Work at the former Kenosha Inn is finally back up and running after our workers discovered non-abated asbestos. The “hot” material has been properly abated allowing demolition to advance.
The façade removal at the Renaissance Shell continues to move along successfully – this is another project hampered by unknown asbestos discovered during the project. It is essential that demolition firms ensure that their work force is properly trained in asbestos awareness so as not to danger workers, the immediate public, and environment. While these situations are frustrating to owners, the best practices of any reliable company should have an established proactive “safety always” mentality.
Champion Environmental Services, Inc. is preparing to mobilize for a City of Monona project; a commercial property and residential structure will be demolished. The two structures have been properly abated of all environmental hazards and we are awaiting utility disconnects and final demolition permits to be issued.
The seasonal nature of our work is apparent for this time of year. Bid opportunities are starting to gain momentum. An encouraging note is the uptick in private work. We are sitting on over 2 million square feet of private bid prospects with optimistic words from the owners only to recognize the tiring mantra repeated over the last three years – “ check back in another 30 days. . .management is trying to determine the best course of action. . .any day now we should have the go ahead….” Ad nauseum.
Certainly, the key decision makers are tasking away at a strategy to maximize the allocation of every penny. Even when a project warrants the ability to be performed pro bono, clients’ synaptic nerves begin toying with the notion that they are sitting on a literal gold mine. The revelry reaches a hypnotic pulse when you actually have the ability to buy the job.
Lost in translation is the owners’ ability to recognize the special circumstances surrounding such rare opportunities in the current market. The fluctuation of key commodity pricing is a compelling area few understand – how well can one forecast where diesel prices will go? Steel, copper, and other precious metal pricing is often contingent on what we can promise to our buyer within an allotted time to maximize return. What we get for structured steel is not necessarily what another contractor would garner due to our long standing relationships. Timing is everything – an offer to perform demolition for free, given a variety of factors, can easily turn into a million dollar bill when a prospective client becomes gluttonous in the merriment of fictitious fortunes.
My good friend Mark Anthony over at Demolition News continues to record and report the nauseous bid spreads that continue to defile our industry in the US. Over the years, I have warned municipalities and private entities about “promises” that certain demolition contractors will make in order to win a job – for clarification, these were in general terms regarding specific projects, I never “called out” a company by name. With satisfaction, I relay news on a project we were in line to bid in Wilkes-Barre, PA on behalf of a developer. Following months of providing extensive due diligence information on our company and the assurance that our bid would be welcomed along with a short list of three other approved companies, I was told that a local firm negotiated to do the job for free.
I warned my contact about the “rip and run” mentality in these situations; rip and run is where a company guts a building of all the scrap metal and then leaves the site in ruin. Mark Anthony reported on this specific item last month titled, “Developer fined after contractor vanishes… Contractor leaves developer in lurch after stripping site of steel and copper”. A link to Mark’s entry with the story can be found here: http://www.demolitionnews.com/page/7/
I was unaware that there were many closeted fans of Immanuel Kant who take his theory of perception on a literal a priori proposition.
Showing posts with label economic forecasting. Show all posts
Showing posts with label economic forecasting. Show all posts
Thursday, March 10, 2011
Thursday, May 20, 2010
State of the State Part II
Back on March 1, 2010, I solicited several assumptions regarding how local and global economic forces were influencing our bottom line. An AP report out of New York released just moments ago suggests that my key assertions were correct.
On March 1 I stated, “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”.
The AP today: “The euro is falling again and continues to hover near a four-year low. It has become a key indicator for confidence in Europe's economy. The euro fell to $1.2318, a day after hitting $1.2146 . . . Crude oil fell $2.73 to $67.14 per barrel on the New York Mercantile Exchange.”
Gold remains at $1,191.80 an ounce despite loosing approximately 1% over two days.
I further stated on March 1 that “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.” My added emphasis is vital given such an accurate prognosis; as the AP notes today: “. . .the [Labor] department said new claims for unemployment benefits rose by 25,000 to 471,000, their largest amount in three months. . . Greek workers again took to the streets protesting recently approved budget cuts that were necessary for the country to receive a bailout. Greece was able to repay debt that came due Wednesday only because it had access to a rescue package from the European Union and International Monetary Fund. . . in afternoon trading, Britain's FTSE 100 fell 2.6, Germany's DAX index dropped 2.8 percent, and France's CAC-40 plummeted 3.9 percent.”
Certainly I take no pride in being correct on these assumptions as global – economically driven factors reach directly into the fissure of our cavernous lint- filled pockets. So where do we sit in the state of the state?
I encourage you to visit Mark Anthony over at “Demolition News” and read his posting, Comment – Is demolition perpetuating the recession…? Here is the link:
www.demolitionnews.com/2010/05/20/comment-is-demolition-perpetuating-the-recession
My apologies as I cannot get the link to set so you must copy/paste.
On March 1 I stated, “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”.
The AP today: “The euro is falling again and continues to hover near a four-year low. It has become a key indicator for confidence in Europe's economy. The euro fell to $1.2318, a day after hitting $1.2146 . . . Crude oil fell $2.73 to $67.14 per barrel on the New York Mercantile Exchange.”
Gold remains at $1,191.80 an ounce despite loosing approximately 1% over two days.
I further stated on March 1 that “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.” My added emphasis is vital given such an accurate prognosis; as the AP notes today: “. . .the [Labor] department said new claims for unemployment benefits rose by 25,000 to 471,000, their largest amount in three months. . . Greek workers again took to the streets protesting recently approved budget cuts that were necessary for the country to receive a bailout. Greece was able to repay debt that came due Wednesday only because it had access to a rescue package from the European Union and International Monetary Fund. . . in afternoon trading, Britain's FTSE 100 fell 2.6, Germany's DAX index dropped 2.8 percent, and France's CAC-40 plummeted 3.9 percent.”
Certainly I take no pride in being correct on these assumptions as global – economically driven factors reach directly into the fissure of our cavernous lint- filled pockets. So where do we sit in the state of the state?
I encourage you to visit Mark Anthony over at “Demolition News” and read his posting, Comment – Is demolition perpetuating the recession…? Here is the link:
www.demolitionnews.com/2010/05/20/comment-is-demolition-perpetuating-the-recession
My apologies as I cannot get the link to set so you must copy/paste.
Monday, March 1, 2010
The State of the State
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.
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.
Thursday, December 3, 2009
Forecasting 2010
At this point, I would regard 2009 as tepid at best. Industrial/retail vacancies are at an all time high, new home start-ups barely at a pulse, the hotel industry remains cautious, and available credit, what little there is, drips into the market.
On average, I speak with 40-50 real estate professionals daily - everyone from lenders to developers, commercial agents, and general contractors; the once hopeful anticipation of a decent 2009 has given way to macro indignation. There appears to be symptomatic depression in every conversation with anyone who carries a vested interest in the real estate market.
I have been attempting to forecast 2010 for several months. Indicators initially displayed some recovery in the second quarter; however, over the past two weeks, I am beginning to sense that 2010 may be worse than 2009.
The CMI reported by the National Association of Credit Management report released November 2 for October 2009 suggests that a 50.1 index breeches the natural stance of 50 thereby indicating a positive move toward growth.
It is my contention real estate is a critical pathway to overall economic recovery and without the credit market loosening cash/liquidity, we are looking toward a disastrous 2010.
Key factors to watch in forecasting 2010:
1. Manufacturing output
2. Oil, strength of dollar, gold
3. The REAL numbers behind jobless claims/unemployment
4. Holiday retail season [albeit, a rather short indicator]
5. Geopolitical issues
There is an incredible amount of existing cash on the sidelines which will require the appropriate credit to get projects off the ground. I can say this with a great deal of certainty as we have been engaged in “budgeting” dozens of projects. We have walked several parcels averaging 800,000 square feet where owners/developers are attempting to get a read on overall project costs. The vision reflected in these meetings shows investors in the ebb and flow of the next wave.
My conclusion: The pool of potential growth will quickly evaporate without a tsunami of credit. Let it rain.
On average, I speak with 40-50 real estate professionals daily - everyone from lenders to developers, commercial agents, and general contractors; the once hopeful anticipation of a decent 2009 has given way to macro indignation. There appears to be symptomatic depression in every conversation with anyone who carries a vested interest in the real estate market.
I have been attempting to forecast 2010 for several months. Indicators initially displayed some recovery in the second quarter; however, over the past two weeks, I am beginning to sense that 2010 may be worse than 2009.
The CMI reported by the National Association of Credit Management report released November 2 for October 2009 suggests that a 50.1 index breeches the natural stance of 50 thereby indicating a positive move toward growth.
It is my contention real estate is a critical pathway to overall economic recovery and without the credit market loosening cash/liquidity, we are looking toward a disastrous 2010.
Key factors to watch in forecasting 2010:
1. Manufacturing output
2. Oil, strength of dollar, gold
3. The REAL numbers behind jobless claims/unemployment
4. Holiday retail season [albeit, a rather short indicator]
5. Geopolitical issues
There is an incredible amount of existing cash on the sidelines which will require the appropriate credit to get projects off the ground. I can say this with a great deal of certainty as we have been engaged in “budgeting” dozens of projects. We have walked several parcels averaging 800,000 square feet where owners/developers are attempting to get a read on overall project costs. The vision reflected in these meetings shows investors in the ebb and flow of the next wave.
My conclusion: The pool of potential growth will quickly evaporate without a tsunami of credit. Let it rain.
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