Grab Your Ankles…the Downturn is Coming

Looking at what is happening in the US right now would have you believe that a recession is the furthest thing we must worry about. Unemployment is holding steady at low levels, jobs are going unfilled, labor costs are reaching record highs, demand is still strong, and butterflies and rainbows are everywhere you look.

the Downturn is Coming

With the Federal government spending money as they print it (they do, actually) on everything that anyone wants to fund, such as eliminating student debt, inflation-fighting legislation, climate change, and much more, one has to ask, “who is going to pay for all these trillions of dollars in debt when the creditors come knocking on the door?”

Well, in fact, nobody will pay the debt because it will be announced that the US is in a recession, and Federal debts will be put on the back burner. You’ll have to pay your own company’s debts, though, even during the downturn. 

the Downturn is Coming

The Fed’s rate hikes have caused average mortgage rates to double from a year ago to 5.5 percent, causing a sharp fall in home sales and construction.

Higher rates will also likely weigh on businesses’ willingness to invest in new buildings, machinery, and other equipment. If companies reduce spending and investment, they’ll also start to slow hiring. Rising caution among companies about spending freely could eventually lead to layoffs. If the economy were to lose jobs and the public were to grow more fearful, consumers would further reduce spending.

Preparing your company for even a mild downturn is something very few even know how to do. What happens to all those modular home factories that were opened in the last 5 years when orders for housing start to dry up? Even the modular companies that survived 2008 won’t have a clue how to handle the new type of downturn about to hit them.

Offsite construction companies ranging from total home manufacturing to component assemblies and even advanced building science products will be forced to take off the rose-colored glasses and begin to realize that we’re heading toward a downturn faster than we think.

Being prepared for the worse and praying for the least is a natural occurrence in our lives and preparing for a downturn is no exception. The real problem is not many companies are preparing for a downturn. They simply can’t imagine it being as bad as some economists are predicting. 

A new DaVinci Offsite Construction Roundtable is forming called “Preparing for a Downturn,” where a small group of offsite and modular company owners, management, builders, developers, and others can meet every other week to discuss the options available to help them weather a downturn.

The DaVinci Roundtable is NOT a teaching or coaching series. It is an open discussion between all the people that register for each Roundtable in a peer-to-peer setting, with each sharing and contributing ideas and strategies with the group. 

If you have acknowledged, that there is a downturn coming in the offsite construction industry and want to learn what you can do to prepare your company, take a look at the next DaVinci Offsite Construction Roundtable and sign up today.

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print

Gary Fleisher

Gary Fleisher, “The Mod Coach”, has been entrenched in the offsite construction industry for most of his life. Having started his career in the lumber industry, Gary spent decades working with manufactured and modular home producers and homebuilders. For the past 15 years his blog and LinkedIn postings have introduced thousands to the benefits of factory-built construction and have served as a forum for industry professionals to share insights and perspectives. Gary lives in Hagerstown, MD with his wife, Peg.

Recent posts