Never let a good crisis go to waste

Tocci Stock

The credit crunch is stifling markets, shrinking our workforce, and preventing scores of projects from being built. The irony of our crisis is that opportunity abounds if you know where to look. Market statistics reveal a window of opportunity to radically reduce construction costs for any project that starts by Q3 2009. With swift action we can build your project for up to 15% less and 8% faster than 2008 if we build now.

Tocci is ready to work with you to get your projects “shovel-ready” and in the ground by September 2009. Why then? Do you really think this downturn will be over by then? Nope, but by then we, and more importantly, major construction economists believe the surge of construction orders resulting from unprecedented public sector stimulus spending will result in a dramatic correction – and then a surge in construction commodity pricing. The window is quite likely to literally slam shut. Until then opportunity knocks…

Declining material prices (2009 average with best pricing advantages in Q1 and Q2)

Cement -2.3% and dropping
Fabricated Pipe -3.6%
Gypsum Products -2.2% and dropping
Plywood -7.3% and dropping
Rebar -28.0%
Softwood Lumber -6.8% and likely to drop further
Structural Metal -0.5% and dropping
Structural Sheet -2.3% and dropping
Structural Steel -20.0% and likely to drop further

Increased labor availability
Construction jobless rate is approaching 16%. 111,000 construction jobs were lost in January 2009 and over 1M have been lost since the start of the recession. So what’s so good about this? Because in times like these merit based builders and subcontractors pare staff but hold onto their smartest and most productive workers. Studies show overall crew productivity increases 12-18% during significant downturns

Increased advantage of open shop labor
Despite the layoffs and downturn union labor wages will rise 3% on average, according the Department of Labor and the Bureau of Labor Statistics. Inflexible work rules remain in place and neutralize most economy-driven incentive to relax apprentice ratios and increase productivity. In the open shop sector wages are holding but folks are simply appreciating their current jobs more and swinging hammers harder. In addition employers reduce markups to keep their best people on board. The 20% – 35% project savings that have been previously realized through open sourcing construction trades is increasing in this economic climate.

Pent up demand
It’s important to remember the construction downturn is a result of the credit crunch not overbuilding. When the U.S. emerges from this recession basic demand for buildings will also recover. Those clients who start now will enjoy the ripening fruit. Those who can’t or don’t will, wistfully reminisce; “if only I bought my job back in 09…”

chart_econOpportunity



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