Productivity in the metal doors, sash, and trim industry

Monthly Labor Review, March, 1986 by Elmer S. Persigehl, John G. Olsen

Productivity in the metal doors, sash, and trim industry

From 1967 to 1983, output per hour in the metal doors, sash, and trim industry1 increased at an average annual rate of 0.9 percent. In comparison, the rate of productivity growth for all manufacturing industries during this period was 2.4 percent. The slow productivity rise reflected a relatively low output growth of 1.5 percent per year and an increase in employee hours of 0.6 percent per year. (See table 1.) The industry's demand is dependent upon residential and nonresidential building construction, where wide seasonal and cyclical fluctuations have been common. The productivity growth experienced in this industry has been aided by gradual improvements in equipment design and the increased application of easier-to-use aluminum materials.

Year-to-year changes in industry output and productivity have generally shown similar movements. Large increases in output have been associated with above average gains in productivity. For example, in 1971, output increased 11.3 percent and productivity jumped 11.3 percent. Similarly, output advanced 11.4 and 24.7 percent in 1976 and 1977, while productivity gained 4.0 and 7.6 percent. In 4 of the 6 years that output declined, productivity also fell. Despite declines in output during 1975 and 1982, productivity advanced as manufacturers were able to adjust their work force hours to meet demand changes.

Subperiod productivity trends

In the metal doors, sash, and trim industry, productivity growth can be divided into two distinct periods: 1967-72 and 1972-83. From 1967 to 1972, productivity grew at a rate of 2.4 percent per year based on a gain in output at a 3.8-percent rate and an increase in hours at a 1.4-percent rate. This growth, however, reflected a slight decrease during 1967-70, with a substantial growth in 1970-72 of 6.5 percent per year. Following the economic recession of 1970, industry output grew strongly in 1971 and 1972.

Between 1972 and 1983, productivity increased at the low rate of 0.5 percent per year, reflecting an annual output growth of 1.2 percent and an increase in hours of 0.7 percent per year. This slow growth resulted from a balancing off of diverse movements. From 1972 to 1974, productivity fell at an average annual rate of 3.2 percent, but from 1975 to 1977 it rose to a rate of 5.8 percent as a result of an average increase in output of almost 18 percent per year. From 1977 to 1981, productivity again declined at a rate of 2.4 percent per year, largely as a result of the economic recession in 1980. But it rebounded in 1982 and 1983, increasing at an annual rate of 4.6 percent.

Output

Establishments in this industry manufacture metal and metal covered doors and sash, window and door frames, screens, molding, and trim. In 1983, more than two-fifths of the industry's output consisted of doors, including garage doors, and around one-third of window units and related items. The industry's output depends closely on building construction markets. More than four-fifths of the output was used in building construction.2 Approximately two-fifths of output was used in new residential housing, including additions and alterations. One-sixth was used in new nonresidential buildings, which include educational and commercial buildings. Additionally, almost one-quarter of output was used in maintenance and repair construction on existing buildings.

In spite of several economic downturns, overall output of the metal doors, sash, and trim industry increased an average of 1.5 percent per year between 1967 and 1983. In comparison, over the same period, all manufacturing output increased an average of 2.3 percent per year.

The industry's output generally paralleled the trend for new building construction.3 Between 1967 and 1972, for example, the industry's output grew at an average annual rate of 3.8 percent. In comparison, the deflated value of new building construction put in place increased 3.6 percent annually over this period. From 1972 to 1975, the industry's output fell 10.6 percent per year as the market for new buildings experienced an 11.0-percent annual decline.

Since the mid-1970's, this pattern has changed somewhat. To offset market fluctuations in new building construction, manufacturers have produced more of their output for the replacement market. In 1973, new construction accounted for about 52 percent of the value of total industry revenues.4 By 1983, this market had fallen to about 40 percent of revenues. The replacement market comprised about 59 percent of revenues in 1983, rising from 46 percent in 1973. This trend is expected to continue.

Metal doors. One factor affecting the demand for industry output has been the wider use of metal doors. In single family housing construction, homebuilders are installing more metal than wooden doors in projects costing less than $100,000.(5) According to the Architectural Aluminum Manufacturers Association (AAMA), aluminum doors accounted for more than three-fourths of all residential patio doors used in 1982. The introduction of more energy efficient metal door units along with increased consumer demand for security and fire safety, also has contributed to a shift in the type of entry door in new construction from wood to metal.