Serial Thief Remains at Large
Following an investigation that included 269 first-hand
reports from victims, we’ve identified the thief who stole money from
construction firms nationwide.
His name: Residential Construction Decline, or RCD for
Long suspected as the mastermind behind the revenue
thefts, RCD remains at large, continuing to rip profits from nearly every
segment of the construction field.
Victims expressed outrage over the rampage that appears
without end. Or is the end in sight?
Welcome to the second installment of Adventures in Construction:
Trends from the Trenches. This blog focuses on the challenges now facing
the architectural, engineering, construction and mechanical field.
Last week Clear Seas Research surveyed our Building
Materials Panel and 269 of you responded. Thank you, and keep the
As a group, 42% of you indicated residential construction
activity has decreased or decreased significantly in your markets during 2008.
Every subset of our panel showed double-digit declines in 2008. Net declines
were reported by 35% of architecture and construction-related firms, followed
by 31% of HVAC firms, 28% of flooring firms, 26% of plumbing firms, and 12% of
walls and ceilings firms.
Here are some of your reasons for the decline:
“We have an 11-month inventory
of houses for sale right now. The builders can't compete with banks selling
“Poor economy and we live in a
state with very high taxes.”
“Oil speculation and sub-prime
mortgages. The price of energy is dictated by some yahoos in suits and not real
market forces. The energy price increase put the pinch on people who already
couldn't afford the homes they bought.”
“Once again people are scared.
All they hear is gloom and doom.”
“Changing of the guard. It seems
to happen every election.”
“Duh! People can't get loans as
“I live in MICHIGAN!”
Hey, I live in Michigan, too, so my initial reaction is to
take offense at that comment. Unfortunately, we’re exporting people to other
states at a rapid clip so I really can’t defend my home state.
There is so much negative momentum that this downturn must
be unstoppable heading into 2009, correct? Should you put your tools, design
software and product inventory in the attic and find new professions?
Not so fast. You are far more upbeat about 2009 than
I imagined. As a group, 29% of you forecast an increase or a significant
increase in your residential business next year. Almost one-half believe
residential construction activity in 2009 will remain at the same levels as
experienced today -- implying the decline has reached a plateau.
Segments like architecture & construction (-21%) expect
further declines. But flooring (+11%), walls and ceilings (+26%), and HVAC
(+9%) firms anticipate turnaround in 2009.
Here’s why you think things will improve in 2009:
“People can’t put repairs off.”
“The increase will be fed by
persons who have held back this year and very likely did not take an expensive
“We will diversify our product
“Only locally, as several large
distribution centers are set to begin hiring approximately 2500 employees with
“2009 should be better if
weather is hot instead of cool and rainy.”
“Stability in lending markets
after culling of ‘bad apples.’”
“I think a lot of investors are
waiting to see what happens in the presidential election before they start to
even think about investing.”
“The bottom has to fall out
Why are so many of you upbeat about 2009? Are you blind
optimists? Have you discovered a profitable new niche? Did you win the lotto?
Post your comments to this blog and share your insights. We
need to hear them!
For more information on the survey conducted by Clear
Seas Research, contact SurowiecB@clearseasresearch.com or ShammamiF@clearseasresearch.com.