Flexing Our Invisible Strength

Brian Miller is President of ProVia

By Brian Miller

Being a building products manufacturer during the last four years has been a little like walking in mud. Moving forward has required a lot more effort than in the years before the downturn. Similarly, it has required arduous work to support a healthy business. I’m sure many of you can attest to that. However, there are signs of change that point to better days ahead - if we operate with positive intention and resolve.

Three Reasons for Optimism

Despite the environment we’ve been in for a while, I’m optimistic about the long-term strength of the U.S. economy. As I study the indicators and look for the levers that can shift our nation’s economic future, I find three macro signs that a new era of expansion is coming. There are obviously dozens of other forces working for and against a strong economy. However, I’ve elected to focus on these three:

  • First, the housing market. The major corrections are behind us. With the exception of a tightened credit market (and I don’t consider this to be an overall bad thing), most of the other obstacles to a robust housing market are being torn down. In addition, the country’s mid- to long-term demographics support growth in both new home construction as well as remodeling. I believe that there will be differences in what homeowners want moving forward (e.g., slightly smaller homes, multi-generation living arrangements, etc.). However, I don’t think most homeowners will want to compromise quality for price. A home is still an investment, and it’s used every day. Feature-rich products with lasting quality will continue to grow in demand.
  • The second phenomena that will help buoy the U.S. economy is the recent domestic oil and gas discoveries. This is a game-changer. We’re seeing the beginning effects of what this industry will do over the next couple of decades. Not only will the direct markets related to oil and gas benefit (processing plants, equipment manufacturers, transport companies, etc.), but the trickle-down effect will be substantial (infrastructure improvements, service industries, etc.). In November the International Energy Agency released its World Energy Outlook. The report said by around 2020, the United States is projected to become the largest global oil producer overtaking Saudi Arabia. The result is a continued fall in U.S. oil imports (currently at 20% of our needs) to the extent that North America becomes a net oil exporter around 2030.
  • The third reason for optimism is the resurgence of domestic manufacturing by large, U.S. based companies. Numerous companies are beginning to see the “invisibles” of offshore manufacturing. Not only is the rising middle class of traditional partner countries beginning to demand more pay for labor, but events such as the tsunami that struck Japan are stymieing the supply chain. As companies factor in the costs of working through these situations, or worse yet, dealing with product outages, they are beginning to see new advantages for domestic production. Multinational conglomerate, General Electric, has announced that it plans to invest $1 billion by the end of 2014 to upgrade its U.S. manufacturing capabilities. Tech giant Apple has also announced that it will be spending $100 million in 2013 to increase domestic manufacturing. Although this pales to GE’s announcement in regards to dollars invested, it may be more telling. For years under the direction of Steve Jobs, Apple subscribed to offshore manufacturing. The fact that now, CEO Tim Cook is willing to challenge that logic is another indication that Made in America is once again becoming vogue.

Invisible Strength Will Prevail

There is currently plenty of bad press focused on the negative signs in the economy, and the divisions in the country for that matter. And, we are guaranteed to have bumps in the road. We may even go over the proverbial cliff. However, the long-term outlook is solid and it’s supported by macro trends including the three mentioned above. I believe that there is an invisible strength in the will of a free economy that always has a desire to win. Sometimes it’s beaten down. But that invisible strength is stronger than politics, and, it will thrive again.

Unleashing Strength Through Attitude

I’ve encouraged our team at ProVia to not get bogged down by negative press and attitudes towards the economy. Instead, let’s concentrate on the positive signs. Let’s be the ones to bring optimism to the conversation. Our attitude is a big part of our success.

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Comments 4

Guest - Drew Tavss on Tuesday, 18 December 2012 17:48

Brian, you are right on! We have lived through the grand-daddy of a recession that was centered around home building. It's over, and that, my friend, will be a welcome change that we have experience to believe it (trust it is real this time).

Attitude!

Brian, you are right on! We have lived through the grand-daddy of a recession that was centered around home building. It's over, and that, my friend, will be a welcome change that we have experience to believe it (trust it is real this time). Attitude!
Guest - Naomi on Tuesday, 18 December 2012 18:43

Refreshing!

Refreshing!
Guest - Richard Jones on Tuesday, 18 December 2012 19:36

Brian:
Very concise covering a very complex topic; I agree the worst is behind the industry; the consumer still reamins the hard part to judge the reasons for them to buy remain as strong as they were before the recession.

Brian: Very concise covering a very complex topic; I agree the worst is behind the industry; the consumer still reamins the hard part to judge the reasons for them to buy remain as strong as they were before the recession.
Guest - Brian Brock on Wednesday, 19 December 2012 14:35

Right on! As a replacement contractor we are very optimistic about the coming year. We have trudged through the mud over the past couple of years, but have grown each year. Next year we anticipate huge growth!

Right on! As a replacement contractor we are very optimistic about the coming year. We have trudged through the mud over the past couple of years, but have grown each year. Next year we anticipate huge growth!
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Wednesday, 21 February 2018