February proved to be far busier than what is reflected in postings here. The bid calendar was experiencing so much activity that it was not possible to meet the needs of all the RFP’s. I am hesitant to forecast that a strong first quarter will carry into the second quarter, but I remain cautiously optimistic.
Market indicators remain in an unnerving pattern; one of the more intimidating trends I noted was a triumvirate blend of a strong dollar, positive gold movement, paired with creeping oil – I dare someone to place this scenario into sane context.
While January housing sales posted an increase, numbers also indicated a slight uptick in housing starts yet more bubbles await us. Significant commercial lending is coming due and as a result, many speculate more bank failures. Additionally, consumer spending remains tepid, no significant positive impact coming out of job creation, and European dept reflected in the so called “PIGS” - Portugal, Ireland, Greece and Spain, point to the potential for another significant economic slide.
Amidst the present state of falling in and out of economic consciousness, many have asked, how does this translate into the types of demolition/environmental work that are coming into our office?
Despondently, public bid work continues to outpace private-negotiated opportunities by a significant margin. Only 18% of all work we have bid so far in the first quarter could be characterized as private. To further indurate the situation is that the folks who are facilitating private deals are no longer entertaining one or two trusted companies to bid a job, we are often battling five to seven competitors for a “nice” deal.
Healthy margins are becoming more and more difficult to achieve yet we remain committed to aggressive positioning. Geographically, a national job order contract with a Fortune 500 company is creating environmental abatement opportunities across the United States. Positioning our company on these abatement jobs will allow demolition opportunities occur – operations are poised to meet these new prospects. We continue to aggressively market our “green” approach to demolition and have advanced new contacts visa via references.
Showing posts with label construction outlook. Show all posts
Showing posts with label construction outlook. Show all posts
Monday, March 1, 2010
Tuesday, October 6, 2009
Champion Environmental Services, Inc. Update – Economic Outlook
Despite the continued economic impediment that exists in the real estate and construction related industries, we are still experiencing a high volume of solicitation for proposals involving demolition and environmental services.
Based on comparative metrics in relation to last year at this time, the degree of opportunity is up 18%. While the quantity remains elevated, the magnitude of projects taking place is on a smaller scale. Rather than full building demolition, many projects seem to center on interior renovations and build-outs. One could surmise that this is a reflection of cyclical construction patterns easing workloads as we turn into fall in anticipation of winter. However, the majority of retail, office, hospital, university, and multi-residential projects over the past four months have centered on minor to mid-size interior demolition projects.
Some Broad Conclusions.
Lenders are still reluctant to finance speculative or large projects. Convalescing older structures with minor aesthetic improvements in the $50,000 to $200,000 range of project cost seem to be experiencing little resistance to financing.
Another observation we have noted is that key decision makers are extremely reticent with regard to initiating the start of a project. We have a healthy backlog of verbal commitments sans executed contracts; the developers and owners (in my estimation) are attempting to determine short and long term market outlook.
One guiding principal employed is the American Institute of Architects Architecture Billings Index (ABI). The index serves as an economic indicator of nonresidential construction. The ABI is one factor of influence.
Daily economic reports which cover everything from jobless claims, to commodity price fluctuation, housing starts, manufacturing output, and the general bipolar nature of the Dow and Nasdaq activity rounds another sphere of persuasion.
The anticipation of the Chicago Olympics, in my opinion, induced a collective inhale of possibility and exhaled shared disillusionment. Partisan politics aside, the opportunity that would have been created for contractors had Chicago been awarded the Olympic bid is extraordinary.
I personally know several investors who literally would have digested blocks real estate, everything from vacant lots, to multi-residential parcels, to distressed industrial buildings; the geographic realm not only included Chicago, but Indiana, Wisconsin, and Detroit, Michigan as well. The infusion of capital, which has been sitting on the sidelines, will remain vaulted.
The complexity is truly exhaustive. The author James Joyce wrote, “A man of genius makes no mistakes; his errors are volitional and are the portals of discovery”. Those who operate under such a premise in today’s climate stand to ascertain little.
Based on comparative metrics in relation to last year at this time, the degree of opportunity is up 18%. While the quantity remains elevated, the magnitude of projects taking place is on a smaller scale. Rather than full building demolition, many projects seem to center on interior renovations and build-outs. One could surmise that this is a reflection of cyclical construction patterns easing workloads as we turn into fall in anticipation of winter. However, the majority of retail, office, hospital, university, and multi-residential projects over the past four months have centered on minor to mid-size interior demolition projects.
Some Broad Conclusions.
Lenders are still reluctant to finance speculative or large projects. Convalescing older structures with minor aesthetic improvements in the $50,000 to $200,000 range of project cost seem to be experiencing little resistance to financing.
Another observation we have noted is that key decision makers are extremely reticent with regard to initiating the start of a project. We have a healthy backlog of verbal commitments sans executed contracts; the developers and owners (in my estimation) are attempting to determine short and long term market outlook.
One guiding principal employed is the American Institute of Architects Architecture Billings Index (ABI). The index serves as an economic indicator of nonresidential construction. The ABI is one factor of influence.
Daily economic reports which cover everything from jobless claims, to commodity price fluctuation, housing starts, manufacturing output, and the general bipolar nature of the Dow and Nasdaq activity rounds another sphere of persuasion.
The anticipation of the Chicago Olympics, in my opinion, induced a collective inhale of possibility and exhaled shared disillusionment. Partisan politics aside, the opportunity that would have been created for contractors had Chicago been awarded the Olympic bid is extraordinary.
I personally know several investors who literally would have digested blocks real estate, everything from vacant lots, to multi-residential parcels, to distressed industrial buildings; the geographic realm not only included Chicago, but Indiana, Wisconsin, and Detroit, Michigan as well. The infusion of capital, which has been sitting on the sidelines, will remain vaulted.
The complexity is truly exhaustive. The author James Joyce wrote, “A man of genius makes no mistakes; his errors are volitional and are the portals of discovery”. Those who operate under such a premise in today’s climate stand to ascertain little.
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