Glazing execs forum focuses on economy, BIM
The third Glazing Executives Forum took place on the first day of GlassBuild America, Oct. 6, at the Las Vegas Convention Center. About 200 industry professionals participated in the forum, up from 143 last year and 101 the year before, said Phil James, president and CEO, National Glass Association, McLean, Va., in his welcome address.
“Houston, we have a problem,” said Jeff Dietrich, senior analyst, Institute for Trend Research, Concord, N.H., during his presentation, "Industry Economic Forecast and Q&A." “The stock market’s down 435 points today, and CNN reported today that 56 percent Americans believe we’re heading into a depression rather than a recession.”
It’s interesting that the market went down even after the $700 billion bailout, Dietrich said. “It’s because we don’t know who, where and when that money’s going to be dispersed to. The bill that was passed is a skeleton. Over the next few months they will flesh it out. Until then, there will be much more volatility in the market,” he said. “It’s deceptive to say that the taxpayers won’t pay for the bailout one way or another. And I don’t think the government will wipe off any one of your bad debts.”
We’ve come through a very strong growth period of industrial production, but that trend is just about over, Dietrich said. A negative 2.9 percent growth is forecasted in 2009 (economy measured by industrial production). “2009 is going to be a weaker, softer and negative year than 2008, and first part of 2010 will be more negative than 2009,” he said. “One positive, the interest rates are relatively low historically, but nobody's lending money; it is unavailable to us and to businesses. Therefore interest rates are irrelevant.”
Home prices continue to fall, and it’s a big question mark in the bailout, Dietrich said. “We don’t know where those assets will be valued.” What happened in housing is what happened on Wall Street. You’re building, you’re growing, you’re over-excited, you over-build and then it fails. The same principle applies in both places, on a larger scale in Wall Street. They’ll minimize, put some restrictions and guidelines and have a leaner and meaner organization.”
Unemployment is rising, and it at 6.1 percent now, Dietrich said. Last year at this time unemployment was at a little over 5 percent.
Stock markets in Asia and Europe are down. “If we go through a recession, we make sure to export that to other countries,” Dietrich said. “This is going to be a global slowdown. It will probably start turning around in the latter half of 2010.” However, it’s not necessarily bad for businesses and economies to go though recession. “From my perspective, recessions are a wellness program for the economy,” he said. “We’ve been though a spending binge in housing, nonresidential construction, and all of a sudden it’s tipping over. In the four phases of the business cycle chart (link), most of you are probably in phase C.” It’s not an Armageddon or the end of the US economy, but a slow-down that’ll result in a leaner and meaner economy down the line, he said
It’s not all doom and gloom, Dietrich said. “Our exports are at 23 percent, doing very well. China’s export’s at 17 percent. Office building construction is up 12.9 percent, commercial construction, up 9.8 percent, industrial building 37.1. Service sector, commodities, energy and alternatives, food, used machinery and equipment are all doing well. However, other sections of the economy, such as, aircraft production, retail sale, auto production, paper, banks, housing, are slowing.”
It’s a broad-based implosion, Dietrich said. “The last time we had a negative cycle in retail sales was in 1993. We’re going into one now. How are we going to spend our way of this mire is the question. It’ll be 2010 when housing will turn around.”
The year 2010 will be a transition year, Dietrich said. “You’ll tighten your belts, re-evaluate expenses and reset. You will not shut your door and go away.”
Going forward, “make the most of the lag time; maintain a strong cash position; avoid unwarranted optimism for 2010; diversify where you can be effective; have a plan to deal with the recession; and look for strategic acquisitions to gain market share,” Dietrich said.
U.S. still is responsible for 25.8 percent of the world’s GDP, created by 6 percent of the world’s population, Dietrich said.
Professor Charles Eastman, director, AEC Integration Laboratory, Georgia Institute of Technology, Atlanta, presented BIM for Window and Window Wall Producers. “BIM is changing the way contracts should be written, it’s changing liability issues,” he said. “The software provides digitally readable models, integrated capability for analyses, reductions in design errors, reductions in construction errors and faster construction.”
BIM is an enabling technology, a process and not just a tool, Eastman said. The basic technologies that enable BIM: parametric modeling tools for buildings and interoperability capabilities, he said. “Architects refine their design incrementally; BIM automates the information flow of that process,” he said
BIM cuts down on production time. “There’s huge productivity gain,” Eastman said. “Off-site fabrication is more productive than on-site fabrication. There’s more value-added dollars in off-site. So, you’re in the right industry.”
In the BIM breakout session, Richard Voreis, CEO, Consulting Collaborative, said architects are talking about two hot buttons: sustainable design and BIM. A four-story office building job, a $445,000 bid, that usually takes two-three days to bid on, took 4 minutes to bid on with BIM, he said.
Some contractors are converting their architects’ 2D drawings into 3D drawings at their own cost. Holder in Atlanta is a company that’s doing that, finding errors in their drawings when converting and fixing those before bidding, Voreis said.
BIM’s “implementation into this industry is not a question of if, but when,” Voreis said.
To start off:
- Get an estimating system. DeMichele Group, City of Mesa, Ariz., is a good company to use, Voreis said
- Align yourself with building product manufacturers who have BIM product models, such as Kawneer, Norcross, Ga., and Efco, Monett, Miss.
- And get educated in BIM; visit the BIM forum site or bim.arch.gatech.edu.