It’s that time of year again where media, prognosticators and media prognosticators try to look into the immediate future to predict, and make sense of, the short-term economy. And, yes, even in this uncertain climate. Mechanical Hub will be featuring a series of exclusive Q & A sessions with industry leaders and players to get Read more
The Forecast Series Part II: ‘Pandemic Pain’ in Non-Residential Construction
It’s that time of year again where media, prognosticators and media prognosticators try to look into the immediate future to predict, and make sense of, the short-term economy. And, yes, even in this uncertain climate. Mechanical Hub will be featuring a series of exclusive Q & A sessions with industry leaders and players to get their views on the future, and living in a COVID world. The second part of the series, we talk with Matt Erickson, CEO, C.J. Erickson Plumbing Co., Alsip, Ill., a plumbing contractor for commercial and site work since in the Chicago area since 1906.
MH: When it comes to 2021 industry forecasts, the most resonant word I hear is optimistic. That word can become hollow if it doesn’t have any substance backing it up. What does the short-term economy look like as it relates to your company?
ERICKSON: I hear the same “optimistic” description but believe that it is a National forecast and includes all sectors. We’ve been following the AIA info since March and believe non-residential construction will be down in 2021 and look brighter for 2022 in the local Chicagoland market. Our estimating has been steady so far this year compared to 2020 but don’t feel the pace will remain the same for February and March.
MH: Piggybacking off of that , what are some indicators you look at to determine trends, movements, etc.?
ERICKSON: In addition to the AIA data, we follow local trade employment statistics (how many tradesmen are out of work), we look at hours worked by our field employees and compare week, month and year over year. Our estimating data can point to general trends in quantity and size of projects in the market.
MH: Do you think companies have enough backlog to carry them through at least the first half of 2021?
ERICKSON: That’s a tough one… we’re seeing a fair number of opportunities but they are smaller in value and duration. I think there will not be enough large, long duration (12 – 24 months) projects available this year to maintain the collective industry hours worked in 2020. Prices are falling and end users are getting great deals as everyone competes for fewer good opportunities.
MH: I read somewhere that at the rate the U.S. is distributing the vaccine, we should be back to “normal” by 2024. Perhaps that’s a bit overly dramatic, but how does (has) C.J. Erickson positioned itself from the “fallout” of COVID-19?
ERICKSON: The non-residential construction process can be time consuming and I believe the industry will feel the pain from the pandemic long after the some sort of “normal” returns for the most affected industries. We are taking some time to clean-up some processes and update our training, in preparation for the gradual climb back to normal.
MH: Does a change at the presidential level change outlook for your company, if at all? (Infrastructure, green energy initiatives, stimulus, etc.)
ERICKSON: Possibly, if any of the programs or spending props up the commercial and industrial constriction market. Otherwise, I do not believe the new administration will change the outlook for our company.
Matt Erickson is CEO of C.J. Erickson Plumbing Co., a Chicago-area plumbing contractor since 1906. C.J. Erickson Plumbing Co. employs over 100 people including union plumbers, laborers and operating engineers. We specialize in commercial plumbing, industrial plumbing, hydro-excavation and site utility and underground services.