US Update

Posted by Dave Farley
April 2nd, 2012

A few ideas, comments, and suggestions that may be of interest…

This past weekend, BC Wood and member companies participated in the 2012 Anchorage Home Builders Show at the Sullivan center in Anchorage, Alaska. BC Wood returned to the show after a four year hiatus and the general consensus from members was that the event was positive. We met and spent time talking to numerous people active in the construction sector across the state, and through these discussions some interesting observations were made.

Alaska is a unique market, in part due to its geographic remoteness but also due to the independent spirit of the people who live there. Alaskans like to describe themselves as a hearty people, who believe strongly in being self-sufficient, and most importantly having government of all types stay out of their business. In speaking with a number of builders in the market, they often referred to Alaskans having a frontiersman or libertarian spirit.

The reason for discussing this is the potential effect it has on Canadian manufacturers and exporters selling into this market. With this spirit comes a strong ‘Buy American’ or even stronger ‘Buy Alaskan’ mindset from most consumers. The ironic part of this is nearly every building product in Alaska has to be imported into the market. So while Alaskans like to tout the economic benefits of buying locally, the truth is they, by necessity, are more than willing to buy from the lower 48 states and Canada as well. The key to selling into the Alaskan market is to align yourself with a good local partner, dealer, or distributor in the state so that any perceived issue around buying imported product can be nullified.

The show itself was well attended and good sales opportunities were developed for members in the prebuilt housing, interior products, and log home sectors. The attendees were a mix of consumers, builders, and general contractors who were keen to discuss upcoming projects in the residential and light commercial construction market. Due to the relatively short building season, many attendees that we spoke to were ready to make purchases in the next few months. The economic conditions in the state are improving and many builders were seeing increased activity as compared to the past few years.

According to the Alaska Home Builders Association (AHBA), the three main cities in Alaska, Fairbanks, Juneau, and Anchorage, are seeing the mainstay of construction activity with Anchorage accounting for over 60 percent of new housing starts. The renovation and remodeling market is still considerably stronger than new housing construction and the AHBA predicts that it will continue to drive construction activity for the next year.

Anecdotally, we met with a number of people who were looking to build cabins, vacation, and dream homes on property they have outside of the metropolitan areas in places like Homer and Skagway. Due to the significant challenges of building in remote areas and the with short building season, these buyers were drawn to the advantages of prebuilt and pre-constructed housing offered by members like Linwood and Pacific Homes or by Bigfoot Log Homes.

According to analysts, with the Alaska economy improving and with continued oil and gas development in the state, the outlook for Alaska is positive. Market opportunity for BC and Canadian companies wanting to sell into Alaska is favourable. As with most markets, finding a good partner in Alaska is critical to developing a long term sales into the state.

For more information on Alaska or other markets in the United States, please feel free to contact me at  dfarley@bcwood.com

Comments are closed.