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I would like to start a dialogue about the current construction slowdown which started in the residential market and has now spread to the commercial, industrial and public works markets. I am going to ask a few questions to get the discussion started.What does your company do?How has the current slowdown in construction affected you and your company? What steps have you taken to weather this construction slowdown both personally and for your company?How long do you see this slowdown lasting?
Josh, GREAT discussion. I recently sent a note to another member here and thought it would be appropriate for this discussion: I / We specialize in High-End (custom) Residential. I was in LA and now am in Lake Tahoe and both markets are dependent upon the wealthy to build luxury homes. There are a few planned communities up here like LaHontan, Martis Camp & Grey's Crossing which have proven to be very popular and also a solid place to build custom's. However, during this past year, although the lot sales have continued, the construction has not. I believe they are all waiting. Tahoe hasn't completely stalled, but it seems to be idling steadily.We have experienced a slow-down in construction and some clients have halted progress on their projects or put them on hold. This may pose a problem for us in the foreseeable future as well as for many other builders in the area. Numerous carpenters are looking for work and some builders are taking the winter off, hoping for better times in the Spring. The housing market has also seen a staggering slow-down although prices in this resort community are still holding fairly well. This also plays a role similar to the rest of the country.My outlook however is positive. I have high hopes that with the strong opening of the market today (the first day of trading in 2009) and with the inaguration coming in a few weeks, that we will see a resurgance of construction, at least in this area. We have been slammed with holiday / seasonal tourism, many of whom have their second home here or have been coming up from the Bay Area (or wherever) for years, love Tahoe and have always wanted a second home in the area. Our clientelle is, as I mentioned, on the wealthy end of the spectrum and I am betting that they fall in love with Tahoe all over again. Many will take advantage of the drop in long overpriced properties which will stimulate our housing market in general. I believe we will have a strong tourism season this Winter as well. This, combined with a strong buying (housing) market, low interest rates, loosening loans (I hope), an increasingly stronger stock market and the incoming Presidency should all work together to give this area the kick-start it needs. Mr. Obama will do well if this proves to be true around the country. I sincerely hope these issues, as well as others, play a part in bringing our industry back into full swing by the middle of Summer.Thanks,Bryan Bertsch
We are in the construction equipment supply business, and we feel the pinch that our clients do. I'm in the Sacramento market and the pinch is a little less than it is in the San Joaquin area, however, I'm sure that I can relate with most of you GC's when it comes to the bidding process. There's much more involvement from competition due to availability of work. Some smaller operations will lower the costing threshold just to get the work, and unfortunately, it will make them exposed to more debt and lose money just to do the job. So for us, we just look to expand our client base and branch out to other operations besides construction for our product. So we've been looking towards retailers and the Mom & Pop shops. I'm looking forward to the ingenuity of those who are the innovators to step into the light and generate the activity that seems to come out of slow times to spark the public. I think of computers, websites, etc that were developed out garages and basements. The future is always bright in the eyes of the creative.I always keep a positive outlook in all aspects in life, because success breeds more success and you can't win if you don't play the game. I know that sounds corny, but that's the way it is. Get ready for the next wave -- it's coming!
Josh, I poled my contacts in the industrial coatings market and interestingly they are not currently feeling the pinch and in fact are incredibly busy right now. However, to a man and women they are anticipating a slow down and attempting to make adjustments.Burt Olhiser, Principal Vantage Point Consulting
What does your company do?I am an architect in Connecticut designing residential, commercial and institutional projects and providing optional construction management/general contracting services.How has the current slowdown in construction affected you and your company?Revenues are down in '08. Laid off one person in the office. Did some reduction in hours for others. What steps have you taken to weather this construction slowdown both personally and for your company?We do not specialize in only one sector of the market. So we continue to get some jobs scattered in residential and commercial. We also derive additional work and revenue from some projects by provide CM or GC services.How long do you see this slowdown lasting?As long as lenders are tight and clients do not perceive an investment opportunity or advantage in spending money on planning or construction. Perhaps at least another 6 months.
Milton,I just wanted t touch base with you in regards to our products. I just read your post and my husband and I are looking to link in with others that may benefits from adding some additional services or value added items to their current clients.If you feel that any of our products would be a "value added" to any of your clients/contractors feel free to forward our information and website to them and we would be happy to assist. Our goal is to link up with other companys - large or small - to help them add money to their bottom line. We know that no matter where anyone lives here in the US, the economy is no laughing matter, so if we can help even in a small way - we would like to! Our website is www.ecoquestintl.com/puregenesis or they can call directly a 517-375-5399. They may also network with me through Contruction Exchange as well. Have an awesome new year and if there is anything for us to do to assist you in 2009 we would be pleased to do so!
I've been a building designer for more than 30 years, a substantial amount of which has been in residential work (single family production housing, high-end custom, multi-family, high-rise construction, etc.) Last month I was laid off because there simply wasn't enough work to keep me on staff. Two weeks later I was called back to work part-time with no benefits to finish a project I had been working on. I gratefully returned because there's nothing else "out there".I've been in the industry long enough to see several of these down cycles come and go, but this one is both very deep and very wide. We've seen a lot of both our domestic and foreign projects disappear, so it's not a matter of moving to greener pastures anymore.The scary part is the "ripple effect". Since being laid off I canceled a number of non-essential personal services; my wife is cutting my hair, I clean the pool and yard myself, cable tv without premium channels, less travel, fewer and cheaper gifts this Christmas, home improvement projects postponed, no dry cleaning, iron my own shirts, less eating out, etc.) as a result those vendors who have nothing to do with the construction industry will make less money from me and thousands of other consumers like me and their industries will be equally affected. Lay-offs will continue to escalate, things will get worse.My solution? As I said; spend less, work harder, be more adaptable, more flexible, hunker down and wait for things to normalize.Oh, and keep a positive attitude!
I am a construction law attorney in Long Island. We do most of our work on Long Island in the metropolitan New York City area and even with the slow economy construction has been booming. Of course some of the smaller firms have been taking huge hits because they have cash flow problems when a particular large job does not pay and that prevents them from being able to market or take on new jobs. From our end we have been counseling clients to pay more particular attention to two areas: 1) insurance coverage - making sure that they are in compliance with their policy requirements and making sure that claims are properly and timely submitted to carriers. When cash flow is low, having to pay an attorney to defend even a meritless claim against you can be fatal; and 2) paying more attention to the default and payment provisions of contracts to make sure that in the event an owner or GC goes out of business, you still have some type of security (to the extent possible) in protecting you. My pitch to clients has been its better to pay me for a few hours to revise your standard contracts now than to pay me thousands to fix a problem down the line. I have also seen a huge increase in non-payment litigation, especially the smaller matters that may have been ignored if the ecomony was strong.
We are having the same the downturn here in the uk'But my business is booming with new business taking advertising out wuth me. The reason being i think is our low cost, and the reach with have. More and more people are looking for trusted tradesmento carry out their works, I'm sure things will pick up soon they always do.Mick www.yourtrustedtradesmen.com
I am a residential construction General Contractor located in San Antonio. Although, San Antonio had a tremendous decrease in construction permits this year, their is still enough work to support efficiently operated companies. With the current industry climate you have to think and act differently in order to win the job. This slowdown has actually been a blessin for our company. We are able to shine through the competition offering a client a professional experience and a great value.Ultimately, this allows me to slowly gain more of the market. We should see an increase in permits registered by mid 2009 with 2010 being a very strong year.
Pitts Engineering Works, LLC manufactures the Concrete Titan Heavy Duty Concrete Mixing Trailer and the Titan Belt Loader. Our Concrete Mixing Trailer has a 1.25 cubic yard capacity, onboard water washout system, and a GVWR of 9800 lbs. This machine is the most technologically advanced, most robustly engineered, designed, and manufactured mobile concrete mixing trailer build anywhere in the world today.We continue to be blessed. With the short load fees forcing contractors and public work departments to cut costs, our business continues to expand. In the international marketplace our equipment continues to revolutionize the way that concrete is mixed, especially in 3rd world countries. The weak U.S. Dollar and working with the U.S. Department of Commerce on Exports has resulted in 2008 being very successful, and 2009 is expected to be a banner year.Even in the slow economy, work continues. We have found people actually spending money in order to acheive these goals. Our equipment is relatively inexpensive, as far as equipment goes, with the price of the mixing trailer being only $18,500 currently. We have partnered with two different lenders and find it very easy to get funding for persons/organizations wanting to keep their cash in the bank. One of our sources has a no payment for 6 months plan, which really helps those on very limited capital, as they make their first payment with profits from using the equipment, even with a 45-60 day lead time.The economy is not what it used to be. Certainly assisting people in cutting costs on labor, wait times, and materials is something that people who fully intend to weather the storm, and capitalize on current conditions has proven fruitful to our organization.I expect that the length of current economic conditions will turn around 1/2 way through 2009, as the new president will have a chance to attempt his promises, the auto industry is more certain, and when consumer confidence is restored. I am hopeful that the construction industry will not be delayed until after this happens, however we should not be surprised if economic conditions do not appear better and construction starts follow 2-3 months beyond.
Eli,Tough times call for change. Your members might be interested in changing back to the good ole days of Henry Ford. Henry is often referred to as the Father of Lean Manufacturing. In studying Henry's methods, which the Toyota Automobile folks have been practicing for nigh onto 60 years, I have discovered, with a lot of help from the Lean Construction Institute, that Lean Manufacturing methodologies can be used one-for-one by our industry. For those interested in learning more, they can contact me at eanderson@paladin.us.com. I'll send along a few of my favorite readings as a start.Happy Holidays!Ed
I have worked as a Process Improvement Manager for a residential homebuilder for the past 5 years. Now is the time to be Lean and eliminating the waste in the many areas of your business. For more information, I can be contacted at karenawarren22@yahoo.com.
A few more comments that I have received:Steve:We are in the commercial market in Nashville, TN and have seen about 20% of our backlog for 2009 go away due to projects being put on hold. Our work is typically all negotiated GC and design build but we have adjusted to the market by... 1)Selectively bidding projects we would not otherwise bid, 2) establishing relationships with large CM and GC firms especially those in healthcare and seeking self perform opportunities with them, 3) looking at new and different vertical markets, 4) getting more creative and varied in our marketing approaches, and 5) using LinkedIn and Facebook to reconnect and network more. I see it being 2010 before things really start turning around but I also see this economic situation as a real opportunity to fine tune our business approach and set the table for when things start taking off. The strong will get stronger over the next year or two and much of their competition may not survive. I also see a rush for talent and higher prices coming when all the bottled up projects start releasing in a year or two. Ashley:How has the current slowdown in construction affected you and your company? Our stock plan sales have decreased significantly over the past year. We have had to rely on custom plans and heavily on our multi-family planning to flow through this situation. What steps have you taken to weather this construction slowdown both personally and for your company? Personally, I have sold my large home and moved to a smaller location. I have had to sell my SUV and opt for a more economical car, we have cut vacations and cut back on spending. As for my company, we have ceased most of our higher dollar marketing and opted for less expensive avenues, we are not publishing our catalog this year, we have had to let employees go and we moved to a smaller office. Nonetheless, I feel that we will see a return in sales and that within the next 2 years business will continue to increase. This has happened before, though not on such a large scale, and it came back. I would imagine my concern at this time is all of the foreclosed homes that will be selling for much less than new construction. However, it is my hope that the banks will offset this situation with loan perks and so on, especially for first time home buyers. What I feel would be most productive for the economy is to see the government and bankers work with those who have or are loosing their homes and assist them in keeping their homes or perhaps getting back into their homes. I have not seen a program yet that addresses the issue of those who have already suffered a loss. It would be productive to see Thank you for the inspiring questions. Chris:I am based in the northeast market around Philadelphia and I have a satellite office in Orlando, FL. I operate a medium sized commercial roofing company. In addition, we are a partner with National Roofing Partners based in Dallas, TX. Our current market has remained steady for the middle part of the year but we are facing a slow down in the final days of the fall and the winter appears that it will be difficult. My greatest concern at this point is that we are not experiencing the normal backlog of request for quotes. I do not become as concerned if we are still quoting, but clients are not even coming to the table with potential projects. If quotes do not pick up, we will see a protracted slow down of at least 3 to 6 months. It takes an extended period of time to go from conception to contract and without the steady backlog of opportunities being quoted, the ability to bring a project into contract will be compromised. But as they say "from crisis is born innovation". Those who can innovate and bring a new dynamic and value proposition to customers will survive and flourish in this new economy.
We’re a Custom Sign shop licensed to produce and install all signage that is non-electrical.Yes, we too have felt the pinch of the current economy. We’ve felt it from our current customers who have in turn felt it and cut back on spending.What we have been doing is first to keep our “faith” as real is it gets. Secondly to realize that with respect to the effect