MECHANICAL CONTRACTING PVF


the lagging construction sector — energy conservation. While previously considered a marginal aspect of the


A 20


once-booming residential and commercial industry, the intrepid manufacturers, distributors, contractors and engineers comprising the ailing construction business have enthusiastically embraced energy conservation and the substantial business expansion it represents. There are two major reasons that this commitment is


bound to prove successful: 1. The technology of energy conservation has grown by leaps and bounds in the recent past, including the upgrading and modernization of air conditioning, refrigeration, heating and overall building construction. This will not only save hundreds of millions of dollars for industry and


consumers alike but will lessen the dependence on such critical energy resources as oil and natural gas. 2) The federal government, and the


few states that can afford it, are offering attractive tax offsets to entice cooperative involved producers and users. These have been bolstered recently by Congressional legislation


and include attractive enough tax reductions to entice the fence sitters. The mood of the convention’s massive attendance was


decidedly upbeat, as most participants anticipate a comeback in such sub-sectors as rental apartments, assisted living, office and light industrial building. No such hope is seen, however, for a return of residential or condominium construction. Inventory in that arena continues at a depressing high, while prices are drifting lower. Because of these factors, we expect the commercial sector


to gather steam as the year progresses, culminating in a better than now expected year of 2011.


Rental shift adds to housing depression As increasing sectors of America’s economy join the


comeback trail, residential construction is increasingly left in the dust. January figures show further slippage from the already beaten down levels, with foreclosures in California alone reaching 40% of sales. Unsold inventories remain at close to all-time high levels, despite new construction nearing a multi-decade low ebb. What has gotten minimal publicity in the darkening


housing picture is a monumental shift to rentals, both in individual homes, as well as in multi-story apartment buildings. Even yesteryear’s big city condominium craze is changing


from individual ownership to increasing commitments to rental. This situation is even starting to precipitate an apartment shortage, with builders viewing the potential not only for conversion but also for the building of new rental high rises in major cities. This abandonment of home ownership, which became the battle-cry of egalitarians fifty years ago, has reached flood-


Construction industry convention focuses on energy conservation


BY MORRIE BESCHLOSS CONTRIBUTING WRITER


record 50,000 attendance at a February convention of the air conditioning, heating and refrigeration industry found a focus to overcome the doldrums of


like proportions. It threatens to become a fixture of the American scene, even as the rest of the U.S. economy approaches normalcy. It’s consistent with the greater prudence of the average wage earner, who is more interested than ever in paying down debt and putting his or her savings on a positive course to retirement. While individual home owners will continue to comprise


the backbone of America’s surging population, increased down payments (up to 30% or more) will become the norm as oversized mortgage loans are destined to lose popularity. This may be further mitigated by tax changes now underfoot to curb the size of mortgage loan deductions. What is likely for the immediate future is the termination of home ownership, which became the centerpiece of the


“progressive” movement for the second half of the last century.


America’s entrepreneurial renaissance trumps unemployment scourge While lingering unemployment continues to corrode the


vitals of a slowly recovering economy, the age-old spirit of America’s entrepreneurial ingenuity is beginning to appear as a welcome counter-force. With large corporations increasingly allied with Big


Government to solve their problems and continuing production shifts overseas, growing numbers of unemployed workers are turning to indigenous skills and aspirations to go into business for themselves. This individualistic entrepreneurialism is uniquely American. Although born out of a spirit of necessity, this embryonic groundswell could become the harbinger of home-based Mom and Pop new business opportunities. These could eventually evolve into thousands of successful companies, increasingly spawned by a rapidly evolving post-industrial revolution in the 21st century. A major byproduct of this new wave will not only provide


independent job creations, but a revitalization of "Made in America," which is making a tangible comeback after years of farming out production to the rest of the world. With a minimum of eight million jobs wiped out by a


combination of the great recession and a rapidly-developed technological revolution, new businesses must be created to put people back to work. This is especially true in such devastated areas as residential real estate, marketing-related and media jobs and the automotive production arena, all of which have been devastated by layoffs numbering in the hundreds of thousands. With the White House curbing large and small business


flexibility through policies devised by the legislative or executive order process, entrepreneurial start-ups could present the best opportunity for thousands with the talent, ambition and opportunity to go into business for themselves. Although not everyone has the impetus to become Apple,


Google, Facebook or Amazon, a growing number of idea- oriented or despair-driven unemployed are giving up on entrenched businesses and coming up with their own concepts. The near-term future will tell whether this sense of individual revitalization will take hold firmly enough to make a difference.


e Turn to BESCHLOSS on p 22


phc april 2011 www.phcnews.com


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