Wednesday, January 19, 2011

Reprographers will have a better year in 2011. Finally, positive trends developing!

Several factors, considered on a collective basis, are indicating that 2011 will be a better year than 2010 for Reprographers. Positive trends developing….

In an article published on AGC's web-site, on Jan 4, 2011, construction activity is reportedly on the increase and construction employment is on the upswing in the majority of metro areas in the U.S. That's good news for the Reprographics Industry.

Add to that three more pieces of good news:

Add to that three more bits and pieces of good "trend" news:

(a) the CMBS market (financing) is beginning to come back to life. (Per articles I've read in the past three or four weeks), and

(b) the AIA ABI Index is gaining momentum; has been 50+ three out of the four most recent months (over 50 for December, November and September, under 50 for October), and

(c) the Reprographics 101 "PPoP" Index is gaining momentum and was greater on both a y/o/y basis and on a rolling quarter basis.

Based on these factors, I'm going to "predict" that 2011 will be a better year for Reprographers than 2010 was. I'm also going to predict that Reprographers will see an increase in project activity, sequentially as the year progresses. My prediction is that ARC's 2011 Sales will exceed ARC's 2010 Sales by approximately 15%.

Here's some of the article I found on the AGC web-site:

Construction spending in November totaled $810 billion at a seasonally adjusted annual rate, up 0.4% from October and the third straight monthly gain, the Census Bureau reported on Monday. The total was down 6.0% from a year ago, the smallest year-over-year drop since April 2008. Private residential construction spending rose 0.7% for the month and fell 5.3% year-over-year. All three residential components rose for the month but fell year-over-year: multifamily, 3.0% and -30%; single-family, 0.6% and -3.0%; and improvements to existing single- and multifamily, 0.4% and -3.4%. Public construction rose 0.7% for the month and 4.2% year-over-year. Of the four biggest public components in descending order of current size, highway and street fell 1.0% for the month but climbed 6.9% over 12 months; public educational construction, 1.0% and -6.7%; public transportation, 1.2% and 0.5%; and sewage and waste disposal, -1.7% and 7.4%. Private nonresidential construction slipped 0.1% and 16.5%. In descending order of current size, private power rose 0.9% for the month (the fourth gain in a row) and fell 5.4% year-over-year; commercial (retail, warehouse and farm), -0.3% and -15%; manufacturing, -2.3% and -35%; health care, 0.8% and -6.0%; and private office, -1.7% and -24%.

In a hopeful sign for private construction, “Big U.S. companies have cleaned up their balance sheets and, flush with cash, appear open to using it in 2011 on factories, stores and even hiring,” the Wall Street Journal reported on Monday. Corning Inc. “is investing $300 million to expand its research and development center near its headquarters in Corning, New York. [Cummins Inc. is] building a technical center in Seymour, Indiana, for huge engines used in mining equipment and oil rigs….Tractor Supply Co., a farm and ranch retail chain,…in 2011 will spend $50 million to erect a 840,000-square-foot distribution center in Kentucky and $20 million to retrofit four other distribution centers, said its chief financial officer, Anthony Crudele. After two years of selling warehouses, ProLogis will spend $800 million to $1 billion this year on new warehouses in the U.S., Europe and Asia….Kohl’s Corp. plans to open 40 of its discount stores in 2011…, said CEO Kevin Manning. While that’s more than the 30 stores Kohl’s opened in 2010, it is below prerecession levels of 75 to 100 annually….General Electric Co. said it…is expanding research operations in Brazil, China and Michigan.”

“The amount of occupied U.S. office space increased for the first time in nearly three years during the fourth quarter of 2010 as more companies that had been postponing real-estate decisions got back into the leasing market,” the Journal reported today, citing a study of 79 metro areas by property-research firm Reis Inc. Average office rents rose by 0.2%, “registering their first uptick since the second quarter of 2008…The national vacancy rate of 17.6%, which remained unchanged from the third quarter of 2010, is the highest since 1993, according to Reis….Real-estate developers expect further pain this year as more debt comes due, refinancing options remain limited for many, and supply continues to exceed demand in overbuilt markets such as Phoenix and Las Vegas [where vacancy rates are] still hovering around 25%.”

Construction employment increased in 71 metro areas, fell in 217 and remained level in 49, an AGC analysis of Bureau of Labor Statistics data showed. The number of areas with increases was the largest since 2007. (BLS combines mining and logging with construction in metros that have few employers in one of the industries to prevent data disclosure.) Phoenix-Mesa-Glendale added the most construction jobs (3,100 jobs, 4%). Hanford-Corcoran, California added the highest percentage (33%, 300 combined jobs). Other areas adding large numbers of jobs included Nassau-Suffolk, N.Y. (2,200 combined jobs, 3%); Pittsburgh (2,100 jobs, 4%); Greeley, Colorado (1,400 combined jobs, 16%); and Beaumont-Port Arthur, Texas (900 combined jobs, 5%). The Chicago-Joliet-Naperville metro division lost the most construction jobs (-14,800 jobs, -11%) of any area or division of a large area. Napa, Calif. (-1,900 combined jobs, -33%) lost the highest percentage. Other areas experiencing large declines in construction employment included Las Vegas-Paradise (-13,400 jobs, -23%); the Los Angeles-Long Beach-Glendale division (-8,100 jobs, -7%); Atlanta-Sandy Springs-Marietta (-6,400 jobs, -7%); and the Oakland-Fremont-Hayward division (-5,900 jobs, -11%).

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