What Recession? Glass Companies See Improved Numbers in 2023

Despite the persistent threat of a recession, labor shortages and various other economic and social concerns, demand in North America for architectural glass and glass-related systems has remained strong. According to several publicly traded companies, this is due to a firm U.S. market and increased demand for sustainable alternatives, such as solar energy glass.

NSG Group reported in its financial report reflecting the first quarter (Q1) for the three-month period that ended June 30, 2023, that solar glass demand has remained robust this year. Officials say the Group even seeks to convert an existing float furnace and build a new furnace in the U.S. to handle solar glass. The move would enable the Group to “pursue the largest return on investment,” say officials.

For ASSA ABLOY (ASSA-B), the second quarter (Q2) of 2023 ushered in good sales growth in North America for its entrance systems, says president and CEO Nico Delvaux.

According to several glass companies, a firm U.S. market and increased demand for sustainable alternatives, such as solar energy glass, has been a welcome surprise in 2023. In fact, NSG Group seeks to convert an existing float furnace and build a new furnace in the U.S. to handle solar glass.

Regionally, Delvaux says that activity in the Americas was high during Q2 2023, and the company reported sales growth of 4%. This was led by strong U.S. residential numbers and sales of access and high-security products. ASSA ABLOY officials add that organic growth was solid in North America for architectural hardware and stable for security doors and electromechanical solutions.

While ASSA ABLOY reported marginal growth in Q2 for its entrance system, Tecnoglass Inc. (TGLS) recorded record revenues in Q2 2023, fueled by continued strong performances in all end markets.

“Our facility investments to expand operational capacity have increased our installed production base by over 40% to an amount equivalent to $1 billion of annual revenue, exceeding our prior expectation of $950 million,” says Christian Daes, Tecnoglass’ chief operating officer. “This on-time and on-budget project is another exciting milestone for Tecnoglass and better enables us to meet the demand for our high-performance products while further shortening lead times and reducing waste. These strategic investments in automation and physical footprint are proving to be well-timed as we continue to produce double-digit growth in both our multifamily/commercial and single-family residential businesses.”

Tecnoglass officials add the U.S. market represented 95% of the company’s total backlog in Q2. This is due to increased geographical diversification and strong activity in the Southeastern U.S., which remains Tecnoglass’ strongest region.

Apogee Enterprises’ (APOG) architectural divisions also experienced a strong start to 2023. Earlier this summer, the company reported in its fiscal 2024 Q1 financials that its architectural glass segment grew by 27.5% compared to this time last year.

“Our first quarter results were led by exceptional performance in architectural glass, building on our progress over the past two years,” says CEO Ty Silberhorn. Officials add that the segment’s growth was due to improved pricing, higher volume and more favorable sales mix. They explain that the move to emphasize premium, high-performance products was critical to the segment’s increased sales.

What About That Recession?

While forecasters had called for a recession in 2023, experts now anticipate strong Q3 growth. Economists at the Federal Reserve predict that the U.S. will avoid a recession in 2023, with a slowdown in growth to come in 2024.

For some glass companies, early 2023 financial reports have added a dose of optimism to a year that was expected to be bleak.

“We now expect full year 2023 revenues to grow to a range of $830 million to $855 million, representing approximately 18% growth at the midpoint, and entirely organic …” says Santiago Giraldo, Tecnoglass’ chief financial officer. “Given the first half weighting of income tax payments and planned growth capex, we expect to deliver stronger free cash flow for the rest of the year.”