Last year’s president, Lars Nilsson, Lindab Inc., Stamford, Conn., said in his final speech to members here that 2002 will see a slowdown of 10-15% in the commercial construction market. This will make for increased competition among both members and non-members, even though “every duct manufacturer with money to spend has invested in new or additional capacity.”
According to Nilsson, “There are for example now six manufacturers of stamped fittings when three could supply the whole market and there are three times as many duct machines as the market needs. Buying is going to be more fun than selling.”
However, he said SPIDA represents to its members an opportunity to better prepare themselves for success in the market.
There are three new board members:
Mark Froning, vice president/general manager of Price and Price Mechanical and managing director of Ovalformer LLC, both in Arden, N.C. The company has been a member of SPIDA since 1999.
Richard Lavalliere, president and chief executive officer, Northeastern Sheet Metal Inc.
Brad Thomas, vice president and general manager of Hamlin Sheet Metal in Garner, N.C. The company has been a member of SPIDA since the organization was founded.
The group is looking into the possibility of holding a mid-year meeting in late May or early June, possibly in Florida. Contact SPIDA for details: 803-732-5818; fax 803-732-0135; or visit www.spida.org.
Construction forecastIt’s no secret that construction spending is down for ’02, and was down overall for ’01. But those levels, while soft, were not all that bad either, and some sectors are actually seeing increases.
That was some of the insight brought to the SPIDA meeting via guest speaker Robert Murray, vice president, Economic Affairs, McGraw-Hill Construction Information Group.
There are some conflicting economic indicators as well. Consumer spending has remained relatively solid; however, this means that as the recession winds down there will be little in the way of pent-up demand as was characterized by past recessions.
Pockets of development remain strong: Las Vegas continues to sizzle; downtown development in Los Angeles, Philadelphia and Washington D.C. are expected to continue. But Washington state has been hit hard and has the highest unemployment rate in the country.
Power plant construction is expected to be down 25% in ’02, but that is after a very aggressive campaign in ’01 – brought on by power shortages, primarily in California.
Retail construction is off overall, but continues to be strong in pockets because of competition. As one retailer slumps, another seeks to take advantage by opening more locations.
A federal budget deficit is back after four years of surpluses, but the deficit is anticipated to be a relatively small one, on the order of $10-$20 billion, nowhere near the almost $300 billion deficit of 1992. However, it will reflect a decline in state and local government spending, which peaked at an all-time high in 2000.
Alteration work and renovations continue to hold their own, in both residential and schools. The average school building in this country, according to Murray, is 40-45 years old, and needs upgrading and repairs.
Sales of single family homes is expected to decline 2%, but overall levels are still sound and the average size of new single family homes continues to climb: it is now around 2,300-sq.-ft.
Low mortgage rates and relatively small annual increases in new home pricing has helped to stimulate the market.