Winter Forecast

A faint optimism stirs within the US demolition industry while an implosive European debt situation keeps the flow of cash in check.

My dim sanguinity emanates from an unusual trend of tighter bid spreads on large private and public bid opportunities. Many firms over the past year left incalculable sums of money on the table in a desperate effort to keep machine moving.

In the cyclical trade tide of everyone waiting to get paid, the following has been a constant factor: demolition contractor fronts hundreds of thousand of dollars to get a job(s) started – subcontractor(s) dutifully perform work – client(s) sits on money owed to demolition contractor – company cannot pay subcontractor(s) - multiple entities enter into threats of liens, collections, and lawyer involvement as weekly payroll difficulties ensue.

When proposals on a million or multimillion job reflect a tight group of companies within $150,000 to $225,000 range and one guy sits at a margin 45% to 75% below the next low number. . .the winner here is essentially absorbed in an act of self inflected attrition.

The unlearned inculcation eventually reaches a critical point; the hemorrhaging of cash is unstoppable.

Incredibly, the few who stood their ground are the few left standing. Equitable competitors are staying tight on the numbers while the low-ball apparitions are starting to fade.

Nonetheless, the overall confidence within one industry contradicts unresolved European debt. The Dow Jones flitters over and under the 11,000 mark (The NIKEI around 10,000 and FTSE has a 200 point ebb/flow) over the last five days like a listless distance swimmer desperate to keep their head above water - the conservation of energy versus the necessary power to move forward is an enigma. These unknown factors dictate that essential-available reserves are kept in check for the foreseeable future.

The collective PIGS (Portugal, Ireland, Greece, Spain) have worked through Greek liabilities and as of late, the former Celtic Tiger has been revealed to be a kitten that casted a large shadow. Little ink has been vested on financial predictions concerning Portugal and Spain.

“. . . it was the epoch of incredulity . . .”