After nearly nine years of either flat or declining sales, all of us in the construction industry are cautiously optimistic that a new administration can make business great again.
During his presentation at the national sales meeting, Star Building Systems president David Alexander reminded everyone “you can’t predict; you can only prepare” – and shared some industry insights and projections to help builders do just that.
Overall, the national economy is experiencing mid-cycle growth and, according to the Metal Building Manufacturers Association, with that growth we can expect a minimum 2.5% GDP and at least two federal interest rate hikes in 2017, with inflation continuing to accelerate.
With so many Americans – both on the industry and the consumer side – anxious to see change, the positive signs have been steady, with consumers spending more and many building companies staffing up in anticipation.
Since the election, the most significant growth areas affecting the metal building industry have been in the institutional, agricultural, manufacturing and commercial sectors, with commercial spending up nearly 50%. And with President Trump’s vow to invest as much as $1 trillion in infrastructure over the next decade, the future could hold even more promise.
According to Kermit Baker, Chief Economist for the American Institute of Architects, there are five areas in addition to infrastructure that will be affected by Trump’s election and will likely have a trickle-down effect on the construction industry: trade, immigration, tax reform, regulations, and finance.
Trade policies intended to bring jobs back to the United States will likely lead to increased prices on building materials. At the same time, stricter immigration policies could reduce the available labor force and increase wages, leading to higher overall construction costs. Trump’s tax reform plans should filter more money into the economy, including more available capital in many areas, including construction. Lastly, the President’s support of removing regulations could significantly speed up the construction process overall, helping to reduce costs.
To sum it up, there are a lot of factors at play; but it’s an exciting time for our industry right now, and at Star we are happy to be looking back on the first quarter of 2017 as the best in nine years. Our success is a reflection of our builders’ success, so the positive outlook we have for the next few years is doubly satisfying.
As David’s quote from Louis Pasteur reminded us all at the close of his presentation earlier this year, “Fortune favors the prepared mind” – and your Star Building Systems representative is always available to help you prepare for what we believe will be a great time in our industry.