A Slow Beginning and a Strong End to 2021

by Paul Deffenbaugh | 4 January 2021 12:00 am

From a business perspective, most of those in metal construction appear to have weathered 2020 well. Most individuals in my circles appear to have stayed strong throughout the year in both incoming sales and shipments.

My most concerning aspect as we move forward is that the reported number of new construction starts in the nonresidential sector for 2020 are down about 25% compared to 2019, according to information from industry sources. At some point in 2021, this number is bound to catch up to those in this market segment. Though the drop in nonresidential construction will catch up to us at some point in 2021, the effects of the depressed starts in 2020 will be spread out during the latter half of 2021 and into 2022. The one shining star for our industry for 2020 appears to be in the residential sector, for both remodeling and new construction.

In addition, various sectors of the construction market—such as lodging, higher education and retail—will lag behind the anticipated second half recovery until the COVID-19 pandemic subsides, while other market segments—such as health care, warehousing and manufacturing—should be the market leaders.

Another area that shows promise is multifamily housing, which is beginning to pop up in suburbs around the urban hubs. As the remote workforce has gained favor, many current renters and homeowners are trading their trendy downtown smaller units for more open and larger floor space to accommodate their stay-at-home lifestyle. Whether in manufacturing or the trades, our industry will continue to experience a shortage in the workforce. As an industry, we must face this problem collectively to ensure that the construction and manufacturing sectors offer well-paid career options. We need to establish accredited training programs that will enable individuals to come into the workforce well trained and proud of their career path. Our efforts must be broad based, appealing to students in their developmental years of schooling but also to those in academia, showcasing an alternative to a costly four-year continuing education.

I believe that we will not experience any immediate drastic changes in government policy that will affect our industry. For the short term, current tariffs likely will remain in effect, our tough stance on China will stay in place, and material prices will remain high for the first half of 2021. A strong infrastructure bill is needed to aid in the economic recovery, creating jobs and higher wages for those currently not employed.

The events of 2020 may cause a slight setback in 2021 from the growth we have seen over the past few years. However, moving into late 2021 and into 2022, I expect the recovery to be underway in many of the market segments to allow for a positive future for our industry.

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James Bush, CSI, is the vice president of sales and marketing at ATAS International Inc.[9], Allentown, Pa. He is also the current chairman of the executive committee for the Metal Construction Association[10] (MCA). Bush has previously served as the chairperson of the MCA roofing council, MCA retrofit council, MCA roofing certification committee, and as the past organizer of the demonstration area at METALCON[11], the industry’s major trade show and conference, for many years. He was inducted into the Metal Construction Hall of Fame in 2014, and was the first recipient of MCA’s Patrick R. Bush Service Award in 2011.

Source URL: https://www.metalconstructionnews.com/articles/a-slow-beginning-and-a-strong-end-to-2021/

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