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Sales, Projections & The Economy

Discussion in 'Landscape Lighting' started by INTEGRA Bespoke Lighting, Jan 17, 2008.

  1. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Messages: 4,102

    So how goes it guys?

    While your network news is dominated by politics and the Primaries, our news is leading with the sour state of the economy in the USA and the everyone tossing around the "R" word.

    I am wondering if you are starting to notice a slow down in inquiries and sales? Has the sub-prime mortgage debacle filtered down to home improvement contractor sales yet? How are you planning to manage a period of economic slow down?

    As much as it is great to chat about what lamp works best and what fixture is better, I think it would be wise to share some market survival strategies as well.

    Here demand is still strong and sales are going quite well. I have close to 1/2 of last years' sales either in progress or lined up for spring installations and am in the midst of initiating my first (highly) targeted mailing ever. (not a mass mailing, I am using a networked and verified list)

  2. extlights

    extlights LawnSite Senior Member
    Messages: 439

    Last year was our best year to date and we're hoping that this year will be better. Here, we haven't seen any slow down as of yet. People are still doing all kinds of home improvements, and we get inquiries all the time just from seeing the trucks driving around.
  3. Mike M

    Mike M LawnSite Bronze Member
    from usa
    Messages: 1,988

    state of the economy in the USA

    What happens here happens everywhere. James, that big nickel you were lighting is now hurting CAN exports against our shrinking dollar.

    All the stuff I read and watch is all about recession. Ben Bernanke is hiding under a desk, and I'm not sure if he's more worried about banks or the missile build up in Iran or the reunification of Korea or the gas-consuming Chinese.
  4. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Messages: 4,102

    Mike: Interesting times ahead to be sure. Once you have made this realization, how are you planning to weather any 'storm'? Building a "recession proof" business is a dream of many but harder to do then many realize.

    Is this the time to vertically integrate into the market?
    Is diversification a better strategy, not putting all your eggs in one basket?
    Time to inject capital into the business to develop growth or hunker down and weather it out?
  5. Lite4

    Lite4 LawnSite Gold Member
    Messages: 3,173

    This is exactly why I became a helicopter pilot. I thought if the economy ever tanks completely, I can always go anywhere in the world and fly for someone. However, I don't believe we are anywhere close to that right now. The wealthy always usually have their money protected, it is the middle class that takes the real brunt in a recession. Since it is the wealthy that our product and craft appeals to, I feel confident that sales will continue just fine. The wealthy may be feeling a little pinch, but the price of a lighting system for them is chump change. It is and always will be a quality of life issue for them, some things people will just not do without when they can afford it. Just my ramblings....sorry.
  6. Pro-Scapes

    Pro-Scapes LawnSite Platinum Member
    Messages: 4,180

    its been slowing here just due to the holidays. Things will perk up. Always dead in jan for our business both landscaping and lighting.

    I noticed a pinch on smaller middle class systems but thoes with the funds continue to spend and do so with a passion. I am still seeing plenty of new luxury cars on the roads.
  7. NightScenes

    NightScenes LawnSite Silver Member
    Male, from Kingsland, Texas
    Messages: 2,214

    Things have never been busier here!! I think too many people are trying to cast the "gloom and doom" net all over the county. The new home construction in this area has slowed down to a more manageable level but it's still a mad house so-to-speak. I do very little work on new construction so I'm glad to see people spending money on the homes they have.
  8. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Messages: 4,102

    This is a bit long but worth a view. From the current issue of Maclean's Magazine, a Canadian Weekly much like (but way better then) your Time Magazine.


    For nearly two years, pundits have preached about the "decoupling" of the global economy, arguing that the fate of the world no longer hinges on the spending habits of Gary and Lousie from Scranton, Pa., but on the teeming middle classes of Russia, China and India. It sounded good, but now the word on everyone's lips is "recoupling."

    According to a growing chorus of analysts and academics, the U.S. growth machine is simply too important, and its ties to other economies like Canada's and China's too complex, for the effects of a deep U.S. recession not to be felt the world over. As Nouriel Roubini, chairman of research firm RGE Monitor and a man well known for his bearish outlook on the American economy, wrote recently: "Since the U.S. will not just sneeze, but is risking a serious case of protracted and severe pneumonia, the rest of the world should start to worry about a serious viral contagion from this U.S. sickness."

    The symptoms of that sickness are all too stark. The U.S. housing crisis continues to worsen by the day, and the infection is spreading. Credit card and automotive loan companies report a growing number of customers aren't paying their bills, while personal bankruptcy filings among Americans shot up 40 per cent in November, as nearly 800,000 consumers threw in the towel that month. And that doesn't even include the over-stretched last-minute Christmas crowd. Making matters worse, job growth in the U.S. has hit the skids. In December, the unemployment rate jumped to a two-year high of five per cent from 4.7 per cent in November, one of the most pronounced spikes in decades.

    If the threat of mass layoffs wasn't enough to pinch consumers, the price of oil is near an all-time high of US$100 a barrel, with some predicting it could go as high as US$150. Anxiety over prices at the pumps is putting a final nail in consumer confidence. Most Americans just don't see how their country can escape this morass without suffering a long and painful recession. It's a sentiment shared the world over. When the price of gold broke through US$900 an ounce last week, as the U.S. dollar took yet another plunge, gold bugs gleefully declared it was a sign investors have finally awoken to the weakness of the greenback.

    Under the old decoupling theory, of course, none of this was supposed to matter much to those outside America's borders. The idea took hold in 2006 when firms such as Goldman Sachs and JP Morgan sought to calm investor fears about the effects of a possible U.S. slowdown. At the time, the current subprime housing crisis was just the stuff of nightmares for a few thousand mortgage brokers and bankers. Drawing on their best catchphrases, analysts spoke with confidence of how the "locomotive" of global growth was "rotating" away from America to Asia and Europe. Since countries in those regions had greatly reduced their reliance on American consumers for their own growth, the theory went, they would blissfully keep humming along.

    And so, hopefully, would the Canadian economy. With thousands of planes, trains and trucks crossing the border with the U.S. each day, Canada has long been held hostage to the gyrations of the American economy. Roughly 75 per cent of all Canadian exports wind up south of the border. A sneeze there, and we usually come down with the flu. If the U.S. catches a cold, well, call up the undertaker. But if the world really did decouple, if Europe and Asia held their own this time around, then big Canadian commodity exports like oil, gas and metals would still be in high demand and would keep us in good stead.

    One credit crunch later, and many of the big proponents of the decoupling theory have completely backtracked. Not only is a growing army of analysts now pegging the chance of a U.S. recession at close to 100 per cent (some believe it has already begun), they've all but abandoned hope that the world has somehow detached itself from the States. As Peter Berezin, an economist at Goldman Sachs said in December, "We think 2008 will be the 'year of recoupling.' "

    If that sounds like a face-saving exercise, it may well be. The thing is, there was never much evidence that the world decoupled in the first place. Consider, for instance, just how fast the liquidity crisis swept the globe after the U.S. housing market blew up last year. When financial markets seized up in August, it wasn't just a Wall Street phenomenon. Thanks to mind-bending financial engineering strategies that sought to harness the free flow of capital around the world, firms had packaged portfolios of U.S. consumer loans and mortgages and resold them to investors worldwide. Within days of panic gripping New York, hedge funds and investors in Canada, Europe, Asia and Australia all began to register serious problems, and central banks on four continents were forced to inject billions of dollars of liquidity to keep markets from grinding to a halt.

    But what started in the abstract world of global finance has quickly morphed into an old-fashioned slump. Britain, with its own collapsing housing market, and Germany, which has been stung by the euro's rise against the greenback, have warned that their economies are buckling. In December, global manufacturing activity fell to a 4½-year low, driven by the slowdown in the U.S. And despite the assurances for Canada that this time it would be different, the country shed 18,700 jobs in December — the most since 2003. The business weekly Barron's recently predicted a sharp correction for the loonie this year as U.S. economic pain spreads. "Economists can talk all they want about decoupling," the paper said, "but the Canadian economy is as inexorably tied to the U.S. economy as maple syrup is to pancakes." Rather than decoupling, the world economy seems as closely tied as ever.

    Even as Europe wobbles, though, there are still many analysts holding out hope that emerging markets in Asia will successfully dodge the U.S. recession. For one thing, there's no denying those countries have become powerhouses in their own right. Three countries — China, Russia and India — accounted for half of all global growth last year, according to the International Monetary Fund. And those countries have taken steps to cut their dependence on American shoppers. Last week, analysts at BCA Research in Montreal pointed out that China's share of exports to G7 countries has declined in importance, while exports to other emerging markets are booming. And that should provide some cushion against the effects of a slowdown in Europe and the U.S.

    Still, others fear that won't be nearly enough to keep the economy humming. For all the talk of diversifying, the U.S. still accounts for about 20 per cent of China's direct exports, while many of the country's remaining shipments find their way to the U.S. through other nations, and economists are slowly scaling back their projections for China's growth. Meanwhile, many are closely watching to see what happens after the Beijing Olympics this summer. Once the frenzied pace of construction is over, and the cameras turn off, China may be forced to tighten its lending practices to cool its overheated economy. Analysts at Boston-based Global Insight warn there's a 33 per cent chance that will suddenly slow Chinese growth. A U.S. recession would only crank up those odds.

    More and more, those who suggest Canada can weather the current economic storm risk looking like Panglossian optimists — in the face of mounting evidence that Canada's exposure to the U.S. will drag us down too, they continue to insist that, somehow, we'll still pull through on the backs of emerging markets. If such a view is proved right, then Canada should, at worst, suffer a mild slowdown before picking up steam again. But if they're wrong, well, just look south of the border to see what's in store.
  9. Mike M

    Mike M LawnSite Bronze Member
    from usa
    Messages: 1,988


    Stop kickin us while we're down, man!

    That editorial staff sounds more insecure than proud. Selecting words like "hostages" to the USA, and "exposed" to us like we're harmful. It's more like "reliant" on us for commerce and national "security."

    Also, the last time I checked, I was not a stock holder or subscriber to Time Magazine. It is owned by an entertainment conglomerate that makes movies and music, online services, etc.

    I believe the weekly you quoted from is the only weekly made by Canadians. Interesting, how much of the content is gossip about the celebrities here (you left that out).

    If you want biz info, subscribe to the Wall Street Journal every day, if you don't like the American analysis of global biz, try The Economist out of London. Now that's an awesome weekly read.

    Eh? :)


    Mike M.
  10. INTEGRA Bespoke Lighting

    INTEGRA Bespoke Lighting LawnSite Platinum Member
    Messages: 4,102

    I'm not kicking you Mike, I just thought you might appreciate a more 'global view' of the current situation. Having spent a bit of time in the good ole USA, I know how brutally shallow, one sided and generally globally devoid the news media there is.

    As for your assesment of the writing, when have you ever known a Canadian to be overtly proud? We certainly are not jingoistic. Do not mistake balanced and thoughtful for insecure, and as far as being reliant upon the USA for national security...Please! Don't get me started! (I can only surmise you think this because you have been absorbing the nonsense and BS that your news media 'reports', so I guess it is not really your fault for thinking this.) :drinkup:

    Maclean's is a pretty solid weekly news Magazine Mike. It is award winning and venerable, offering a broad spectrum of coverage from many different viewpoints. It is not The Economist by any stretch (I used to subscribe but don't have enough time to read it anymore.) and it does report on topics of entertainment, literature, films, sports, etc etc, what ever is topical and timely... it is a "news" magazine after all. Here, our "Wall Street Journal" is called the Report On Business (ROB) Published by The Globe and Mail and they do one heck of a good job. http://www.reportonbusiness.com/

    So, now that all that is out of the way... *trucewhiteflag*

    Care to take a trip up North sometime to visit the "Land of the Free, & home of the Polite"? You might just have one heck of a time.. just make sure to bring your woolies Eh? (It is -25 at 9pm, clear and cccold)


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