Thursday, February 10, 2011

A Contractor's Thought About the Future of Our Industry

The results are in. Last week Washington announced that the unemployment rate dropped to 9% and that industry had created 36,000 new jobs. If you listened to the media, miracles have been spun and the future is bright and rosy, or is it?

The truth is, the math doesn’t add up. If 36,000 new jobs had been created and 600,000 fewer people were off the unemployment line, what happened to the unmentioned 564,000 people? It appears that Washington and the media isn’t going to talk about them. I guess they’re invisible.

And this is only the beginning.

Look around you, things have changed and our world is different. The two biggest sectors of industry that employed people, Manufacturing and Construction have been silently shuttered. Over 43,000 manufacturing plants have been shut down since NAFTA took hold in 1994. That means jobs that we no longer have and jobs that have left this country.

The unemployment rate in the construction industry now exceeds 20%. Unfortunately, that number only counts that collecting unemployment. However, what about the self-employed contractors who can’t collect because they are ineligible, don’t have work or customers to support their basic needs and are slowly devouring their life’s savings?

When you look at it in this manner, you might be wondering, how worse can it get?

Here’s a thought or two to chew on.

Real estate is dead. Waiting for it to return would be like waiting for typewriters to replace the IPad. Furthermore, if it does, we could be looking at 20 to 30 years down the road. It also brings another burden to bear. So many people have their money tied up in real estate, they will be caught short and forced to live where they are and not move up like in the past.

That means repairs, remodeling and renovation will be more attractive than new construction.

Let me explain.

In case you hadn’t noticed costs are escalating. This is in part to the reckless spending in Washington, bailouts and stimulus and of course, quantitative easing. All this has contributed to the devaluing of our dollar, and that means rising costs (inflation). Higher construction costs make staying where you are and repairing, remodeling, renovating, or renting, more attractive.

To further add to this is rising fuel costs. People will be caught between an axe and a grindstone if they live too far from work. This will start a trend to live closer to work and a need to cut down on travel costs. Younger workers and families who can’t afford to buy will be renters. I believe we will see an up- trend in communities of homes and apartments built closer to work hubs.

The truth is things will not get better until Washington does some serious cutting and focuses on re-building our manufacturing base. Without manufacturing at reasonable and competitive wages without all the messy government regulations, our nation cannot start producing the products that made this country great to begin with.

Lets be realistic, this being a nation of consumers isn’t working.

Construction also is a big factor is solving the unemployment problem. Unfortunately, government is broke. Trillions have been foolishly spent on the shovel ready jobs that produced very little of anything. That means that a prime opportunity to jumpstart the economy with public works projects have passed, and we’re left paying the tab. What really amazes me is that no one is screaming and wanting to know where all that money went.

At the present pace that Washington is working on solving our financial mess, we could be looking at 50 years or more. However, we the people with our voting rights can change that quickly. Every American needs to take a hard look at their incumbent and not be afraid to vote them out for those who promise tough reforms on the tough issues. Never mind how much pork they brought home, the pig is dead because they’ve skinned it alive already.

Without the working middle class that pays taxes and buy products, and can’t do so if they do not have their jobs in manufacturing and construction, nothing changes.

The result?

We will have no choice but to live within our means. It is being forced upon us. The options you have today will be gone tomorrow. A lot more is going to change and you better be prepared to change with it, or it will feel like a steam roller running over you.

Now is the time to take a deep breath and realize what is happening around you. Change is upon you and if you ignore that change and fail to adapt yourself to it, you will get left behind. And yes, I am doing the same for myself that I am recommending right now to you.

The way I see construction changing is simple. People will still have to spend some money, and they will be selective. I can almost guarantee you that where they live and work will be a priority. That means repairing, remodeling, and renovating in both the residential and commercial sectors will produce a demand. That demand won’t be overwhelming, which means the smart and astute will get what work there is. They will have to market and control their costs. Waiting for your phone to start ringing off the hook with work means you’ll be waiting a long time. Working for nothing or too cheap, means you’ll be broke.

All of us have to pay our debts, live within our means and force our elected officials to do the right thing. Keynesian economics and its big government approach as the solution to our problem is the problem!

We are a great nation filled with great people who have brought huge leaps in progress to the world with our free thinking, products, innovations and ideas.

Some say that the whole idea of America being the leader of the world is over and that free enterprise is dead.

I say hogwash to that.

Our Founding Fathers knew they were embarking on a daring experiment. They laid the groundwork and gave us the map to follow. Somewhere, we’ve gotten off the path, and we need to get back on it.

What a novel idea they had, free men free to be innovative, creative and enterprising. To be whatever they wanted to be, to go as far as they wanted. No wonder it worked so well.

The truth is no other country has ever done a better job of reigning supreme over the world than America.

It is said that if a great nation doesn’t rule, then an un-great one will.

Some say it will be China. However, they can’t walk the talk. Think about it. Are they as innovative as us? Are they as technologically advanced as us? The answer is no. Their GDP is only one-third the size of ours. At their present pace of growth, it will take them 20 to 30 years to catch us.

Unfortunately though,

The problem is that our present government will do its best to screw things up, but we have no one to blame but ourselves. Americans have to be far more intelligent and less emotional when it comes to the voting booth. We need to get back to our roots, our constitution and the fundamentals that our Founding Fathers established for us to be the great nation of free men and woman whom they envisioned.

In the future we must be careful how we cast our vote. We must understand the issues that confront us, the problems that besiege us, and the actions that must be taken, no matter how difficult, in order to free us from them. We must elect those who will do our bidding and not use our vote for their own selfish means, self-centered goals and financial goals. It's time that they got paid what they are worth, and that means they are getting paid too much!

The greatest strength of our country is its people. We are innovative; free thinking, hard-working and industrious. Our most powerful asset is our ideas.

When you set ideas free, you set business free and everyone benefits. Government can’t do that. Reality is, we need government to get out of the way!

I believe that we can get back to doing that, set our ideas and innovation into motion and this is the key to latch onto: Ideas and innovation set free today will become the breakthroughs of tomorrow.

Right now the economy is a roller coaster ride, putting your stomach in the uncomfortable feeling of being stuck in your throat. It’s hard to think about anything, let alone getting ahead. Especially when you have so much pressure squeezing you from all sides, and you have no clue what tomorrow will bring you.

It’s almost a flight or fight decision.

It must be similar to what the cave man felt when a mastodon showed up at the cave door.

Like the cave man, it’s important to keep a clear head and not let your emotions take over. You need to examine the situation, plan, take action and keep a clear head. Because …

It’s not the size of the mastodon that is the problem …
It’s the size of the opening to the cave.

You see, there might not be such as big as a problem for you that you perceived at first. Instead of being reactive, maybe you just need to be “active” and build a smaller opening to your cave.

America’s future and your own, depends on what you do today. I can not emphasize this enough.

The time for panic is over; the need for despair behind us no matter what the future brings us. Now is the time to sharpen your business saw, clean your tools, mend your fences, learn how to market your construction services, and slash the fat out of your operating expenses.

The time to get started is now.

Our free ideas, free market, and free enterprise are still the best way to turn this country around and get it back on track. The sooner we start working on it and demanding our politicians work on doing the right things for us, the quicker we can get back to work.

Let’s put our house in order and notify our government to stop trying to transform our America into something that we neither want nor will not work.

We don’t care about the rest of the world; it is time for the rest of the world to lift itself up to our standards. You politicians have had your chance, now do it our way. We’re ready to get back to being number one again, and we know what works. Its American innovation, entrepreneurship, leadership and ideas, now step aside because we’ve got work to do.