Let's face it, hard times are spreading just like the flu. Everyday, you hear of someone who has lost their job, or a contractor that has gone out of business. Hard times have affected everyone, including my family. My sister-in-law recently was relieved of her job working for a newspaper in southwest Ohio, which coincidentally is an area where construction has ground to a halt.
At Concrete Construction, we often are asked about the status of the residential and commercial construction industries, and when the industry may record positive growth. Of course, our information comes from various sources—including feedback from our readers in the trenches, concrete and general contractors.
At the 2009 World of Concrete (WOC) held this past February in Las Vegas, the CC editorial staff intuitively asked dozens of contractors about their business and how it is performing during these uncertain times. Answers varied from “I have more work than I can handle” to “I haven't had a job in three months.”
Responses reflected diversity among commercial and residential contractors, but also between market segments. Some decorative and warehouse floor contractors have been doing brisk business, while residential foundation and tilt-up contractors experience depressed markets.
However, if there is one thing I could bring away with me from WOC, it is the sense of optimism from everyone I spoke with during the week—contractors and manufacturers alike. Sure everyone knows times are hard, and we have never encountered a downturn in the construction industry as deep as the past few months. On the other hand, most agreed the industry will turn around, get back on its feet, and start building again.
There is hope the stimulus packages recently signed by President Obama will help, certainly for the contractors pursuing government construction as billions of dollars are poured into the nation's crumbling infrastructure.
Of the many equipment manufacturers I spoke with at WOC, most expect construction equipment spending to remain stagnant in the first half of 2009. However based on the economic stimulus package, many believe spending will improve in the third quarter, with even more acceleration in the fourth quarter as the demand for equipment increases concurrent with the uptick in construction work.
The true health of the construction industry depends on housing starts. Recovery will not be evident until three consecutive months of positive housing starts are recorded. Have we reached rock bottom for housing starts? If we haven't already, we certainly are close.
All told, the contractors and manufacturers at 2009 WOC can sense the rebound on the horizon. The contractors were in Las Vegas to buy equipment, continue their technical education, and network with peers. Meanwhile, the equipment manufacturers continue to roll out new equipment, software, and innovations.
The pent up demand for new construction is looming, and one contractor at this year's WOC may have summed it up best: “Americans build, that is just what we do.”