Sunday, May 22, 2011

It's all about the financing

The latest report on from the AIA Architectural Billings Index was certainly depressing, however just like not getting too high after one good month, we shouldn’t get too low after one bad one. However the truly worrisome angle of this entire process is it looks to be the same fundamental reason for the news- the availability of money. Here’s this month’s commentary from AIA:

"The majority of firms are reporting at least one stalled project in-house because of the continued difficulty in obtaining financing," said AIA Chief Economist Kermit Baker. "That issue continues to be the main roadblock to recovery, and is unlikely to be resolved in the immediate future."

Now here’s from April 2011, November 2010 and June 2010 and see if you can sense a trend…

"The catalyst for a more robust recovery is likely financing, with stronger growth occurring only when lending institutions begin approving credit for construction projects with much greater regularity.” (April 2011)

“Right now, reluctance from lending institutions to provide credit for construction projects…” (November 2010)

“The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in this economic environment.” (June 2010)

So it really simplifies it, when the banks loosen the grip on the lending things will improve, but until then I think you will see the scores continuing to be relatively the same as they’ve been.


-- And not helping in the current time frame is once again, the weather. The unusually wet spring has absolutely wreaked havoc on the construction world. What makes it all the crazier is while we have massive issues with rain and flooding, we still have droughts in some places as well. It really does boggle the mind.

-- A few months ago I ran a story via the New York Times on a guy that made his living off of negative selling. It was almost to the point of where he would bully his customers and harass them to no end. Well he finally got what was coming to him… here’s the follow up from the NYT.

-- Major congratulations to Deron Patterson of PPG on his new post as President of the Texas Glass Association. Deron is a great guy and will do fantastic work for that quality organization. And speaking of guys like Deron, it is nice to see that there’s some serious talent at the float level that doesn’t get a lot of notice. Guys like Dan Plotnick of Pilkington, Brian Best of Guardian, and Jon Hughes of AGC are top notch folks that the industry can point to and be proud of.

-- It’s been a week since US Aluminum closed and my only comments are I am saddened at how some class people publicly decided to dance on their grave and how amazingly EVERYONE picked up so much business from this closing. If you didn’t know any better you’d think US was the leader in market share based on some of the hyperbole out there.

-- The world of Twitter in our industry continues to evolve and I’ve noted some of the better industry Twitter sites here in the past. Well now you can add to the list. The folks there have joined the revolution and done a nice job of keeping the conversation going. Kudos to Earnest Thompson and his team.

-- And last I must give compliments to the folks at e-glass weekly for the new format and layout. Very smooth and easy to read and the best part is when you get it on your phone there’s an option for mobile formatting, which is excellent. Between this and the recent incredible journalistic scoops, it is surely heady times for those folks as they continue to be the industry leader.


-- This special company rewarded its best employees with prostitutes… Crazy.

-- A major league baseball player uses Twitter and for good… making a little leaguer’s night!

Thrill seeking photography. Scary as all get out but great pictures!!


This week submitted by an old friend in Michigan and it’s a must watch to get a flavor and feel for how incredible our debt issue is here in the U.S. It is some mind numbing stuff. Warning, don’t watch on a full stomach because the info in here will make you want to toss.

1 comment:

J. Carlos said...

Max, Thanks for bringing this up. Liquidity is THE issue. Besides the lack of funding for private projects, many, dare I say most, of my cutomers have lost their credit lines. Most have a sterling credit history and long-term relationships with their bank.