Editor's Letter: Cautious Optimism

As industry economists drag out their crystal balls for a look at 2006, it appears that it should be a pretty good year for concrete contractors.

While the details differ, the general consensus seems to be a nice increase in nonresidential construction and a soft landing in the residential market. While a lot of factors seem to point to a slowdown in residential construction, it’s worth noting that this slowdown has been predicted every year for the last five or six years — each of which ended up being a record year. For more on what to expect for 2006, check out our market forecast article that starts on p. 26.

Something that’s been a big topic of discussion in our offices is the impact of hurricanes Katrina and Rita on the construction industry. Too many people seem to have the idea that this is some sort of boon for contractors. Part of this has been fed by the consumer media talking about building booms in Louisiana, Mississippi and other hurricane-ravaged areas. While it makes a convenient story, the simple truth is it’s going to be a long time — if ever — before many of those areas will be rebuilt.

There are probably years of cleanup ahead before any large scale construction takes place. And when it does happen, what will it be? Especially in New Orleans, we’re hearing that many people may never return. Some estimates are that the metro area will end up being only about half its previous population. When rebuilding finally does occur, it is unlikely it will be of a large enough scale to make up for all of the unemployment and delayed projects caused by the storm.

So how are things in your region? The national outlook seems promising, but we’d like to hear about your local market. I can be reached by e-mail at Jonathan.Sweet@cygnusb2b.com or by phone at (800) 547-7377, ext. 321.

And if you will be attending the World of Concrete in Las Vegas this month, be sure to stop by and see us. We’ll be in the Central Hall, booth #4022.

Jonathan Sweet