Fiber sculpture manufacturers are growing, but some of them don’t make enough fiberglass to support their operations.
The industry, led by the New York City-based FAST Group, has grown into the nation’s second largest, but is still making just $1.8 million a month from fiberglass sales.
As a result, it’s been losing market share to companies like China-based Bic, which has more than tripled its fiberglass production in the past decade.
While FAST’s CEO, Peter Fennell, says the company is on track to make $1 billion in revenue this year, many of its fiberglas suppliers have had to close up shop.
“It’s hard for us to be the go-to source of fiberglass for any large-scale projects because we don’t have a good supply chain,” he said.
“There’s just no way we can compete.”
But other companies like Fiber One, which makes the most popular fiberglass products in the United States, are also struggling to meet demand.
The company says it’s now making about $700,000 in sales a month.
Fiber One sells its fiber to companies in California, Colorado, Idaho, Kansas, Louisiana, Nebraska, Nevada, North Dakota, Oregon, Pennsylvania, and Texas.
Fiber makers have also been forced to increase prices.
Fiber maker Cylance has been increasing the price of its high-quality fiberglass by 40 percent.
Fiberglass maker FiberOne recently announced that it would sell its fiber for less than the cost of a new home.
Fiber suppliers say they’re struggling to keep up with demand for their products.
“Fiberglass is a great material, but it’s hard to maintain a reasonable profit margin on a product like fiberglass because it’s an investment in time, labor, and materials,” said Mark Cressey, a senior vice president at the American Fiberglass Association, which represents fiberglass companies.
“The only way we’re going to be able to keep doing this is if we continue to grow our sales.”
The industry’s woes are being exacerbated by rising labor costs and an increasing cost of living in the country’s capital.
The median home price in the Washington, D.C., metro area jumped by more than 20 percent from 2014 to 2015, according to Zillow, a real estate website.
In New York, the median home sale price increased by more $400,000 between 2016 and 2017, according a study from Realtor.com.
As of April 2018, the average price of a home in the New Jersey suburbs had grown by about $3,000 since 2010, according data from the Federal Reserve Bank of St. Louis.
The shortage of skilled labor also has led to a decline in the number of jobs.
“Our job market is still relatively tight in the construction sector and in the homebuilding sector, but in the industry overall we’re seeing a lot more automation,” said Richard Wertheim, president of the National Association of Home Builders.
“Construction is going to continue to be a large part of the workforce in the next five years.”
That could have serious consequences for the economy.
In May, the Federal Housing Finance Agency estimated that about half of the country would be unable to afford the cost and labor of purchasing homes in 2023.
The government’s housing finance agency, which is responsible for managing the federal housing market, is predicting that the country will need $1 trillion in federal assistance to maintain stability.
“If we are to maintain the quality of life in this country, we need to find a way to keep housing affordable,” Wertheimer said.
He called the shortage of high-skilled workers a “significant risk to our economy.”
“I don’t think we’ve had a shortage of good workers for a long time,” he added.
“I think we have a shortage, but we don, at least in this market, have a supply that’s going to keep that supply steady.”