EddieLeon Posted August 26, 2008 Share Posted August 26, 2008 As if things weren't bad enough, here is what AIA's chief Economist has to say about next year's construction activity: http://www.aia.org/aiarchitect/thisweek08/0711/0711b_consensus.cfm Health is the only industry that will have some growth. Yikes! Obviously, it's not all doom and gloom. There will still be plenty of work out there for us. But, it's a good time to keep a sharp focus on where the money will be flowing... Link to comment Share on other sites More sharing options...
Chad Warner Posted August 26, 2008 Share Posted August 26, 2008 Yikes is right! Link to comment Share on other sites More sharing options...
landrvr1 Posted August 27, 2008 Share Posted August 27, 2008 God, I have no idea what he or anyone else is talking about in terms of a building slowdown. I work in the furniture industry. It has never been busier. Haven't seen this much activity in years. And MASSIVE projects as well. Office renovations and new towers. If our clients are nervous, they sure aren't showing it. The residential market may have tanked, but the commercial market here in Chicago, as well as NY/DC/Philly/Etc is friggin booming. It flies in the face of all the economic forecasts that you get on the news. Go figure. If it's going to slow down, I wish it would hurry up. I'd like a free weekend again sometime before I die. Or am I the only one that's busy? ... Link to comment Share on other sites More sharing options...
3dp Posted August 27, 2008 Share Posted August 27, 2008 God, I have no idea what he or anyone else is talking about in terms of a building slowdown. ... you'd better get your head out of the sand no1 economic indicator of a health - construction - specifically houses - when that starts to slow then you know things are going down the tube i'm working in the Gulf and perhaps the busiest area of construction in the world - senior executives of developers i have talked to are nervous................ they reckon another six months and a lot more of these megaprojects are going to quietly disappear or go into hibernation I've had one project cancelled $400 million worth and it was on site............that now needs a redesign to fit a new cost model recession is on the way.............belive it you may be lucky after all you are furnishing what was constructed last year what are you doing next year?? or in two years and beyond my 3d work began to slow down around a year ago (around the time i deceided it was time to swop back to construction management) as it comes from UK markets and is now maybe 2 a month and to be frank i am enjoying the time away but i'm missing the cash for toys i'm old enough to remmber the last downturn 3 years of warehouse, courier and labouring - nothing was going on in construction - period something to consider............. Link to comment Share on other sites More sharing options...
Devin Johnston Posted August 27, 2008 Share Posted August 27, 2008 I'm not sure that the housing and commercial sectors are as interconnected as you're saying, the housing collapse had everything to do with bad lending practices and speculation and almost nothing to do with the strength of the economy at the time. It did have an overall negative impact on the economy with certain markets taking the brunt of the collapse in places like California and Florida, but other places like Texas have been virtually unaffected. Developers might have seen some constriction in their cash flow due to the credit crunch but I think most of them realize that now is the best time to move ahead with projects because prices in many areas have dropped significantly. There has also been recent data released that shows increased consumer confidence and the dollar has been rising which all indicates the economy is beginning to recover. I think we'll see a slowdown in growth for the next year or two but a recession doesn’t seem likely unless the world markets which haven't been doing well start to impact our economy or something really big happens. Link to comment Share on other sites More sharing options...
landrvr1 Posted August 30, 2008 Share Posted August 30, 2008 I'm not sure that the housing and commercial sectors are as interconnected as you're saying, the housing collapse had everything to do with bad lending practices and speculation and almost nothing to do with the strength of the economy at the time. That is exactly correct. 10 years ago the commercial and residential markets were more closely related. When one suffered, so did the other. It got down to simple investment routing and strategies. Both groups got their money from the same sources. Residential lending has become far more complex and risky. Original lender--> new lender who assumes the note--> underwriting firm that takes over the note in a bundle type package with other mortgages---> large bank (Bear Sterns, for instance, lol) who provides capital to the underwriters---> same large bank will then assume the loans---> large bank then tries to pump in cash from it's other investments/investors when the loans start to lose their value and go bust--> Fed steps in to kick in a $10billion dollar guarantee--> Fed borrows that money from China. Our national debt soars even higher.---> The Chinese party hardy because they make money regardless of how stupid we are.(1) Commercial real estate and building projects are far less complicated. There's a much smaller chain, and - actually - an enormous amount of accountability by comparison. The money isn't nearly as spread out and diversified as what you see in the residential mortage sector these days. I'm not saying that the economy is just as healthy as ever. It's not. The residential sector is suffering. However, I do know this: We have received more RFPs for $5million+ projects in the last 3 months than what we have seen in the past 2 years. That speaks for itself. When times are slow and companies start to get nervous, the VERY FIRST thing that any company will do is stop buying friggin chairs. That's not happening. Not here in the Midwest. Not in the East. Not in the West. Not in the South. My head is not in the sand. It's quite nicely above Terra Firma, thank you very much. It's also keeping a watchful eye on the economy and how it's being reported in the news. If you listen to just One Half Hour of any news program, you would think that the End Times have arrived and that we'll all be burning our furniture for heat within 6 months. Nonsense. It's getting a bit tough out there, but Change is upon us. Link to comment Share on other sites More sharing options...
Brian Smith Posted August 30, 2008 Share Posted August 30, 2008 I guess one silver lining is that we can all practice new techniques and experiment a little bit more with all the available software that we wouldnt normally have time for. This is a great time to build some standard operating procedures. Link to comment Share on other sites More sharing options...
Charles Gaushell Posted August 30, 2008 Share Posted August 30, 2008 Some good points here, but we are seeing work picking back up. The bigger players realize that the market will turn and they need to plan now. The residential market is clearly hosed in many locations due to greed and stupidity for the most part. It will come back but I'm not expecting to see another crazy condo frenzy again anytime soon.....though that market will bounce back too. So for us it has really been a matter of different sectors slowing but others just fine. There are clearly mixed feelings as to the bottom of and rebound of the markets from the developers and bankers that I've talked to. Time to be tough, tighten up and focus. But I don't believe the sky is falling. I'm just thankful I'm not new to this and trying to start a business. Link to comment Share on other sites More sharing options...
Inxa Posted August 31, 2008 Share Posted August 31, 2008 (edited) Great points. This reply would be in combination to a thread called marketing for dummies and this one. What do guys suggest for people who are trying move from freelancers to studio setups or even freelancers who plan to go for a marketing drive. Now days what I have seen is at least in the local market people want to see big or rather hear it big. I have had this experience, a interior designer have been to. I showed him my work, then he showed his work which he get's from a studio at triple the rate and worst quality. I didn't know what to say. So moved out saying thanks. It's a great deal to market and talk rather than that real work. Here, people believe in what you talk. Later if work is pathetic, they are okay with it or they move ahead to someone whom they can catch for their terms. I know freelancers here who charge terribly and their work is of poor quality but they keep getting clients. I have no clue how. I think it's difficult to break that network formed between architects, architect students and architects who have moved into the 3d field. These are some thoughts running in my head. Edited August 31, 2008 by Inxa Link to comment Share on other sites More sharing options...
Charles Gaushell Posted August 31, 2008 Share Posted August 31, 2008 I think you partially answered your question - success in business has a lot to do with connections and networking. For those of us that have been in business for a long time we typically spend less time chasing work and more cultivating existing relationships. The good news is that the poor work that you say you are competing against will eventually hurt those competitors. Just do quality work and keep working to build your network. It takes time but is the best way in my opinion to build a future. So you are going to have to keep plugging away and calling upon people you know. Trying to undercut competition screws yourself (you will always be expected to be cheap) and hurts the entire profession - it ultimately leads to poor quality of work too. Which is why I keep hearing from firms that have tried cheap 3d, that it was counter productive and they won't do that again. Link to comment Share on other sites More sharing options...
Inxa Posted August 31, 2008 Share Posted August 31, 2008 Thanks Charles. Great points. Very helpful. Very correctly put, I tried being cheaper than the competitors never worked. People take you for granted and keep giving loads of work the same amount. Finally either I did complete the work but the effort was tooo much for the final amount I received. "Just do quality work and keep working to build your network. It takes time but is the best way in my opinion to build a future. So you are going to have to keep plugging away and calling upon people you know." Very important point for me. Link to comment Share on other sites More sharing options...
JDillon Posted September 2, 2008 Share Posted September 2, 2008 Well, if you haven't already it's time to make some budget cuts. I had to sell my boat earlier this year. She was a beauty but it was time to go. Besides my wife and I have a newborn so, no time for boating anyway. This next section is really for the smaller shops... 1. For those of you paying for it, shop around for cheaper health insurance plans. 2. Make a personal/home budget to help trim any payroll costs. 3. Tighten up your current operations as much as possible. 4. If you rent space talk to your landlord, see if you can move to a smaller space in their complex. If your lease is coming up consider moving back home for a short while. Egads! This is for anyone... 1. Like everyone is saying nurture your current relationships. 2. Market Market Market. It's a shameless job but somebody's gotta do it. 3. Prepare to move into additional markets and/or offer different products. 4. Lowering prices too much only works if you intend on keeping them down for a long time. It is very hard to raise prices once you have lowered them. Remember, the healthcare industry is not just hospitals. It's assisted living facilities, surgery centers, clinics etc... The aforementioned report does have a silver lining. Good Luck! Jason Dillon Link to comment Share on other sites More sharing options...
shaneis Posted September 4, 2008 Share Posted September 4, 2008 I was just reading Jeff Patton's blog over at cgSociety... (August 27th post) http://jeffpatton.cgsociety.org/blog/ That can't be a good sign. Link to comment Share on other sites More sharing options...
EddieLeon Posted September 4, 2008 Author Share Posted September 4, 2008 3. Prepare to move into additional markets and/or offer different products. I found this golden nugget last night. It might help us focus on markets that are doing well: http://www.communitywalk.com/arlington/va/recession_by_region/map/281673 Link to comment Share on other sites More sharing options...
Devin Johnston Posted September 4, 2008 Share Posted September 4, 2008 I was just reading Jeff Patton's blog over at cgSociety... (August 27th post) http://jeffpatton.cgsociety.org/blog/ That can't be a good sign. I'm not sure you can deduce that the economy is crashing from one guy's blog. Link to comment Share on other sites More sharing options...
EddieLeon Posted September 4, 2008 Author Share Posted September 4, 2008 I'm not sure you can deduce that the economy is crashing from one guy's blog. True. But, there is a big difference between Kentucky and Texas. Just because things are booming in Austin doesn't mean they are the same in Lexington. Also, some artists rely heavily on their local market. Others are more web/technology savvy and have clients all over. It's understandable how he feels that way, but it's sad that a talented artist like him is giving up so easily. Maybe he should be reading some of the posts on CGArchitect instead Link to comment Share on other sites More sharing options...
Nic H Posted September 4, 2008 Share Posted September 4, 2008 scare mongering imo just means more time to do personal projects try stuff you have wanted to do for ages Link to comment Share on other sites More sharing options...
EddieLeon Posted September 4, 2008 Author Share Posted September 4, 2008 scare mongering imo That's not the intent here and I don't think the AIA's Economist would gain anything from scaring it's members. He is just being realistic, informative and helpful. Are you suggesting that artists in the US should ignore all the facts about the economy? Personal projects are not going to pay the bills. I would rather spend my time marketing and trying to understand the market. Link to comment Share on other sites More sharing options...
Nic H Posted September 4, 2008 Share Posted September 4, 2008 Sorry Im not saying you are scare mongering, I just think the 'credit crunch' gets overblown in the media in general. You just have to get on with it dont you. Diversify and adapt to different markets while keeping things interesting for yourself, and if that means ditching hard hit construction based / architectural 3D in favour of some other related discipline then so be it. Link to comment Share on other sites More sharing options...
JDillon Posted September 4, 2008 Share Posted September 4, 2008 Well, let's try to look at it this way. Yes, the economy is slow right now and the forecasts don't look good. Expectations are low, so any work will be a positive move in the right direction. Thank You, Jason Dillon Link to comment Share on other sites More sharing options...
EddieLeon Posted September 4, 2008 Author Share Posted September 4, 2008 (edited) Sorry Im not saying you are scare mongering, I just think the 'credit crunch' gets overblown in the media in general. You just have to get on with it dont you. Diversify and adapt to different markets while keeping things interesting for yourself, and if that means ditching hard hit construction based / architectural 3D in favour of some other related discipline then so be it. Yep. I agree with you 100%! Edited September 4, 2008 by EddieLeon Add Quote Link to comment Share on other sites More sharing options...
shaneis Posted September 5, 2008 Share Posted September 5, 2008 I'm not sure you can deduce that the economy is crashing from one guy's blog. I'm sorry, I don't recall making that deduction. It's just that when one of the industry leaders is finding it hard to pull work, it solidifies the notion that surviving an economic shake-up is all about strategic business practices, not artistic skill and ability. Hey, if I ran a business near Lexington, I'd be calling him right now and offering him a job - it's good business to hire a top-dog Link to comment Share on other sites More sharing options...
Antisthenes Posted September 5, 2008 Share Posted September 5, 2008 7000 homes a month foreclosed at a increasing rate above 6% as well as unemployment creeping above 6.5%. Link to comment Share on other sites More sharing options...
EddieLeon Posted September 5, 2008 Author Share Posted September 5, 2008 7000 homes a month foreclosed at a increasing rate above 6% as well as unemployment creeping above 6.5%. Those are scary numbers. It seems like everyone is holding back on spending. Even the companies that are doing well are holding back for fear that things might get worse. It's a big snowball effect. Maybe if Obama wins the election everyone will start to feel more positive Link to comment Share on other sites More sharing options...
JDillon Posted September 5, 2008 Share Posted September 5, 2008 "Maybe if Obama wins the election everyone will start to feel more positive" Yeah right, I can't wait for him to raise my taxes. And if you think health insurance is expensive now, wait until its free. Thank You, Jason Dillon Link to comment Share on other sites More sharing options...
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