I’m almost beginning to think we’re going to skip next year and jump right to 2013.
Starting this past September, I’ve attended national conventions of all the construction industry professionals mentioned above. At each one, people have asked me what I’m hearing about where the industry is going.
I like to turn this question around and ask them how their business is doing. This is how I collect much of my information on where “the industry is going” and why I’m beginning to wonder about 2012.
Almost everyone I spoke with answered my question by talking about 2013 and beyond. After this happened a few times, I would hold up my hand and ask, “Hey, what happened to next year?”
The good news is that no one expects a down year in 2012. On the other hand, only a few foresee a big spike in business.
Most predict a year when their revenue is flat or up slightly. The prevailing mood has been one of uncertainty, usually tied to the housing market and the outcome of next November’s national election.
With the still large inventory of unsold and foreclosed houses on the market, no one is predicting a big rise in new home construction in 2012. Faring better will be repair and remodeling work, with plumbing contractors and others already seeing activity pick up.
What’s different about these remodeling jobs is that they’re on a smaller scale than they were in the past. The intent is not the same either because they are being done to benefit the current homeowner rather than a future homebuyer.
Homeowners figure they can’t sell their home anyway, so they may as well make it as comfortable for themselves as possible. They’re thinking long term, and this will increase the popularity of products and designs that will allow homeowners to age in place.
On the political front, TV commentator Chris Wallace at the American Supply Association convention told plumbing wholesalers that next year’s election will not pit President Barack Obama vs. a yet-to-be-determined Republican candidate. It will be Obama running against the economy.
Another speaker at the same meeting, business writer Gene Marks, pointed out that a number of large corporations and other companies are posting big profits right now despite the economy and political uncertainty.
“Smart people put aside emotions when they talk about government and politics,” he said. “They deal with facts.”
Marks identified five trends that could help businesses increase their profits. One or more of them may prove useful to your company:
- 1. Follow the money.
Companies should go after industries that are growing. These include health
care, technology, infrastructure and alternative energy.
2. Rightsize your company. This does not have to mean layoffs. More companies are outsourcing some of their operations, such as their phone service, to specialists. They’re also allowing some employees to work from home, which takes up less space and could lower rent.
3. Follow the Fed. Companies should keep an eye on what the Federal Reserve Board is doing with interest rates. Taking short-term debt and making it long term may make sense.
4. Consider the cloud. Cloud computing allows employees to do what they need to do wherever they want to do it.
5. Follow a few favorite metrics. Business people can get an idea where the economy is going by regularly following metrics as diverse as the Baltic Dry Index, Consumer Confidence Index, Divorce Index and Underwear Index. Some like to track the price of steel and copper, which you may be doing anyway, or auto sales. Others have a favorite economist whose blog they read.
The calendar will turn to 2012 in less than a month. The reality is that you’re going to have to do business next year whether people want to talk about it or not. Skipping 2012 to get to 2013 is not an option.
So, our best wishes for a productive, profitable and happy 2012. For that matter, happy 2013, too.