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Commercial Roofing 2016

BUSINESS ASSESSMENTAND OUTLOOK

F R O M P R I N C I P I A

Demand for commercial roofing has grown as the overall construction market has

strengthened over the past few years. Growth of this roofing segment has been further

punctuated by demands for higher performance both during and after installation.

Updated building codes for increased energy efficiency are driving changes in construction

method to provide continuous insulation performance for proper building enclosure.

Commercial roofing has become increasingly more systems-driven requiring further

education aimed at architects, roofing consultants and contractors about selecting and

installing the right system including underlayment, insulation, weather resistant barriers,

flashing and tapes, adhesives and coatings. Developing specifications for complete systems

will create opportunities for all companies supplying the commercial roofing market.

The competition between roofing systems, ranging from more traditional roofing such

as built-up roofing and modified bitumen to faster growing single-ply and liquid-applied

roofing has heightened to meet these energy efficiency code changes as well as reduce

heating and cooling costs and deliver LEED credits as part of the overall building envelope

system. Solar panels and vegetative roofs to manage energy performance of the building

are also part of the solutions available, gaining attention among both the A&D community

and property owners. These options will further influence the type and thickness of roof

membrane selected as will mixed roof designs on these projects.

End market changes also have great impact on the supply of commercial roofing. Shifting

product trends will force decisions on industry capacity at the manufacturer level while

the changing product mix to meet the range of options available will require distribution

to take more inventory to meet product availability for contractors. Both manufacturers

and distributors/ dealers also will need to provide more education on how their products

perform to meet code and deliver value to the architect, contractor and property owner.

From a supply perspective, stability exists among the tier one product manufacturers, with

remaining suppliers focused on specific product or market segments to create a defensible

competitive position. Distribution continues to consolidate at the top with the top three

distributors accounting for well over half of commercial roofing sales.

Commercial Roofing 2016

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These companies have the size and scale to deliver the necessary level of support to meet the

changing and more complex aspects of serving this segment of the roofing industry.

Commercial Roofing 2016 will explore the dynamics influencing current and projected market

demand for commercial roofing and where and how to best participate in this business. The

report provides insights into industry trends to help manufacturers and distribution formulate

strategies to grow the business and drive market share increases. In order to gain a competitive

edge and capitalize on these opportunities, industry participants need actionable market data

to formulate effective strategies for products and markets served.

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About the Program

Commercial Roofing 2016 presents a detailed and focused analysis revealing use and preference trends and insights into market forces driving product and brand selection. The report is founded upon primary research that includes probing interviews and surveys conducted among more than 500 value chain participants.

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Report Format

The report is structured for easy reference. The working outline that follows is subject tochanges based on subscriber input.

1. Executive Summary

Summary of current market size, trends anddevelopments, keys for future success and outlook.

2. Roofing Products Review

A review of commercial roofing products, alongwith recent product advances and developments.Product review considering:

■ Application / function■ Performance■ Major producer / brands■ New products ■ Warranties

3. Market Assessment

A thorough analysis of demand in North Americawill provide the baseline. A three-year projectionwill provide insights into how demand is mostlikely to shift by material, channel and region.

■ Market segment demand analysis 2015 for allmajor roofing products, volume and value by:• Category• Material• Construction type• Market• Region (according to U.S. Census Bureau

regions and Canada)• Distribution channel

■ Trend and impact analysis• Impact on roofing demand

- Macroeconomic and category specific- Installed costs- Prices (ASP factory gate)

- Inter-material competition- Performance improvements

• Impact on distribution channels- Channel margins- Consolidation activity- Partnerships

• Voice of Customer- Impact on usage and preferences

• Architects• Contractors• Property owners• Distributors and dealers

• Implications for suppliers

■ Trend analysis and segmented year-over-year forecast demand to 2018• Key demand drivers• Projected changes in demand by:

- Category- Material- Building type- Construction type- Region

• Rationale for changes• Product substitution• Technical and regulatory trends

affecting potential demand

4. Business Assessment

A realistic business assessment to helpdefine industry opportunities.

■ Overall current environment■ Size of opportunity for commercial

roofing■ Impact of energy regulations and

code changes■ Changing customer requirements■ Evolving channel dynamics■ Challenges for industry success

In Focus

Material

■ Asphalt-based systems • BUR (built-up roofing)• Modified bitumen

- SBS (styrene butadiene styrene)

- APP (atactic polypropylene)

• Shingles■ Liquid applied ■ Metal

• Standing seam• Exposed fasteners

■ Single ply• EPDM (ethylene-

propylene-diene monomer)

• TPO (thermoplastic polyolefin)

• PVC (polyvinyl chloride)■ Liquid applied ■ Metal■ SPF (spray polyurethane foam)■ Tile■ Others

Construction Type

■ New ■ Repair, remodel and

replacement

Category

■ Low slope■ Steep slope

Market

■ Education■ General commercial■ Government■ Housing and lodging■ Industrial■ Retail■ Warehousing and storage■ Others

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■ A&D community, property owners• Points of influence for efficient selling• Key factors that influence material

selection• Usage and preference trends• Brand awareness and its influence on

specifying • Influential information sources• Preferred sales approach from

manufacturers and channel partners• Others

■ Contractors• Product usage, competitive materials

and system preferences• Code adoption and impact on building

practices• Shifts in material needs• Key influencers• Preferred brands and materials• Others

■ Distributors and dealers• Material demand shifts• Channel changes• Inventory levels• Brand preferences• Others

Subscription Features

Commercial Roofing 2016 is the indispensable tool for decision makers, offering a

definitive 360-degree view of the industry including primary metrics defined by category,

material, building type, construction type, market sector, region, distribution channel and

supplier. The report explores key issues affecting national and regional markets.

Voice of Customer Survey: Understand Critical Market Success Factors

Voice of Customer research captures 500 market touch points, including interviews and

surveys with architects, roofing consultants, contractors, distributors and dealers and

property owners. The research reveals information focused on brand awareness, preferred

manufacturers, material and product preferences and other important factors such as:

Market Model and Forecast Tool: Create Your Own Forecasting Scenarios

A key feature for subscribers is the market model and forecast tool. The interactive market

model tool enables subscribers to evaluate the market through whatever lens they choose.

The market model and forecast tool is based on Principia’s proprietary process used to develop

industry forecasts and demand assessments. Key variable data include base year assumptions;

forecast year-over-year GDP growth; population growth; market trends and other related metrics.

This analytical and planning tool will enable clients to construct their own “what-if” scenarios

of future demand and growth to develop their go-to-market strategies.

■ Base year assumptions

■ Forecasts of year-over-year commercial construction

■ Building permits and remodeling spending year-over-year forecasts

■ Material share and penetration rates of commercial roofing by material, building type,

construction type and region

Report Methodology

Principia maintains a building products and construction industry database that serves

as the starting point for the research. In addition, Principia utilizes on primary research and

surveys to develop the data and information for its industry studies.

Using the Report

Commercial Roofing 2016 provides a vital baseline analysis for forecasting and business

planning for current and new industry participants. Using 2015 as its launch point, the

report analyzes demand drivers and trends by material, construction type, distribution

channel, supplier and region, providing forecasts through 2018. It also analyzes trends in

current products, new product developments and technologies, and competitive materials,

helping companies anticipate customer needs, plus insights into:

■ Up-to-date market size and forecast

■ Voice of Customer feedback on usage and preference trends

■ Channel dynamics and trends impacting demand

■ Market share review for leading producers

■ Strategic insights into the growth segments of commercial roofing

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Inside the Principia MarketModel and Forecast Tool

Information from different sources is compiled and analyzed to createdemand forecasts based on a widerange of scenario assumptions, including your own.

This powerful new web-based tool is designed around best practices of data visualization and

usability. The online platform enables users to login from any desktop or mobile device to access

all of the data from the report, with the added ability to instantly customize the data views with

their own information. Use the tool to:

■ Quickly analyze, visualize and share data

■ Create rich analyses and interactive dashboards with intuitive drag and drop functionality

■ Filter, drill down and combine multiple views of data with a few clicks

■ Instantly update with your own data and generate custom reports

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Why Subscribe?

The report is the essential reference for executives responsible for business planning at

companies involved in or planning participation in commercial roofing in North America.

These include:

■ Manufacturers of commercial roofing

■ Raw material suppliers

■ Distributors and dealers

■ Commercial roofing contractors

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Subscription Information

Scope

The report focuses on commercial roofing in North America, including the United States

and Canada.

Report TimingCommercial Roofing 2016 launches in the first quarter of 2016 and is scheduled for

completion in the second quarter of 2016. Principia is prepared to discuss report findings with interested parties to accommodate their specific information needs.

Charter Member SubscriptionA limited number of charter subscriptions are available to companies that purchase the report prior to launching the research. Charter subscription benefits include a significant price discount and input into the program design and study research. The charter

subscription rate is $15,000 for the report.

Non-Charter Member Subscription

The non-charter member subscription price is $17,500 for the report. All subscribers

to the full program are offered a private presentation by the Principia project team with

an open discussion about the report and to address any company-specific issues.

The consultation is included in the subscription price.

Subscription Agreement

Client agrees to subscribe to this multi-client, Commercial Roofing 2016.Client agrees to maintain the report as company confidential for a period of three years from the signature date herein. Client will not reproduce in part or inwhole the report by any means, will refrain from oral or written publication of anyinformation presented in the report, and will take every precaution to prevent thedisclosure of information in the report to any third party. Principia Consulting, LLC,will not provide the information contained in this report, in whole or in part, to any party that is not a subscriber to the program except for limited use for marketing purposes.

Client agrees to subscribe to this report for price noted in this agreement (payablein US currency). Principia Consulting, LLC, will provide an electronic copy of thereport for limited distribution upon completion and after the receipt of payment.Principia Consulting, LLC, will invoice Client for the full amount of the subscriptionfee. All invoices are due upon receipt.

To confirm your acceptance of this agreement, please have an authorized employee sign and return a copy to Principia Consulting, LLC. Once signed by both parties,this document shall constitute a legal binding agreement between both parties.

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