The Effects of the Recession: Share Your Experiences

Readers,

I’d really like to hear from you. The recent economic outlook is dismal. It seems I read a new piece of bad news each and every day. Like Monday’s article from the New York Times reporting 62,000 more announced layoffs across the nation and around the world. It seems that it’s going to get worse before it gets better, unfortunately. As reported by CBS News, President Obama “pledged a recovery plan ‘that is equal to the task ahead.'”  

I just listened to a seminar by an economist for the Association of General Contractors (AGC). The seminar depicts that though the beginning of a turn around is forecasted by late summer or fall of this year, state and municipal budget may economically lag behind because they have to operate from revenues generated– and the economy has to turn around before that can happen. That is, unless the stimulus package provides funding for state public projects. But any jolt to the economy soon will have positive results, in my opinion. Beggars can’t be choosers, right?

On a more optimistic note, we continue to receive calls from some clients who are interested in getting their projects designed and “shovel ready,” so they can take advantage of the low building costs before the “turn around,” and before increased building costs are expected to occur.  The economist for the AGC predicts lower costs in some construction categories of -4 to 0% range for 2009 and price spikes of 6 to 8% in 2010.

To many, this may seem impossible to even consider. To others, I hope this may be a piece of good news in an otherwise dreary situation.

Please write to me and let me know how you’ve been affected by these conditions. What have you had to scale back on? Do you feel optimistic? 

John

To feel free

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The Silver Lining of the Recession: Lower Building Costs

It’s official. We’re in a recession and it is estimated to last longer than any since the Great Depression. Still, even a bleak economy can have a silver lining. If you have the resources, it could be a very favorable environment to build since the drop in oil prices paired with the recession has significantly altered building costs. As of December, the cost of steel is down 40 per cent from July—and when steel prices are down, everything else seems to follow suit.  

Recently, I received updated construction estimates for a horse barn and riding arena project that had been on hold due to the economic conditions. For this project, costs had dropped to 25% less than estimates provided only a few months earlier. That client has the resources and is moving forward with design and construction to take advantage of the market while they can.  There is speculation that we may be in for a period of inflation as we come out of the recession. This is another reason for those who can to prepare to move quickly before that occurs and impacts the cost of construction.

With a much-needed public works stimulus plan slated to begin once President Elect Barack Obama is sworn into office, it seems the building industry will get a boost in 12 to 18 months. In a sense, there’s now a small window of opportunity to take advantage of lower costs. Other clients are choosing to prepare design drawings and construction documents so they can be ready to quickly start construction at the lower prices as they feel more financially certain. With the housing market in decline, it seems all variables are on the way down from construction costs to mortgage rates—as low as 5.5% and the potential to lower to 4.5% if the government intercepts.

Another piece of good news is from a recent study by the U.S. Green Building Council reports that building green costs add an average of a 2.5% premium to the total budget—a figure much lower than the public may perceive. So not only is it cheaper to build now, one can do so with an eco-friendly approach without much added cost.

I know to some this may seem like overly optimistic reasoning, but the truth is, we’ve been here before. I can remember the last recession in the early 90s and how difficult it was to envision the future. Even though the outlook is still uncertain and the economic news grim, the recession has been in effect since last December—which can hopefully mean we may be on our way out of it sooner than we know.  It can’t get here soon enough if you ask me.

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Economic Downturn Hurts Horses Too

With everyone focused on the economy and concern about eroding home values and savings at a peak, economic forecasts couldn’t be much bleaker.  Even so, I’d guess that Wall Street probably isn’t paying much attention to the trickle down effect on horses. Horse owners and horse rescue organizations all over the country can tell you though, there’s a lot to worry about.

Photo by David Webb

With fuel and hay costs hitting record highs, many horse owners are finding it difficult to care for their animals. Horse rescue organizations across the country are faced with unprecedented pressure to care for surrendered and abandoned horses while simultaneously dealing with the same rising costs that force horses into their care. Worse still, both donations and adoptions are drying up as horse benefactors tighten their belts. Even previously adopted horses are returning to the shelters that found them new homes. National Geographic showcased the problem in a recent online article. 

The American Society for the Prevention of Cruelty to Animals has two emergency funds set up to help non-profit equine welfare and rescue organizations, Equine Fund Grants and Emergency Hay Support Grants. Please consider making a donation, volunteering, or fostering a horse through a local equine rescue group or donating to one of the ASPCA grant programs. Sadly, equine welfare groups are predicting this problem to escalate dramatically.

Let us know how horses are doing in your area—much depends on local weather and economic conditions. Are you seeing hay prices soar? 

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