I had the opportunity last week to attend McGraw-Hill's 2011 Construction Outlook. This is the session every year where their chief economist, Bob Murray, presents his outlook on the construction markets in the year ahead.
Bob was a bit subdued this year, as he acknowledged that 2010 has been worse than expected in almost all segments. Public works projects, especially roads and bridges, were strong, but there continues to be general weakness almost everywhere else. Also, in his view, the Stimulus did get money into the construction markets in a number of areas (such as federal buildings), though that effect is winding down now.
The core market we depend on, education, will end 2010 with an 18% reduction in square feet in terms of construction starts. This is much deeper than Bob expected, and has been driven by the serious fiscal crises existent in most states.
Demographics are turning favorable, and there remains a serious issue in this country with old school buildings in poor condition. Hence, there is solid underlying need and demand. But the funding simply isn't there, and 2011 is forecast to be down another 8%. 2012 should see some pick up, but I fear we are quite a few years away from just returning to levels experienced in 208.
Are other institutional markets any better? Not really. Churches are at a very low level. Stadiums and arenas have shrunk dramatically, as have convention centers.
So - we can't ride market growth to keep our Company growing. Instead, we must use product innovation, better marketing, and superior salesmanship. The Hussey brand of quality and expertise will keep us strong, and when this recession ends we should be the better for it!