What does your crystal ball say...?

[rmwarren]

I am interested in learning what folks here expect for the future, i.e. politics aside and based on your own business do you expect to see near/mid-term business improvement or not, and what leads you to feel the way you do?  ???  ???  ???

To kick things off, construction is ancillary to my livelihood, which is selling and leasing commercial properties throughout North America. I work with corporations and entrepreneurs, and while my own business is stable/ improving (i.e. I see more transactions happening) it is not seem to be rooted in general improvements to my client's business conditions. My business peaked in 2007 following 10-years of business growth, dropped by 80% in 2008 and I have not climbed back to 50% of the 2007 level since then. This is not a complaint, I am making a living and my family is healthy and secure, we are just much more frugal.

What I mainly see are businesses making shorter term commitments and mostly when they are forced to, such as when a lease is expiring they may move if they can lease/buy a better building for the same or less $$ than they currently pay. I rarely see businesses making commitments that are due to their business growing organically or expanding. In most cases businesses still won't commit for more than 3-5 years because of uncertainty.

Since I read the news none of this is really surprising but I am really interested in what others are seeing out there, and especially the conclusions they draw from it.

My crystal ball tells me that we are in for an extended period of stagnant growth and, for a lot of people, lowered expectations for their own lifestyle. It looks like a viscous cycle; since my family is spending more cautiously the businesses we patronize are not growing, etc. I looks to be a difficult cycle to break out of.  [unsure] Again, I am not lamenting that business is down from the peak, rather I am looking for indicators of where things are headed.

What does your crystal ball tell you?

 

[Brice Burrell]

....What does your crystal ball tell you?

I pretty much stopped checking the old crystal ball since this kept coming up. [tongue]

I do residential remodeling in Pittsburgh, PA.  Things have been up and down the last few years.  The winter and early spring of this year was pretty slow, it's been like gangbusters since.  Every job up until the most recent has been maintenance related work.  Only the wealthy seem to comfortable to do largish improvements to their homes. 

The calls have slowed since the weather is turning and the holidays approach.  Generally a slow down in the winter is not unusual but the slow spells I've had in the summer months has never happened before 08.

I'm afraid you're right, we're stuck in a viscous cycle fueled by uncertainty....

   

 

 

[Jonhilgen]

Been really fortunate the past few years.  Work has been steady mostly, gangbusters at times, with a week or two here and there with nothing.  I primarily do cabinet installs for the upper crust, but it worries me when I hear them talking about how hard it is for them to get a construction loan to build their house. 

Fingers crossed that there are still enough wealthy people out there willing to spend their money.  Then again, everything is on sale for them.

I would like to grow, rent shop space, hire a helper, but too gun shy.  Partially economically driven, partially personality driven, I'm not a risk taker (unfortunately).
Jon

 

[greg mann]

Business has been insanely good for us. We surpassed our 2006 volume, our previous record year, in mid-July. We make differential carriers for heavy trucks as a Tier Two supplier. It is definitely a niche business and we ride up and down with the truck industry. The average age of trucks on the road is the oldest it has been since they have collected that type of data and they need replacing. Of course, part of the reason we are so busy now is that we had three lousy years preceding this one.

The machining houses related to the auto industry that managed to survive, i.e., the good ones, are all doing well these days. Profit margins are not that great but they should improve over time, as the world economies mature and we learn the necessity of a robust domestic manufacturing base. It WILL happen eventually.

We see at least two more boom years.

 

[rmwarren]

Greg,

Your comment about robust domestic manufacturing interests me. I look around and see an underemployed US labor pool, rising overseas labor and transportation costs and the potential for cheaper domestic shale gas generated energy. This makes me wonder if we are looking at a "perfect storm" of conditions for a resurgence in making stuff in the USA.

One can hope...

 

[lumbajac]

Business has been insanely good for us. We surpassed our 2006 volume, our previous record year, in mid-July. We make differential carriers for heavy trucks as a Tier Two supplier. It is definitely a niche business and we ride up and down with the truck industry. The average age of trucks on the road is the oldest it has been since they have collected that type of data and they need replacing. Of course, part of the reason we are so busy now is that we had three lousy years preceding this one.

The machining houses related to the auto industry that managed to survive, i.e., the good ones, are all doing well these days. Profit margins are not that great but they should improve over time, as the world economies mature and we learn the necessity of a robust domestic manufacturing base. It WILL happen eventually.

We see at least two more boom years.

Glad to hear things are picking back up in the Detroit metro area.  Have a friend down there in diesel and the story is similar.  Hopefully the housing market too will stabilize - though don't expect a boom given the supply on hand (at least from what I've heard).

 

[pugilato]

I dont believe that housing (new construction, remodels) alone can support our economy.  We need to make things that we can consume internally and export overseas.  ABC news has been running recurring segments called Made in America that highlights that things made offshore are not necessarily cheaper than those made here.  Some are pulling their manufacturing out of China, because labor costs there are going up, and so is shipping the manufactured goods back here.

I think things will get better, in spite of the politicians, who will, of course, take all the credit.