Crystal Ball

[DMiller]

Not really, cost of fuel, cost of cement has not gone down but rather UP. Labor to produce and haul Concrete then finish it out will keep those prices high.

 

[aighead]

At least that'll keep me from thinking too hard about it.

 

[AzIron]

Material prices wont come down till the market stagnates

 

[cfherrman]

Prices won't come down until the zombie apocalypse, we are already paying high prices why lower them?

 

[CM1995]

Good question Crane Op.

What I have seen is the ITB's for any sort of private retail project such as strip malls, restaurants and other small retail vanish over night. I haven't received an ITB for a viable commercial job in the last 1-1.5 months and don't expect it to change anytime soon.

This is to be expected as the Fed has raised interest rates on new money not only for future construction loans but on consumer loans and credit cards as well in order to get inflation down. Since consumers have less disposable income, there is less need for a place for them to spend it in. I don't know how many % points hikes it's going to take to control inflation but I know how many the Fed are going to use..

Muni and gov't jobs have held the same pace of ITB's however we are not heavily in that market yet so I lack the historical data to see if it's a trend one way or the other.

I think our residential market specifically the luxury garden homes on small lots sold in the $500-700K range over the last 3 years are at least $100K over valued. Just my opinion after getting killed in the '08 recession.

This time around it's different than '08 but not in a good way IMO.

 

[KSSS]

Yea the causes for the 08 demise are not the same, but the effect will likely be the same. I saw commercial projects set to go, crumble this Fall. Some due to interests, and others to out of control costs. This could be a tough a year or years. The Gov is trying to kill growth to kill inflation, they are certainly killing growth. Kinda like trying to kill cancer. The cure is only slightly better than what your trying to stop. It is going to be bloody bidding next Spring, tons of new excavation companies, all of them trying to make payments. Welcome 2008....

 

[DMiller]

Wife is still pushing Sell the place, move to smaller requirement digs, did not pay attention to or remember her own panic attack as of last offer. She wants to retire at 62 and not have to do anything, told her that does not work but not listening.

Would like to find a five to ten acre tract, MINIMAL Grassy areas, have existing structures can adapt and modify for purpose, construct a SHOUSE, mostly Garage and a two bedroom two bath home NO Basement on a Red Iron Frame. She would have to discard so much would lose her mind, I have nothing that is not saleable or disposable and she is quite aware. I like Wood Stoves for heat and ground loop heat pump is fine for a base system, she does not see that, I can see using a wood fired Cook Stove she cannot, can also see living minimal AC in a well shaded home managed that until was late teens, working garage and nuke heat is not a bad option anymore.

She Demands simple yet cannot simplify what she already has, then requires so many add ons as to not be viable at all.

 

[terex herder]

DM, I don't envy your situation at all.

 

[DMiller]

Just grin and bear it, chew on my lip a lot as she makes up her mind to change it next day. Been like that since day one living together and more than once walked out awhile only to be apologized to and asked back. 38 years.
Was just as I was ceasing to do side work, she did not understand how I was managing two jobs and able to devote time for her but paid for a lot of accessories.
She will decide or I will in next couple years as she closes in on 62, she will not accept it until works it out in her own messed up head that is all good. She still does not understand this is not our ‘Forever Home’ as she was the last one to consider selling it and I do remind her of that, often.

I will likely have that Shouse set up in two years and this little farm packed off, just another investment.

 

[crane operator]

Well here we are a year later, and I'm wondering where everyone is at.

Interest rates are up, Stock market is too. Used truck prices are still crazy (with signs of dropping- I've recently seen some for sale at "reasonable" prices), new car dealership lots I drive by are full of vehicles.

Personally, we've had our busiest year ever. I opened a second location at the start of this past year. Its just a leased building and yard, and its working out. Some growing pains, but nothing too severe. My phone calls, and work load is as steady and strong as it has ever been.

I've lately run into a few contractors that are looking for work, which hasn't been the norm for the last two years.

I am looking at more equipment, and maybe a couple more employees.

I'm expecting a large increase in my insurance premium this year, they've already sent me their official letter that its going to be at least 10% up. So likely my rates are going up also.

So how's everyone else's crystal ball? Cloudy? Clear skies and fair weather?

 

[ahart]

I think if we’re looking at finance numbers at all, they say we’re headed for the biggest financial collapse in modern history. Credit card debt is insane, vehicle debt same situation. The one thing I’ll say is the more I know about this current market, the less I understand. Take rent prices for instance, median price today is pushing 2k a month, median mortgage payment is pushing 3k a month. All the while the median income sits at 75k. That math is tough. 30-50% a month going to housing? I don’t think everyone is headed for collapse but I certainly think the majority of Americans will have their instant gratification lifestyles changed in the coming future. Might be on an island by myself here but that’s what I think.

 

[CM1995]

Partly cloudy with a few bright spots of clear sky.

The commercial market is sluggish where the only real movers are gas stations, tire stores, auto parts and fast food. Typical for an economic slowdown. Even if consumers have less disposable income they still have to repair their car, put tires on it and fill it up. When you can't afford to take the family out to a sit down joint you go through a drive thru.

We are having to bid twice as much to keep the pipeline full. Currently have a small office building, commercial development with a tire store and a retail lot and fast food joint. There is a fair amount of school, community college and other gov't type projects hitting the pipeline as well. I haven't been successful in landing one of those yet. Still trying to figure out how to price one, if that makes sense.

Bought a new track hoe this year. It helped the old one was paid for and we rolled that equity into the new one. New one has full auto GPS. If the trackhoe is as efficient as our D3 full auto, I'll be very happy. We are still having a horrible time finding people who want to and know how to work. Technology is cheaper than people in some instances.

This year I would like to add a new 279D3 and a smart grader blade with GPS for final grading. This would free up the D3 and save a lowboy move when we go back to put parking lots on final grade for the curbing and paving.

Also like to add a dump truck for our use, moving the smaller iron and hire out. The state is going to start a $300M widening of I-65 in fall of '24. Construction will start in '24 and wrap up in '27. There might be some opportunity there.

I think going forward being quick and efficient is the key to success as bids continue to tighten.

As far as the housing market goes here locally it's still tight as it's ever been. Not much used inventory as most mortgages are financed at 2-3% fixed for 30 years so people are staying put. Anything new is over $200 SF and on a postage stamp beginning at $500K and going up. Surprisingly the new homes are selling at a brisk pace. I think it has to do with the 5/1 arm mortgages which is fine now however what happens in 4-5 years if the refi rate is 8-9% then? Could be a big issue down the road.

If our work load stays steady whether it be commercial, gov't or highway the wife and I would love to start our house. We'll see how that goes.

 

[ahart]

Definitely glad we built ours in 2020 before prices and interest rates went to the moon. Couldn’t do anything close to what we’ve got with todays prices that’s for sure. We hunkered down over a year ago and I don’t see changing the strategy in the near future. I still believe cash is king and those that have it will be in a better place coming out of a recession.

 

[CM1995]

Wanted to add that material prices have stabilized as well for the most part which is a good thing. RCP and HDPE pipe is relatively consistent compared to 2 years ago when it changed almost daily. Stone is going up next year per the letter I received from Vulcan.

On a down note a friend of mine works his trucks for an industrial construction company that does alot of work inside our local steel mills. Usually this time of year is their busiest time however this year they are only working 1 day between Christmas and New Years. Not a good sign for the industrial sector.

I still believe cash is king and those that have it will be in a better place coming out of a recession.

Agree. We are getting 5% on some 3, 6 and 9 month CD's which is nice. Not a lot of money but nice none the less.

 

[thepumpguysc]

This passing year has been good, and I stayed to busy to go on/plan a vacation.!!
…despite fuel inj. parts jumping 65% across the board..& some doubled and tripled.!!
If December is any indication of things to come, I’ll be standing on the corner with a “will work for food” sign.. lol
I had enough to stay busy this month and it’s been a well deserved rest period.. but I’m ready to get back at it..
I’m at my best when I have a 2-3 pump backlog..
Hope everyone had a good year.

 

[Truck Shop]

What's funny is--read back at replies from 2022 and compare to todays.

 

[Coaldust]

23 was my best year on the books, four years in. ‍♂️. My direct expenses are low and I could probably do better if I wanted to work harder.

What gets to me is the stonks market and why is it exploding? Is it time to enjoy the gains or let it ride until the train runs off the tracks? Can’t time the market, blah blah blah. Stonks always go up,…. Blah, blah blah.

Doesn’t help that I just read The Great Taking by David Webb. (Of Webb Equipment fame).

 

[mekanik]

In Canada most mortgages are for 20 or 25 years although you can get longer ones.
However every one to five years depending what you signed up for you have to renew your
mortgage at the current interest rate.
With the very low interest rates people bought homes that they probably should not have. Around 60% of Canada's mortgages were renewed between January 1st 2020 and June 30th 2022 while interest rates were very low and most with a five year term. When these mortgages come up for renewal the people will see a substantial increase in their payment. Most will go up another $1500 to $2000 a month and that is if interest rates don't go up any more in the next one to three years.

 

[CM1995]

In Canada most mortgages are for 20 or 25 years although you can get longer ones.
However every one to five years depending what you signed up for you have to renew your
mortgage at the current interest rate.
With the very low interest rates people bought homes that they probably should not have. Around 60% of Canada's mortgages were renewed between January 1st 2020 and June 30th 2022 while interest rates were very low and most with a five year term. When these mortgages come up for renewal the people will see a substantial increase in their payment. Most will go up another $1500 to $2000 a month and that is if interest rates don't go up any more in the next one to three years.

I think we've had this discussion before and I didn't know that Canada did not have fixed interest term mortgages. That's wild and scary as hell. I am not a fan of a 5/1 ARM.

 

[Welder Dave]

Canada has a choice of fixed or variable term but typically the longest time you can have before having to renew it is 5 years. I was at about 3.25% fixed for one renewal. I would have gladly took that for the full term of the mortgage. I think I was as high as about 7% on one of the renewals. I paid every 2 weeks so I think it was 18.9 years or something instead of 25 years. I did pay it off early though.