Despite Economic Struggles, Hope is on the Horizon! | August 2024

We are at an interesting crossroads with our economy, and it’s curious to find that some companies are thriving and others are down on revenue against budget by 25% or more.

At the ABC convention in March, I was able to connect with various peers. It was interesting to hear that some of our subcontracting partners were down in revenue, which I found hard to believe. This was probably the biggest eye-opener for me.

Here are some of the reasons I have heard which will sound familiar:
• Certain market sectors have slowed, i.e., big box facilities.
• Interest rates are still high, and clients keep pushing for projects.
• Projects are taking longer to complete, pushing others projects out further than anticipated.
• Labor shortages and materials delays are hindering start dates.
• Contractors are being more selective due to the risk of lack of labor and materials.

This is an interesting dilemma we are facing. The Fed continues to push out an interest rate drop, although ABC Economist Anirban Basu of the Sage Policy Group suggests there should be a .5% interest rate decrease in September (we hope). Sage also stated in their report that the jobs report fell below projections and appears to have flatlined in recent months. Material delays still seem to hinder us; things like electrical equipment still have very long lead times. That’s not good news, so what can we do about this? The construction industry is a vigilant group. We are used to getting things done no matter the odds, making us unique.

Here is some food for thought:
• Look at diversifying the market sectors in which you work. This was my #1 goal after the recession in the early 2000s, and it has worked.
• Never underestimate the importance of business development and networking. Especially the executive leadership and, most importantly, the CEO and President. Clients want to hear from the top.
• GCs and Trade Partners need to connect. Get out there and build those relationships. I find tremendous value in networking with our current and potential trade partners, and there is no better place than ABC mixers and events. But you can schedule lunch, learn, or hold internal company meets and greets.
• Work on the company! Process improvement is an ongoing effort throughout a company’s life cycle. It should never stop, even when we are so busy we feel we can’t. Take the opportunity to work on your strategic business plan, evaluate your policies and procedures, and get internal feedback on what could be barriers to success or what is working well and can be enhanced. The health of your company is as important as anything!
• Train, Train, Train! Build consistency across your company, and vet out complacency. It’s more important than ever for our employees to understand the importance of blocking and tackling, which drives success and, more importantly, eliminates risk. You will always hear me say that there is more to learn from our losses than successes. There is a lid on our profits but no bottom on our losses.

To sum up, we have a way to go before the most important election of our lives. If we get out and vote, we hope to see the dramatic changes we will need to see better outcomes for the economy, our companies, and our loyal employees. Meanwhile, no matter how busy or slow we are, we need to stick to a plan and always push forward to drive success.