MECHANICAL CONTRACTING PVF
Home improvement/remodeling provides a well-timed residential construction boost
BY MORRIE BESCHLOSS CONTRIBUTING WRITER A 58
timely shot in the arm for the severely ailing home construction industry has manifested itself in a boomlet for residential remodeling, upgrading and
energy containment. Spending on remodeling alone is scheduled to rise close
to 10% in the first quarter, to $125 billion, from less than $114 billion a year earlier, according to Harvard University’s Joint Center for Housing Studies. A potential 13% increase forecast from April through June would generate the largest quarterly increase in five years. Home improvement centers, such as Lowe’s, Home Depot and Sears, are already building
their inventories as a majority of homeowners are staying put and maintaining their current value, rather than selling into a depressed housing market. Also stimulating long-term home
values are an abundance of energy- saving devices, such as solar panels, fuel cells and the latest methods of insulation and improved roofing materials. It’s estimated by the Harvard experts that such a combination of home improvement and a varied offering of federal government tax credits will accelerate expenditures on
the overall single unit American residential sector. This would prove a welcome offset, while the depression in new home construction and dreary sales levels persist. With the shift to rentals by a large
segment of the American population further inhibiting already anemic home sales, other than foreclosure bargain hunting, there is little hope for residential construction in the immediate future.
Consequently, increasing indigenous home values for the eventual return to a more balanced supply/demand/price environment would be reflective of prudence on the part of the American homeowner. Abetting this trend is not only the federal government’s
accommodative tax policy, but the technology of solar panels, insulation improvement and other cost-saving devices. The extent of the forthcoming home improvement boom will provide a good measure as to how enthusiastically the American public takes to the anticipated residential upgrading this year.
US factories ready to step into Japanese production gap Although it’s considered bad form to dwell on the ills
that have befallen others, even if they are competitors on the world stage, business and industry, like nature, abhors a vacuum. The catastrophe that has befallen the Japanese nation at large is putting an increasingly expanding crimp into that
nation’s production capacity — both for its world-leading exports, as well as for the domestic needs of its 126 million people. This not only affects consumer and producer products churned out by Japanese factories and farms but also the thousands of components that are critical to the world’s leading automotive companies, such as Toyota and Nissan. While Germany’s Mercedes Benz and BMW automobile
producers are running TV commercials overtime to fill the luxury car demands of American buyers, the large production segment of Japan’s southern and Midwestern U.S. factories are already experiencing the halting inflow of component and spare parts needed to maintain the steady stream of finished units provided by these facilities. Since we are now in the early stages of the consequences
wrought by the crippling of Japan’s economy, it would be foolhardy to put a statistical percentage on Japan’s economic shrinkage this year. Equally unknown is the U.S. gain beyond what was expected before this cataclysmic event occurred in mid-March. Thrown into this mix would also have to be the major dislocations that are wreaking havoc throughout the Middle East and North Africa. It’s safe to say that both America’s industrial and
technological, as well as its immense agricultural potential, will see the U.S. gross domestic product of goods and services increases come close to the 4% mark, which I had forecasted in my projections as the year 2011 launched its trek into the unknown. The American business community, large and small,
stands as ready to rebound from a two and a half year recessionary malaise, as it did at the end of the Great Depression to become the Allied “arsenal for democracy” during the Second World War. The global economy as a whole is getting off its haunches
this year, especially in the red-hot nations of Southeast Asia, Brazil and even Russia. Despite some political interference from the federal government, the spirit of America’s entrepreneurial business establishment is alive and well, ready to keep the global recovery momentum on track.
North Dakota— exemplar of a realistic U.S. future It would seem curious to most that one of America’s
most barren and under populated states (672,000) would become the exemplar of what’s most impressive in today’s United States. In a superbly-crafted Wall Street Journal article by writer
Joel Kotkin, the statistics speak for themselves loud and clear. Key to the unlikely surge of affluence being enjoyed by the state’s fulfilled inhabitants is the largest land-based oil potential, recently developed — the increasingly publicized Bakken Belt. It is centered on a small-sized community, Williston, which has seen more mobile vans than homes lately to accommodate the necessary employment pool. This belt of shale oil, increasingly
e Turn to BESCHLOSS on p 60
phc may 2011
www.phcnews.com
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