Around this time in 2008 I was thinking 2009 was going to be a real bust; a rebuilding year at best and a real bear at worst. Well, we saw some of that and for some it was way better and for others it was way tougher. Now, looking ahead at 2010, I have a sense that the overall market is in for a tough winter with hope for real recovery in the construction industry beginning later in the year.
It does little good to try and guess too far in advance as roiled as the world economy is right now (has been for several years now). It looks like head down basic blocking and tackling remains the best course. I am convinced that roofing contractors who will end 2009 in the black have done so by remaining focused on the basics and keeping a hawk’s eye on every expense. Yes, there are some who benefited by storm activity, and I must credit part of my own good year to that. But even in the storm markets, margins were slim and “gimme” bids were few and far between.
For now I can sum up my own view by looking ahead at 2010 for what I might expect to celebrate and what we will work hardest on and what is keeping me up at night.
In spite of the fact that the industry is not having what most would describe as a good year in 2009, it has not been a total disaster for the roofing industry. When looking ahead at 2009 (again at this time last year) I had the sense that surviving 2009 would be cause for celebration. For 2010 I think those who survive the first half, perhaps the first three quarters will be in a position to celebrate a return to a more steady stream of work and a generally better outlook. Nothing magic here … just my gut.
The thing that will be the most difficult in the industry during 2010 will be change. I know, it is pretty much standard fare in the roofing business, but we have a lot of balls up in the air right now. The rush toward green and sustainable building systems continues to challenge roofing designers and contractors. Yes, you need to be on the bandwagon, but with which system(s)? The folks in command of engineering and testing these systems are growing more vocal that we need to see more evidence of how these systems will perform over long periods of time and in extreme weather events.
With more roofing contractors chasing less work, competition is going to be tougher than ever. The “cross-over” effect that we see will make it even tougher for some. I know commercial roofing contractors who would scarcely bid less than 1,000 squares who started lining up 100-square retrofit work during 2009 and are starting to get into it. Their impact on these other markets will make it exceedingly difficult for some of the contractors who make their living there.
Government regulations and new initiatives that will tighten up immigration laws and potentially make union organizing easier may cause small business some big headaches in 2010. Still difficult to tell what pending health care legislation will mean for roofing contractors. Either way you will have to spend valuable time dealing with the changes.
Also, there is nothing wrong with operating a safe worksite, but you may have more government assistance than you have had in many years. This will come at a cost and in a time when you have very few dollars or hours to toss at it. Being a safe operator in the first place is the best medicine. No incidents or injuries equals very little cause for outside interference (and a smaller payday for your insurance provider … nothing wrong with that).
Sleepless in Atlanta
I am confident of many things. The economy will return and how long that will take is both out of my control and unknown to me. So I will not worry about that. We are in the roofing business. We build shelter, one of the basic human needs, so there will be demand. Our industry is also largely driven by retrofit work, so the sluggish construction economy does not completely shut us down. Doesn’t feel so good, but is not going to kill us.
I am not confident in the prices of commodities. I am not confident in the value of the U.S. dollar. I am very confident in our nation’s ability to heal (and that includes the dollar), but we are in some very treacherous waters. I would think we are generally set to head into an inflationary time, but that won’t happen until sales return in earnest. As for the prices of commodities in our industry, I worry the most about the price of oil in 2010 and how it may impact the price of asphalt roofing.
Love it or compete with it, asphalt roofing forms the backbone of the roofing industry most of us work in.
Certainly does for me. Rising oil prices coupled with a depressed demand for asphalt roofing could cause roofing manufacturers some real problems. Their problems tend to telegraph through the industry.
OK, enough whining. I do hope the price of oil and asphalt roofing and steel and copper are sufficiently stable as to give us at least a little peace in a challenging market. I hop that there will be enough demand to keep us all busy such that we can return to really growing our businesses, not just “surviving”. But I will keep one eye on commodities as a potential game changer in 2010.
BUT THAT’S JUST ME. Tell me what you think! Respond here or shoot me an e-mail sometime.