Tag

Cost Archives - NVISION

The Top Building Materials Trends for 2019

The 2019 NAHB International Builders Show is around the corner and NVISION is gearing up to be there!

S&P Global recently released its Building Materials Industry Top Trends 2019, highlighting some of the key trends, takeaways, and forecasts the building materials industry will be keeping its eye on this year, and especially at IBS 2019.

Based on the trends report, here are our three key takeaways that all building materials industry leaders should know!

steel rods - building materials

Commodity Costs Will Continue to Grow

As the report points out, commodity costs for the building industry in North America rose in 2018 for several reasons, including decreasing unemployment, new tariffs, and increased demand. And S&P Global expects those same factors to continue to drive commodity prices up in 2019.

“So far, most building materials companies have been able to offset the cost increases with higher pricing, but it remains to be seen if companies can continue to maintain higher prices in 2019,” the report says. With S&P Global predicting a 3 percent increase in building materials costs in 2019, the building materials industry will need to look at cutting costs and optimizing their supply chains to offset this increase in prices and maintain their margins without continuing to raise prices.

Increased Prices Could Slow the Building Materials Recovery

As the report states, low inventory, higher home prices, and higher interest rates may be pushing marginally qualified homebuyers out of the North American market. This, S&P Global says, could bring a halt to the building materials recovery. “Existing home sales (a big driver of repair and remodel activity) could slow if values remain high and available inventory low,” the report claims. With fewer pre-existing homes being purchased, fewer old houses will be getting remodeled and repaired by new homeowners, and that means less business for building materials companies.

With building materials companies competing for homeowners with fewer dollars to spend – or with new construction townhomes that don’t need remodeling – they will need to find other ways to protect their margins, including finding ways to cut costs and compete on the customer experience with enhanced agility and responsiveness.

home building site

The Building Materials Market is Healthy, But with Growing Risk

When it comes to the numbers, the S&P Global report predicts modest growth in the North American building materials market. “We expect 2.3 percent real GDP growth, 3.6 percent unemployment, and 1.3 million housing starts. We further expect mid-single-digit growth in repair and remodeling activity, and only 2.8 percent growth in nonresidential construction,” the report states.

As a result, S&P Global is predicting another year of improved sales and earnings for building materials companies. But, the report says, “with much less growth than in 2016 and 2017.”  What’s more, due to the affordability and availability issues of new homes mentioned above, S&P Global warns that housing starts could actually retreat slightly in 2019. To combat this problem, many builders will “attempt to address this by offering more value-based entry-level housing,” which will present an enormous opportunity to building materials companies who are able – thanks to a nimble, efficient supply chain – to offer reduced prices on materials and faster delivery timelines.

*****

The 2019 NAHB International Builders Show promises to be one to remember. With these trends in mind, building materials companies will want to be on the lookout for experienced partners who can help them cut costs and better optimize their supply chain management in order to capitalize on this shifting market.

NVISION will be there, and we hope to see you!

Related blogs:

Subscribe to the Blog

Why NVISION?

For more than three decades we’ve partnered with Fortune 500 companies to deliver marketing operations solutions. Led by a strategic account management team, we’ll help you develop, procure, fulfill and distribute printed collateral, signage, point-of-purchase displays, direct mail, branded merchandise and much more.

LEARN MORE

How Marketing and Procurement Can Work Together to Improve Revenue

There is no responsibility more important to marketing leaders than driving revenue. This can be done in two primary ways: growing existing revenue streams by acquiring new customers and improving customer retention, or by improving profit margins by effectively limiting costs. Nearly all marketers are focused on the former: “How do I win and retain more business?” But as Jon Smith of Marketing Week explains, there is another, even smarter way.

Procurement has a major role to play in managing revenue and marketing costs. So, how can marketing and procurement work together to improve revenue? We’re glad you asked!

people in the meeting room

Strategic Alignment for Procurement and Marketing

The name of the game for marketers today is accountability. Whether it’s in the form of revenue attribution, ROI, or highly granular cost analysis, new technology has made KPIs an even bigger part of marketers’ lives than ever before. As Worldwide Business Research Digital reports, “marketing teams are being held increasingly accountable for ROI.” Of course, for procurement teams, this level of accountability is nothing new. Cost reduction, optimization, and business process outsourcing (BPO) have been their primary job roles forever. Which is why aligning the goals of your marketing and procurement teams is so important.

Thanks to BPO, procurement can offer powerful solutions to marketing’s biggest problems. Solutions around time-to-market, brand control, cost reduction, and responsiveness are all under the purview of procurement but matter immensely to marketing as well. That’s likely why, according to WBR Digital, 51% of companies rely on BPO for marketing execution, especially around print production. By recognizing this natural synergy, and formalizing the alignment of their goals, procurement can help marketing departments do more with less.

Why BPO for Marketing Procurement?

Optimization can only follow where visibility exists. That’s why your marketing and/or procurement teams should always be looking for opportunities to achieve greater efficiency, optimization, and cost reduction through BPO. This visibility opens the door to more profitable outcomes. With reliable, granular information about marketing costs, delivery timelines, and critical areas to improve these figures, marketing can not only make more accurate predictions and plan for success, but can better understand – and subsequently optimize – how they maintain brand control, guarantee quality, and keep production velocity running smoothly.

As Smith says, it’s a “win-win” for marketing. With BPO carried out by marketing execution experts, your marketing team can focus on improving their customer experience and sales results, and leave the optimization to trusted partners.

meeting in the conference room

Marketing Execution and Print Procurement

According to WBR Digital, the majority of businesses already agree that they reap greater benefits from managing their print procurement externally. 58% of those surveyed believe that their supply chain and marketing execution partners do a better, more efficient, cost-effective job with print procurement for marketing materials. In fact, they identified the top 4 reasons why they prefer to outsource their print procurement to partners:

  1. Cost Reduction
  2. Improved time-to-market versus competition
  3. Better ROI
  4. Stronger brand and quality control

These are powerful benefits to marketers, made possible by outsourcing their print procurement.

*****

Procurement has a major role to play in managing revenue and marketing costs. By outsourcing it to a trusted partner, your business can enjoy the benefits of greater visibility, optimization, and success. Whether your marketing department measures success by ROI, cost reduction, or overall revenue, understanding the value of aligning your marketing and procurement goals, and the insights BPO can deliver, is a sure-fire way to increase your odds of hitting your annual goals.

Subscribe to the Blog

Why NVISION?

For more than three decades we’ve partnered with Fortune 500 companies to deliver marketing operations solutions. Led by a strategic account management team, we’ll help you develop, procure, fulfill and distribute printed collateral, signage, point-of-purchase displays, direct mail, branded merchandise and much more.

LEARN MORE