We’re two full months into 2017 and going to press with our third issue. So far this year, two of our major features, January’s “State of the Industry” and this month’s “36th Annual Contractor Survey,” deal substantially with the economics and prospects for the construction industry. In the survey, we asked readers to look back at the industry’s performance in 2016 as compared to 2015, and asked them to anticipate what their businesses will be like in 2017.
It’s the kind of information that our readers can apply directly to their businesses. We’d all like to have a crystal ball to predict the future. In many ways the advice of the experts we pull together in “State of the Industry” and the opinions of fellow contractors reported in the “Contractor Survey” offer just the right blend of information that can serve as a crystal ball.
But there is danger in predicting the future, which is the lesson of almost every fairy tale ever. Predictions come with hidden dangers and are notoriously easy to misinterpret.
I encourage skepticism when reading any forecast. Have you ever seen an economist’s line chart for activity, such as put-in-place construction or housing starts? For the data in the past, the line jumps up and down, moving around like a plane through turbulence. Then, at a dotted line that represents the present, the line changes. It reaches out into the future in a straight line, trending either up or down, remaining rigidly straight, a dart flying toward a distant target. The line of the past is the truth. The line arcing out to the future is something other than the truth. The only thing we know for certain is that if you selected any point on that line in the future, the probability is that that data point is wrong.
So, what is a business person to do with this information? Gather it in. Put it in the context of your own experience about your own business. Weigh it against the opportunities you see in your market and from your network. Put the information alongside and compare it to the threats you see that could hurt your business.
We are all just guessing about the future, because we know that it can change at a moment’s notice. No one I know anticipated 9/11 and the turmoil that caused. My own fledgling business, begun just months prior, barely survived the slowdown caused by the terror attacks. But looking back, we knew there was nothing we could do that would have changed the course we took prior to that bright, beautiful, terrifying day in September 2001. One of the best pieces of business advice I ever received came during that start-up. An experienced and successful contractor told me, “Take care of the downside, and the upside will take care of itself.”
When you’re looking over our “Contractor Survey,” I encourage you to channel your skeptical side. Look for the signs of trouble and identify the potential pitfalls for your business. Plan for them, make sure you’ve indemnified your business from those dangers, because the greatest hazard to your business comes from believing that the straight line going out into the future is the truth.
That lines represents what you hope will happen, and hoping something will work out is the death of a successful business. Don’t hope. Plan and execute. That’s how you take the information and turn it to the benefit of your company.