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The residential construction market is huge, but metal products struggle to gain a foothold

This private residence on Squam Lake in Holderness, N.H., was designed by Kane Architecture, East Hardwick, Vt., and it features 7,500 square feet of RHEINZINK America Inc.'s standing seam panels for roof and walls. Architectural metal occupies a small portion of the luxury home market and is most often found only on high-concept designs such as this.

In many parts of the world, such as Europe and Australia, metal roofing and wall panels are dominant products in residential construction. In fact, metal roofing in Australia is the default, while other products such as asphalt shingles and high-priced slate, take a much smaller market share. Is there similar opportunity in the U.S. residential construction market for metal components to achieve similar acceptance?

According to U.S. Census Bureau figures released in July 2016, the value of construction put in place on an annual basis for 2016 is $1.153 trillion. Of that, residential construction accounts for $452 billion or about 39 percent of the total. This includes both public and private sector construction. If you dig further into nonresidential construction and start backing out non-building construction such as highway, waste disposal and conservation, the nonresidential number drops down to close to the same as residential construction.

In short, the metal construction component industry-characterized primarily by roof and wall panels-is capturing a relatively small segment of the total construction market compared to other countries. The exception to that rule is the multifamily market, which does see a significant use of metal wall components. But in the new home market-whether it's production housing, custom, entry-level or move-up-metal holds a mere sliver of market share. The exception to that rule seems to be the luxury new home market (see below).

But the biggest exception to the poor acceptance of metal products in the residential market could be the existing home re-roofing segment.


Metal Roofing Grabs Market Share

The Metal Roofing Alliance (MRA), which is a non-profit consortium dedicated to educating consumers and contractors about metal roofing, recently announced that the metal roofing market share in the U.S. jumped from 8 percent in 2014 to 11 percent in 2015. (The study was conducted by Dodge Data & Analytics.) That represents 750,000 homes, whether new or existing, received a metal roof in 2015.

MRA executive director Bill Hippard says, "It's very exciting going from 8 percent to 11 percent. Every 1 percent of market share that metal is able to gain represents 1.4 million squares. That's an awful lot of square feet."

Double-digit market share in residential roofing has been achieved previously, but not since the boom days in 2005 has metal roofing achieved such success. Most of that comes from the existing home market. "Look at the housing market," says Hippard, "and about 85 percent of the roofing market is re-roofing." (There are 7 million homes that need to be re-roofed every year.)

Metal components do not always need to be bright and shiny and modern. RustWall Panels from Western Metal Deck, Ontario, Calif., soften the modern lines on this sleek house in Raleigh, N.C. Designed by Raleigh-based The Raleigh Architecture Co., the private residence showcases the way metal can blend with wood and glass to create a very comfortable and beautiful residence.

According to Hippard, about 70 percent of the metal roofing market is standing seam, with the remaining being stamped shingles. "One that is changing is the high acceptance in rural areas. If you look at the market share by census region, the southeast and southwest have high acceptance."

While market share is starting to grow in the urban and suburban markets, it doesn't match other areas. There is no fundamental reason why metal roofing can't achieve similar or greater acceptance. The Australian market is a good model. Metal roofing is dominant because it is widely accepted by homeowners as the best solution. A standing seam metal roof in a suburban residential neighborhood stands out.

Rural housing, luxury homes and vacation homes all lend themselves to the acceptance of a metal roofing aesthetic because they are different and designed individually. "The one thing about metal roofing," Hippard says, "is people work so hard to make it not look like metal roofing. They try to make it look like cedar shake, clay tile, slate and even asphalt."

Among the objections to overcome when gaining acceptance for metal roofing, probably the most difficult is aesthetic. Price and noise can be easily addressed, but changing people's minds about what looks good on a house is more difficult. Still, in 2006-2008, MRA did test studies in three markets-Eau Claire, Wis., Harrisburg, Pa., and Birmingham, Ala.-where they increased the advertising budgets threefold and pushed for greater acceptance of metal roofing. The result is that in those markets, the share of metal roofing doubled over an 18-month period.

For Hippard, that's proof that the top of the market share has not even been approached. "If we have the dollars and can educate homeowners," he says, "we believe we could get 20 percent market share."


Tough Path of Metal Wall Panels

The acceptance of metal wall panels is nowhere near the level of metal roofing in residential construction. Part of the reason is cost, but another is-like roofing-aesthetic. Wall panels have a modern aesthetic, which makes the houses more sculptural and more of a statement.

Consequently, finding metal wall panels on a residence is far more prevalent in the luxury market. Chip McGowan is president of RHEINZINK America Inc., Woburn, Mass., and his company provides roof and wall panels for commercial and residential markets. "We absolute do play in the luxury market, but the bulk of our sales or tonnage is in the ultra-high-end market."

McGowan points out that that market was not affected by the economic downturn, so demand remained pretty steady throughout the housing recession. "We haven't noticed a tail off in the building of these homes," he says. "It's been fairly steady for the last three years. The Tom Brady's just keep buying." About 10 percent of the company's sales come from residential. Typically, that includes both the roof and wall panels on a luxury home.

As with the regional acceptance of metal roofing, McGowan also sees variations in demand for metal wall panels by market. "There are strong metal markets," he says: "Boston, New York, D.C., Atlanta." Those areas have a greater acceptance of metal component products in residential construction, in part because they have greater modern aesthetic. A market such as St. Louis, which has been a traditional brick residential market, is far less likely to see metal wall panels (or roofing) gain market share.

The good news about aesthetic acceptance of metal components in the high-end market is that eventually those design features move down market to luxury and below. Potentially, metal roofing and metal walls panels could achieve significant market share if the design trend toward a modern aesthetic became more prevalent. The new home market has recently seen a major swing toward modern and contemporary designs. The question is whether that is fad or a long-term trend.