, it is unusual to have growth or decline in both market segments at the same time. At some point in the future, the commercial market will wane while the residential will pick up.” 

Roger Bierig, president of Santa Fe Glass & Mirror in New Mexico, says business is great. However, it wasn’t always this way for this mid-size glazing contractor. 

“When I first opened my business more than a decade ago, we would be dead at this time of the year,” recalls Bierig. “Today, our trucks are rolling, we’re staying steady and as summer rolls around things will really heat up.”

“Business has been pretty strong around here, too, and it’s been that way for some time,” adds Tony Baca, president of Southwest Glass & Glazing in Albuquerque. “Interest rates are down, generating increased growth in new development in all sectors, the quality of life is good and our local and state politicians are making the kinds of decisions that are helping to keep the economy going strong and viable. In our area we don’t seem to be subject to the boom and bust that tends to impact the rest of the country. We don’t follow national trends and aren’t dependent upon any one type of industry. We just kind of move steadily along.”

“The last two years have been our busiest periods since I have been [working] here,” recalls Eileen Webb, operations manager and a 25-year veteran of Samuels Glass in San Antonio. “We performed an enormous amount of contract work and the volume of business in this area remains high to this day. While this year is off to a slower start it’s a bit of a welcome relief, I have to admit. However, we remain busy and very happy that we are. We’re at a good speed at the moment.”

“Business has been very good and work is plentiful,” says David Alvarado, a 30-year industry veteran who opened David’s Glass & Mirror, a small, family-owned glazing contractor, five years ago. Alvarado says he has fared very well in the El Paso market. “However,” Alvarado adds, “we are in a highly competitive market and do have to work hard for each and every job.” 

David Mortimer, a glazier with 25 years in the industry, says they are so busy at Mirage Glass & Mirror in Phoenix that they are sometimes putting in 14 to 16 hours each day. “Things slowed down a little in December, but after the first of the year, it picked up again and it’s been extremely busy ever since.”

Driving the Industry
The amenities of the area are a major factor fueling opportunity and development. Companies say there are a number of different trends that are affecting their businesses and the industry. One such factor is the area’s population growth.
“We live in an area where there are a number of major universities and a growing medical community,” Webb explains. “As the population of our local universities and medical communities increase so does the need for more housing and facilities to accommodate that growth. This has brought about an increase of work in this segment of our industry and this has been good for business.”

Webb continues, “In addition, the increase in population to our area is bringing the need for new homes and businesses. We are seeing an increase in new housing and small retail business starts. We have a well-maintained and viable downtown and inner city district—unique for a city of our size. Solid vision and planning by our local government has helped make San Antonio a popular tourist destination as well as an attractive place to live and work. Because of this, our population is growing and the city is expanding. Businesses within the city and surrounding towns are also profiting from this growth and through the construction of new businesses, homes and schools.”

“Texas, Arizona and New Mexico are top tourist destination states,” says Baca. Tucson and Rio Rancho are two of the fastest growing communities in the country. “People come and visit, fall in love with the area and move here,” he adds. “This helps keep our economy fluid.”

“Overall,” Bierig points out, “this region is a very desirable area in which to live. “It has temperate weather, affordable housing, a strong economy and reasonable taxes.”

“In the greater Tucson area we have overbuilt on houses and under built for business and commercial structures,” explains Perry. “We need places for people to work. With little room to expand outward, the trend is to build upward. Tucson’s traditional building style is one story high and spread out. With the rapid growth we are experiencing in our area, we will now follow in the footsteps of what larger cities around the country have been doing for years: build up.” 

Energy Matters
No stranger to the heat, companies in the Southwest say they are also seeing a shift toward energy conservation and more high-performance glass products for the commercial market.

“We are witnessing a very large push toward energy conservation in the commercial market,” explains Perry. “We very seldom install single pane glass; it’s almost always insulatingglass. With the variety of colors and advancing technological amenities, low-E is starting to become the standard in the commercial market these days. From both an energy conservation and financial standpoint it just doesn’t make sense not to use low-E glass whenever possible.”

Webb agrees. “I personally have seen an increasing request for low-E insulating units in the commercial market,” she says. “Environmentally-friendly and efficient products are here to stay.”

Time Crunch 
“A major challenge for us is that we seem to have less time to build more complicated buildings,” notes Baca. “Our schedules are more compressed and we are finding ourselves more intimately involved in the design end of the project. The pre-planning part of the project is more involved in order to have the buildings go up more quickly and efficiently. We have to be good problem solvers in this industry today and developing good relationships with our contractors is essential. We try to be the ultimate silent partner and make the job very painless for the contractor. The goal is to get in, get out and get paid.”

“We are receiving requests for more unique and higher-end products,” says Mortimer. “Residential and business customers are getting more extravagant with their requests and are willing to pay for it. The work is more complex with designs more difficult to cut and install. For example, glass banisters are becoming increasingly popular in this area. We have cut and installed four in the past several months and are preparing to do one for an exclusive Scottsdale restaurant.”

Alvarado agrees. “The work is becoming more challenging due to the nature of the job,” he says. “We are taking on more complex and time intensive projects.” 

Green Scene
Southwest glass companies are also seeing the move by the architectural community to create green buildings and have become more environmentally conscious of the issue.

“We seeing a strong movement in the architectural arena for the utilization of more glass in the buildings, more daylighting, etc.,” says Baca. “More companies are LEED-certified and thus utilizing more recycled material in their buildings, providing for more natural lighting to rooms and shading with a building element to allow buildings to better sustain themselves.
“Because glass technology is changing at a rapid pace we have access and awareness about the higher performing glasses that require less energy to heat or cool,” Baca continues. “With sun some 320 days a year, we need to take advantage of reflective and mirrored glass. The new coatings are helping with the cooling issue of our buildings and the wear and tear on our HVAC systems.”

Concerns and Challenges
Like other areas of the country, glass shops in the Southwest face a myriad of challenges including growing labor costs, a shrinking labor pool, attracting and retaining skilled workers and keeping up with technology.

“Finding dependable, qualified workers is few and far between these days,” Perry laments. “Those we can find come with a premium.”

Alvarado and Mortimer concur, saying finding and keeping good workers is a challenge.

“A part of the problem with finding qualified labor is the fact that the pool we have to choose from is shrinking,” Baca adds. “Construction is not a glamour field. The workforce is aging and is not being replaced at the same rate as the older workers are retiring. This is going to be a major problem for our industry in the future.”

“Like labor, our raw materials are also at a premium these days,” continues Perry. “[Costs of] aluminum, fuel, glass and vinyl extrusions, for example, are all being driven up by the petroleum market, supply and demand, type and transport of the product. This all factors into the bottom line.”

“In terms of surcharges, we’ve come to expect [them] in many areas of business and not just the glass industry,” adds Webb. “We consider it a fact of life and I think the consumers do too; it’s just a part of doing business today.”

Worker Woes
“In terms of workers’ compensation insurance, we are fortunate to be a part of the State Compensation Fund of Arizona,” says Perry. “It has proven to be very competitive cost wise. Over the years, we have had insurance companies come from out of state touting competitive rates and coverage. Their competitive rates didn’t last and neither did the companies. The State Fund has established itself as a leader by developing a good working relationship with various groups in our industry, for example, the homebuilders, subcontractors and contractors associations. This has allowed us to pool our resources and enjoy a greater savings on premiums.” 

“Due to the size of our company, our overhead is higher so we have to be cost-conscious in every aspect of our business, and do things better and more economically in order to remain competitive,” says Webb. “These are challenges we face every single day. “ 

“One area we take a very aggressive stance on is our safety program,” Webb says. “It helps keep our workers safe and our insurance costs down. We are very cognizant of worker and workplace safety issues. We conduct weekly safety meetings and recognize and reward our employees for their ongoing safety efforts.” 

Service and Success
Companies in the Southwest also say service and success essentially go hand in hand. Service, they say, is what sets a company apart and is a critical component to overall success. 

“In terms of employees, we hire attitudes and work ethic,” explains Webb. “We work diligently to hire good people and provide the right opportunity, benefits and work environment to keep them.”

“I prefer to train someone new as opposed to hiring someone who has been in the field [a while],” says Bierig. “I have found that the time and investment, along with mentoring from seasoned staff, have proved to be a good combination for retention.”

“Retention isn’t a problem for us,” notes Baca. “Our employees, if they stay in the business, stay with us. We provide a competitive salary, benefits and decent work environment. We really work to make our employees feel needed and wanted … because they are. We learned a long time ago that it’s not all about the money.”

“We have a great team,” he adds. “We perform for our customers and try to make it as easy for them to do business with us as possible. We provide a good product, stand behind it and if there is a problem we take care of it.” 

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