Stone Industry Perspective: Managing through economic cycles
As we approach the beginning of a new year, and a new decade, we are encouraging all of our Rockhead members to take a close look into their business and identify key areas of focus that will allow them to plan and scale their business based on present or potential economic cycles. These areas include direct and indirect labor expenses, cost of materials, overhead costs and secured account and contracts in the pipeline.
While no one has a crystal ball to see what will actually take place in six months or even in the next few years, having access to information is key when making decisions for a business.
The Rockhead Group has partnered with ITR Economics to develop a monthly customized report that allows our members to look into various industry snapshots such as overall retail sales, wholesale trade, auto production, manufacturing, capital goods, and most importantly, nonresidential and residential construction. With this information, our members are able to decipher key economic indicators that could bring opportunity and threats to their business.
A few of the indicators we see in the near future as reported by ITR Economics are:
- Overall retail sales grew at a rate of 3.3% over a 12-month period, not necessarily driven by price increases. The Consumer Price Index is unlikely to contract through 2021, resulting in a more price-conscious consumer.
- Nonresidential construction was up 2.8% from the year-ago level, primarily driven by public spaces in the hospitality and commercial industry. This market continues to be a good opportunity for the surfacing industry as new materials and applications enter the market.
- Residential construction shows a decline of 6.9% from last year, as U.S. housing starts are down 2.1%. This number does not factor any residential remodeling, which continues to be a great opportunity for our industry.
We encourage our members to lead their businesses with optimism and continue being a driving force for growth. From the perspective of our network and our members, we are seeing an increase in “calculated growth” particularly fueled by strategic planning, key relationships and industry data that allows them to develop their own projections.
The Rockhead Group will host its next meeting during The International Surface Expo in Las Vegas at the end of January, where the team from ITR Economics will join us to provide information and insights on what members should be looking at as they manage their individual business cycles and projections. Over the course of 2020, our group will also be hosting several sessions throughout the U.S. with the purpose of bringing awareness and knowledge to the overall industry on how to best manage their operations.
For more information on the Las Vegas event or the Rockhead Group, please visit www.rockheadsusa.com.