The Executive Panel of the Florida Building Material Association (FBMA) is a powerhouse of industry leaders who have direct knowledge of the factors that affect the construction industry from all segments. I have moderated the Executive Panel discussion at FBMA’s Gulf Atlantic Expo every year since 2011. Every panel is unique but this year's panel was, I believe, one of the most honest, straight-talking panels I have ever moderated.
The Executive Panel features national, regional, and state leaders in our industry who are asked hard questions about current topics and future projections. The leaders this year were Huttig CEO Jon Vrabely; U.S. Lumber Chairman Lawrence Newton; Woodford Plywood CEO Darin Wood; Beaver Building Products President Wade Jefferson; Durham Building Materials President Lee Morris; and Kari Hebrank, a state government lobbyist and a partner at Wilson & Associates.
There were four major takeaways from the panel discussion this year that I really did not expect. They are noteworthy for everyone in the industry.
Political chaos in Washington, D.C. It was frequently brought up that the political uncertainty in Washington is creating angst and that businesses will have to figure out how to navigate through a new normal. The initial hope of positive change with the new administration is fading fast as nothing is getting done. The political noise is taking away from the focus on government reforms that could help businesses grow.
No progress in Washington; nothing has changed. The panel’s comments on Washington’s inability to get things done, as well as the continued despair over needless regulations, prompted the question: "Has anything changed since the new administration took over in January?" Other than one comment about the new administration looking at new rules for the EPA and OSHA, the answer was clear: nothing has changed. The panel’s response matched similar answers from previous panels to government intrusions and regulations when President Obama was in power.
Brace yourself for another economic downturn. The panel was in overall agreement that short-term business will be good. However, the majority of the panel expressed concern that greed and economic bubbles could bring the country and industry back to the economic disaster of 2008. In general, the belief was that lessons had not been learned from the Great Recession and we are destined to repeat the mortgage crisis again. Although all the panelists were trying to be positive about the industry’s future, it was clear that many are seeing signs that are troubling. The message was clear; brace yourself for another economic crisis—it is likely coming again; they just don’t know when.
Supply chain disrupters and strategy. When the discussion turned to supply chain disrupters who are circumventing the traditional supply chain to sell products directly to consumers, wholesalers were far more understanding than the dealer panelists. The dealer panelists made it clear that the disrupters were considered competitors and they don’t buy from competitors. The dealers feel this is a betrayal by companies they introduced to the marketplace—not new online marketers. The wholesaler panelists questioned the marketing strategy of these chain disrupters and were pessimistic on their success. However, they were quick to point out that the supply chain is evolving and making significant changes with the advent of large online marketers. Their message is that the supply chain will have to adapt to compete, which is change they realize is coming.
No one on the panel was working on the 2006 market assumption that everything is going to be sunshine and rainbows forever. It also was very clear that Washington, D.C., is still broken and that confidence in the government improving the business environment is waning. The clearest and strongest message was that unless something changes fast, we are heading to another economic crisis.
I suspect this panel said out loud what many executives in the industry have already been thinking. Let us know your thoughts.
