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Beyond the Economic Indicators

One of the best things about being in trade publishing is attending the various industry events and talking with all of the friendly, extremely helpful and knowledgeable people that make up the backbone of the metal construction industry.

One of the best things about being in trade publishing is attending the various industry events and talking with all of the friendly, extremely helpful and knowledgeable people that make up the backbone of the metal construction industry.

In attending this year's METALCON in Las Vegas and Greenbuild in Chicago, I had the opportunity to speak with many of the experts in the various market segments and get a feel for what they are seeing and hearing in the industry. For the most part, it seems that the metal construction industry is rebounding from the recession, albeit slowly and possibly in pockets -- either by region or by market segment.

That information is encouraging, but certainly cannot be considered "fact." It's more based on broad observations and non-specific, secondhand knowledge. But there is some more concrete data that would support that notion.

The Metal Building Manufacturer's monthly report for October asked its member for their expectations with regard to general business conditions in the next three months, and the results show cause for optimism. For November, 4 percent expected increased business, 75 percent expected the same level of business and 21 percent expected business to be down. For December, 8 percent said business should be up, 67 said the same, and 25 percent said business would be down. For January, 12 percent expected business to increase, 67 percent expected it to remain the same, and 21 percent expected it do decrease.

The bottom line is that for each month, November through January, more and more MBMA members expect their business to increase. While it's just a survey, it describes a very positive trend.

Ken Simonson, chief economist of the Associated General Contractors of America, provided a little more detail on the economic situation in an October newsletter focused on metropolitan areas, and his outlook was a bit more sobering.

Reports from the 12 Federal Reserve Districts suggest that, on balance, national economic activity continued to rise, albeit at a modest pace, during the reporting period from September to early October, the Fed stated in its October 20 "Beige Book," a summary of informal soundings of regional business conditions. Districts are referred to by the name of their headquarters cities.

"The recession may have ended for the overall economy, but not for construction in most metro areas," said Simonson. "Despite tremendous short-term help from the stimulus, this industry is a long way from experiencing a recovery."

With regard to manufacturing, the Fed reported that demand for construction-related products remained weak and future capital spending plans were limited, except in the St. Louis District where several manufacturers reported plans to build new plants or expand. There were some reports from architectural firms that activity had picked up, according to the AGC newsletter.

There were also some reports that tighter credit standards for buyers and small builders, along with general economic uncertainty, were stalling activity.

What I take from all of this information is simple: within the construction industry there are pockets of recovery, and that recovery will be slow and steady. But other areas are still stagnant, and may remain so until the banks can increase lending.

For more projections and analysis, look for our 2011 State of the Industry Report in the January issue of Metal Construction News.

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