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The North American Construction Market has turned soft.

This is showing up on a spot basis, in the weakest markets, and those most over-hyped.

It is MOST unwise for ANY EC to get caught extending credit ( ie to GCs ) at this point in the construction cycle.

We've seen a boom that dates back years and years... so it's long in the tooth.

The LAST market that turns over is that of the NECA//IBEW contractor. They are ALWAYS a trailing indicator. Their GC's budgets flow from Big Government and Big Business.

The NUMBER ONE driver of EC bankruptcy is credit extension to parties that default. Yes, one fine day, the cash just stops flowing. Poof. Right up until then, the GC is lying his azz off. After that date, he can't even be found.

( He's in Cuba, of course.) :devil3:
 

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Arsholeprentice
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I agree, 2019 will be a bit of slow down and contraction. I think projects will still be moving along, the but new ones will not flow so freely.
 

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Will it contract or just stop growing?


Continuing full bore is not so bad.
 

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Arsholeprentice
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Will it contract or just stop growing?


Continuing full bore is not so bad.
I think government jobs on the table will move forward regardless. I can see (Bay Area perspective) a lot of the tech hype jobs starting to slow. I see that in turn slowing down the Resi. market in the area as it affects the techies income and stocks.

Right now the tech is taking a beating, but the calls just keep coming in. It will take a while before the ignorant realize some of what they own is just fluff. When that finally happens the market will begin to slow.
 

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I make all the electrons line up for their Flu shots
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My newest client is the largest inter island shipper. They send outside for all their electrical needs, no in house electricians in their employ. I ain't counting my chickens before they hatch, but on the other hand, suddenly I'm not loosing sleep over future work when and where, cause I know stuff breaks lots around the shipyards. First job is some new office remodeling, and repairs and relocate to an alarm system class one schedule one setup for a diesel fuel oil tank area that got whacked by a large forklift.
 

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Never extend credit. Period.
As Micheal Stone says, "You're in business to provide a service and make a profit doing it...not to finance someones construction project...".
If they want financing, thats what banks are for.
When I did NC and even now when I do bigger jobs, my payment schedule is structured to ALWAYS keep me in the black.
Set up the payment schedule in your contract so that draws are triggered by the START of work phases, and NEVER leave more than 5-10% for a final draw.
Also, get the GC to sign a personal guarantee just to be sure.
If he wont agree to your terms...run away.
 

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Hackenschmidt
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I think the tech boom will cool. I think health care will continue to boom. Higher education I don't know. None of these affect me much. I think oil and gas will continue to be unpredictable.

I think the massive booms in the 1% corporations will cool but I am optimistic that the small, medium, and large but not giant corporations will do well.

One of my customers (CEO of one of those medium companies) saw it this way: after the election in 2016, the markets went nuts in 2017, but that is the worst indicator. Capital investments held back, then boomed in 2018. The people that influence the markets don't care, they have no incentive to hold back, but people investing their company's money took a wait and see.

This year, same guy is expanding his facility. They built a new facility after being in their original plant 1995-2015, and they didn't plan to expand this soon. They have experienced great growth in 2017 and 2018, but they could have handled that in this new facility. (They were not a struggling company, they were a strong company making a good product forecasting continued growth before the current president was even a candidate.)

What changed? They can buy US steel now, so they can be competitive machining parts in their plant, rather than importing subassemblies from steel producing nations. The hardest part? Finding competent machinists without pulling them out of retirement. Probably will expand their work force by 25%, and skilled jobs not warehouse stocker-picker-packers.

I am hoping this is indicative of a trend: that the tariffs' initial effect will be on US steel and aluminum etc., but shortly lagging the effect will trickle down to manufacturing. If this happens we could see some of the gravy concentrated in the wealthiest urban pockets (NYC, Bay area, DC, etc.) spread around to the rest of the country, which IMO is a healthy trend for the country.
 

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We are starting out this year with a super record first quarter with 100% government work. Half of it repeat no bid business, the other half solely due to our bond capacity.
 

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The housing market has definitely slowed a tiny bit here but sales are still brisk. More inventory is available and staying on the market longer now. New homes are selling immediately because demand is still outstripping supply due to a lack of construction over the past 5 years. That being said, this whole house of cards is going to fall at some point.
 

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Old Grumpy Bastard
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Same here.... all the union EC’s are still slammed. Owners who I run into still lamenting about the shortage of experienced journeymen... so many have retired. The resi guys have slowed down some but still very busy.
I've only done resi as side jobs, never a fulltime thing but I don't gauge the economy by that type work.
 

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How many cranes are you seeing?

In the mid 90’s a Leviton factory guy who constantly flew all over the country told me that he measured how strong business was in a city by how many cranes there was in the sky-line. He said that every time there were a bunch of cranes his distributors were happy.
 

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Too much OT here in DFW because the wages are so terribly low. By the time they catch up the economy will cool and it'll be impossible to negotiate a raise.

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