Masonry Magazine March 2011 Page. 42
INDUSTRY REPORT
Creating the Future
Both residential and commercial construction activity have reached record or near-record lows. According to the U.S. Census Bureau, we have just lived through the lowest level of new housing starts since they began tracking this data in 1959. The trends are starting to change, but most experts agree there's a long way to go before we attain real economic improvements in the construction industry. I am confident there will be an upturn, eventually. However, the future upturn will not be enough for the masonry industry to rebound robustly if brick is not the building envelope material of choice when that time does come.
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By Sarah B. Atkins
I recently returned from World of Concrete/World of Masonry in Las Vegas. My company attended this event to gain exposure, to learn and educate, and to network and socialize. I returned both impressed and inspired by some of the people with whom I spoke. There are people and companies within our masonry sector that are getting creative, becoming more proactive, and increasing their energy and industry involvement. We must all take heed of their examples. Each of us needs to do this independently, collectively and cooperatively. We have to focus our energy now and do everything we can to ensure the brightest possible future for the masonry industry.
Is construction at its lowest point?
The answer may come as no surprise to those of us in the construction business, but it is worth re-examining exactly where we are today. In 2009, new housing starts decreased by nearly 45 percent when compared to 2008. New home permits decreased by 70 percent between 2005 and 2009. Residential starts went from 1.5 million in 2003 to just 441,000 in 2009. The numbers for 2010 were close to those of 2009, with slight increases of 2.6 percent for permits and 6.1 percent for starts, which may indicate the tide has turned.
Not to be outdone, commercial construction also has been on the decline, but it is predicted to recover faster than residential construction during the next few years. New commercial starts had increased through 2007, and then were cut roughly in half by 2010. They are forecasted to return to the 2005 levels by 2014, but not before they hit their lowest levels in 50 years. A slight growth in commercial construction is expected in 2011, with offices, banks and retail stores showing the most improvement.
Unfortunately, the brick industry is forecasting a continued decline in both public and government buildings. In particular, masonry construction and the brick industry experienced a decline from 9.5 million shipments of brick in 2005 to just 3.5 million shipments of brick in 2009. The Brick Industry Association (BIA) points out that its impact is still an overall positive one on the U.S. economy. Even with the decline, masonry still contributes more than $5 billion a year to the U.S. economy, which translates into more than 120,000 jobs. Every brick produced in the United States equals $2 contributed by the industry to the economy. The number of bricks per building start is the highest it has ever been, indicating that commercial construction is taking place, and the buildings being constructed are larger.
This data may not be unexpected as it is well known that construction activity has been weak. With all of this negative information about the construction industry, can there be a positive future?
Lessons learned
How do we possibly find optimism despite this forecast full of doom and gloom? I found many examples during World of Concrete/World of Masonry. I was impressed by the dedication and direction of several of the masonry firms, brick companies and other industry professionals.
The owners of Milam Masonry & Contracting LLC of Benton, Mo, are clearly doing what it takes to survive and prepare for the future. They have recently grown from eight to 20 employees, despite the difficult climate. They credit not only hard work, but also flexibility. They have traveled to areas where work is available and picked up business that others left behind. Additionally, they are committed to