U.S. economy may finally be turning the corner
Like most industries involved in manufacturing and construction, the sheet-metal market has been trying to regain ground lost since the recession took away much of its forward momentum. And even if the government's economists are saying the nation's recovery is well under way, some contractors are still waiting for it to reach them.
It may be a long while before we return to the halcyon days of 1999-2000, but I got the impression things are definitely turning around after attending Metalcon last month in Tampa, Fla.
The metal-building convention has suffered from declining attendance the last two years. Metalcon had the misfortune of holding its 2001 show in Las Vegas just a few weeks after the Sept. 11 terrorist attacks.
According to show officials, this year's attendance was 6,623, a 496-person increase over 2002 figures. That's still far from the show's record 2000 attendance, but it's certainly a positive step. Show sponsors were pleased.
"The exhibitors were thrilled. Without asking, exhibitors were telling me it was the best show they've ever had, not just this show, but any show," said Claire Kilcoyne, vice president of trade shows for PSMJ Resources Inc. "They're pleased with the quality of the potential buyers. This location was great. We drew many new visitors from the region as well as international."
Many attendees seemed to have noticed the difference as well. "A lot different than last year" was a comment I heard often while wandering the floor of the Tampa Convention Center. Most exhibitors were upbeat, if not downright excited, about the quantity and quality of the people visiting their booths.
You may not be able to draw a direct comparison from the metal-roofing suppliers at Metalcon to a sheet-metal firm or HVAC company, but they're all part of the construction industry. If they're noticing increased interest, can a spike in business for sheet-metal companies be far behind?
Still, predicting the future is hard (as I'm reminded every time we work on this issue). Many people have a natural tendency to be nearsighted, in business as well as their personal lives. When times are good, many people think the good times will last forever.
A good example is the 1998 survey on the duct-fabrication market commissioned by the Sheet Metal and Air Conditioning Contractors' National Association. The report was done at a time when the U.S. economy was amazing analysts with its strength. The Dow Jones industrial average was hitting record highs almost daily.
SMACNA's 1998 report, prepared by construction industry researchers FMI Corp., showed many contractors expected the robust economy to cause major changes in the way they did business within the next five years. Most thought fewer companies would work under traditional fabrication-and-installation contracts. Many contractors had more work than they could handle, and many were turning to fabrication-only companies to meet the demand.
At the time of the 1998 report, the survey predicted these "fab-only" firms would make 44 percent of the duct installed in the United States within five years.
But when FMI conducted its follow-up, the reverse had happened: duct made by fab-only companies had dropped four points from its 1998 levels. Now it's estimated fab-only shops will only command 37 percent of the market by 2007. Layoffs, overcapacity and the slow economy are blamed.
Here's hoping that by the time of SNIPS' 2005 forecast, all of our readers will be enjoying booming businesses.