Get Ready for Change
The landscape of the glass business shifted abruptly in the wake of COVID-19. While the industry entered 2020 on strong footing after a decade of expansion, companies today face great uncertainty over the ongoing health crisis, the economy’s ability to rebound after record drops in GDP, and even the future of building design and manufacturing processes.
Speakers at the recent NGA Glass Conference, held virtually July 28-30, offered insights about the state of the industry and the “new normal” of businesses’ operations, providing some clarity about how decision makers can prepare for what’s coming next. Key takeaways:
1. The economy
Conference keynote speaker Connor Lokar of ITR Economics described the “macroeconomic carnage” happening in the U.S., evidenced by a 32.9 percent nosedive in second-quarter GDP. Lokar doesn't anticipate the macroeconomic recession will go away quickly, nor does he anticipate a V-shape recovery. “This will ripple through the economy through next year sometime,” he says.
Construction is a lagging sector. As such, the U.S. economy is a leading indicator for where construction is going. Depending where a company sits in the construction market, it will have varying lead times for when things decline and then start to recover, he said.
2. Glass production
Float glass production, particularly in more mature markets, sharply dropped due to COVID-19, according to Bernard Jean Savaëte, president of BJS.Différences. “The impact is severe on operations,” Savaëte says. “Most of Europe’s 48 melting installations had to cease production for several months. Tens of thousands of workers were without jobs. It is estimated that glass production in Europe will be roughly 20 percent below last year. … I would say that COVID is often accelerating decisions for manufacturers. It is sharpening existing difficulties.”
3. Design and construction
The coronavirus “irreversibly changed how building occupants will enter, navigate and occupy building interiors,” according to Domenic Cristofaro, architecture practice leader for HED Design, who also said that preventing disease transmission will be foremost in the mindset of design professionals, building owners and regulatory agencies. He said he envisions glass will be used more frequently as barriers not only at points of service, but within office spaces themselves. Gone are the days of the over-densification of commercial office buildings, he said.
Many fabricators are contending with supply chain interruptions, delays in spare part deliveries, and difficulty getting service technicians into facilities to address problems. Tim Zuerlein, director of supply chain, advanced materials at Eastman Chemical Co., said companies must maintain close and ongoing communication with their suppliers about upcoming orders and future needs. “Transparency and trust are paramount. It does no one any good to overstate your requirements―state what are going to be your true requirements,” he said.
Marcus Bancroft, sales manager for Vesuvius, also underlined the need to maintain an inventory of critical parts, especially due to disruptions in technical service. “It will save you a lot of money in the long term to invest in the spare parts now,” he said.
5. Digital technologies
One of the major impacts of COVID-19 has been an increased use of software and digital tools, as fabricators seek to increase automation and optimization, and as a large part of the workforce shifted to working remotely. Although the pandemic has certainly had major economic impacts, for those that have the option, now is actually a prime time to purchase software, said AJ Piscatelli, business development, FENml.
Vendors are currently competing for clients, he says, resulting in better pricing for consumers. If it does end up being a large investment, many suppliers are able to work with payment plans as well.
Read more coverage from the NGA Glass Conference in this issue, including a code Q&A.