EBMI Asks: Where’s the Growth?

The title of an Electrical Board Missouri and Illinois (EBMI) panel presentation: “2009-2012: Where Is the Growth?” was enough to raise eyebrows on its own. But the presenters further challenged the audience to take risks in new markets, and in some cases to turn down work in order to stay true to sound business practices.

Those attending the triennial EBMI  economic forecast panel, held this year on Jan. 22 at Ameren UE headquarters, heard a decidedly different story from that presented by panelists three years ago.

New markets and ways of doing business offer a path of out of the current downturn,  the panelists told St. Louis construction management executives. But there are even more pitfalls than usual in a market filled with inexperienced competitors, bad credit, and a desire to find work at any price, they were told.

Thomas A. Garrett, assistant vice president, of the Federal Reserve Bank of St. Louis quoted from the December edition of the Fed’s “Burgundy Book”:

“Economic activity in the St. Louis zone remains weak,” Garret said.  “Retail activity has been down across the board, and retailers are mostly pessimistic about the near future. Declines in manufacturing and services have continued, as firms in many sectors report plans to reduce employment and/or output. Residential real estate remains weak, although commercial real estate markets have been more stable. Bank lending has fallen as lenders report tighter standards. The agricultural sector remains a bright spot, with generally higher yields and good crop conditions.”

Garrett told those in attendance that the revised St. Louis employment numbers for the current period may reveal a worse employment situation. On the national level, he said, flattening home prices, rising equity prices, better credit conditions, and low energy prices all suggest a rebound in mid-2009 followed by above-trend growth in 2010.

Jim Lucy, chief editor of Electrical Wholesaling magazine suggested that the educational and sustainability markets are two bright spots in an another wise grim picture. Demographics are the driver behind the continuing growth in education, particularly in K-12, Lucy said.

A variety of factors – from energy costs, to social consciousness, to incentives offered by utilities – point in the direction of opportunities in the green/sustainability market, Lucy said.

Tom Finan, publisher of St. Louis CNR and director of business development for Paradowski Creative, also touched on the growth opportunities in the sustainability market, as well as the Obama stimulus programs, and the education market. But he urged those in the audience to pay more attention than ever to working within their strengths and to not succumbing to working with companies whose poor business practices and relationships would make them a no-go during good times. He urged them to research potential projects and customers and encouraged them to confirm customers’ ability to pay.

“There is no good business with bad people,” Finan said.

He told the audience that by identifying areas within the growth niches that align with their companies capabilities,  and by marketing through the recession, they would come out of the downturn stronger and faster.

Other speakers on the panel were George Biderman account manager – St. Louis for McGraw Hill Construction/Dodge, who presented the McGraw Hill forecast, and Richard Mark of Ameren, who shared Ameren’s green power initiatives.

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