I'm sure that the economic news has been tough on your nerves these last few months. It's hard to avoid the talking-head syndrome of gloom and doom in regards to residential construction, which is understandable since many mason contractors rely on this market for a sizeable portion of their business.
On September 26 - 27, Hanley-Wood hosted more than 300 construction industry professionals in Chicago to discuss the economic forecasts for 2007. At the 2nd annual American Housing Conference, we provided attendees a wealth of expert economic information on the 2007 housing market, and unveiled some groundbreaking research on what baby boomers really want in their next home and about buyers of the future.
I left the conference with some clear recommendations on action points that could help mason contractors survive the downturn.
Work for homebuilders who practice just-in-time. Economic data clearly shows that many markets have an excess of homes in inventory. Many homebuilders have seemingly overextended themselves and now are forced to accept lower margins on existing properties. They may try to force you to accept longer payment terms.
Try to find markets that aren't affected by overbuilding. Tom Flynn, president of Hanley-Wood's Market Intelligence Division, reported that a number of markets will remain strong despite what the national average suggests. Look for regions where there is increased job growth.
Partner with homebuilders who have good business plans. Experts predict that one of the hottest markets will be homes built for the over 60 age group. An exclusive Hanley-Wood research project discovered that a baby-boomer turns 60 every 8 seconds. This group of buyers traditionally favors masonry products and has the money to pay for them.
Stay lean. Experts are suggesting that most new construction will be for the custom home market. These projects will be fast-paced. Mason contractors who have invested in labor efficient equipment will definitely have an edge.
Look commercial. While the housing market may be slowing, the commercial and public works markets are gaining momentum. Now could be the time to sit down and look what it would take to profitably compete in these markets.
Invest in your company and your industry. Every contractor knows that building cycles are part of the business. Slowdowns can provide an opportunity to spend more time in developing your staff. Ask suppliers to provide some training. And just as important, now is the time to get involved in your market.
Young mason contractors should pay close attention to our article on Ed Davenport, MASONRY CONSTRUCTION's 2006 “Industry Leader of the Year.” His dedication to the industry has not only benefited his family, co-workers, and clients, but you as well.
We need more mason contractors like Ed Davenports in our industry. It's time for leadership to urge cooperation, rather than division. It's frustrating to watch as well-funded organizations continue to focus on self-preservation rather than initiatives that would better serve their members.
If we want a bigger piece of the housing market, it will take a strong nationally coordinated effort to enhance masonry as the preferred building choice. It's our only insurance policy against economic downturns.
To learn more about what the experts are saying relative to the 2007 housing market, we have posted their information onwww.americanhousingconf.com. You'll find the economic information listed under “Speaker Presentations.”