Global Fastener News

2010 FIN – Devers: Economic Uncertainty is the Current Problem

2010 FIN – Devers: Economic Uncertainty is the Current Problem
November 30
00:00 2013

 

November 22, 2010 FIN – Uncertainty about the economic recovery and the U.S. housing industry leads the concerns of Specialty Tools & Fasteners Distributors Association members, Robert Devers said in the annual president’s State of the Industry address.
The “Great Recession” which started in 2007, officially ended in June 2009 based on a slight improvement in gross domestic product rising slightly for the second quarter in a row ended the 18-month recession.

But Devers, executive vice president of Jacksonville, FL-based A-Jax Company, said “continued economic weakness has raised questions about the recovery’s sustainability.”
“The recovery is not being pulled along by housing, and other components of growth are still stagnant as consumers worry about credit and jobs,” Devers observed.
The gulf oil spill, Europe pulling back from expansionary efforts and the drop in the Credit Managers Index, has left management uncertain.
Third quarter 2010 GDP figures rose 2%, but economists find a full year at a 5% rate is needed to lower unemployment, Devers pointed out.
“Residential construction also continues to report job losses, albeit not as many as last year,” Devers noted.
Construction unemployment stands at 17% – down from 24% a year ago.
Since the recession began at the end of 2007 half the U.S. job losses have been in construction, he noted.
“In the past, housing has helped the economy rebound from recessions, but with limited demand in the current housing market, another industry needs to emerge as the savior and right now, it doesn’t seem like any are able to step up,” he observed.
September housing statistics improved and starts are up 4% over 2009, however permits dropped 10.9% in the past year.
According to real estate data provider Core Logic, there are 11 million U.S. homes with upside down mortgages and millions more in foreclosure.
“That’s a huge inventory of distressed homes that mist be absorbed into our economy before a sustainable housing market can begin,” Devers explained.
Construction of single family homes is down 74% from the January 2006 peak. Multi-family housing is at it’s lowest level since 1994.

Corporations are reportedly holding $1.8 trillion in cash “because they are not comfortable hiring freely and making major investments,” Devers said.
States have been slower than expected in distributing $787 billion in stimulus money.
All this leads to uncertainty for STAFDA distributors.
“Most STAFDA distributors would agree that business can show signs of improvement one month and turn stone cold the next,” Devers finds.

“A big area of uncertainty for distributors is the unforeseen impact of mergers” in power and hand tool companies and in the safety channel.
“We are also concerned with what ramifications import tariffs will have on threaded rod, nails and diamond blades, sourcing decisions, long term supplier relationships, and pricing structures have all been affected this past year,” Devers added.
“During this slow recovery period, it’s easy to feel like there isn’t much you can do to improve your business,” Devers said.

“But there are things we can do,” he said in encouraging STAFDA members to promote health programs and community activities.
Health insurance costs are the fastest-growing business cost in the U.S.
According to the American Heart Association 60% of after-tax profits, compared to 7% 30 years ago.
Devers advocates wellness programs such as smart vending machines, weight loss challenges and gym membership discounts.
Devers began a healthier lifestyle starting with a gym membership leading to 5K runs and advancing to full marathons and triathlons.
“It’s been a life changing experience and has challenged me professionally and personally,” Devers said. “I believe I’m a better manager, that I think more clearly, and lead more effectively because I’ve challenged myself to take control of my health and fitness.”

Devers also advocated working on personal and business relationships. “There are a lot of people who have been displaced, laid off or downsized by the economy. They are hurting but so are the remaining employees. Current employees are under stress to pick up new responsibilities while trying to increase their personal productivity.”
Due to “layoff stress” productivity for remaining employees can actually decrease.
“This is a time when your company should be communicating like never before in an environment of trust or you will be spending more time on exit interviews.”
Devers urged increased commitment for training, communication and personal development. “Just think how far ahead of the curve your company will be when things do turn around based on the investment you’re making in relationships right now.”

Finally, Devers encouraged employee volunteerism in their community. “In today’s trying times, don’t pull inward – stretch outward.”
A-Jax, founded 37 years ago by David Baker and Mary Anne Baker as a nut and bolt distributorship, has evolved to a stocking distributor of many STAFDA lines for MRO, OEM, commercial, construction, military, utility, power generation and transportation markets.
“For years, the owners of A-Jax have tirelessly dedicated their personal and professional lives to serving others in need,” Devers said. “It’s become a company culture at A-Jax.”
For example, the local Rotary Club Devers is president of has built playgrounds, skateboard parks, contributed to the Boys & Girls Club and sponsored a clean water project in Guatemala.
“As a leader in your company, when you create a culture of commitment to serving others, your reputation is strengthened with customers and is more respected.”  ©2010 GlobalFastenerNews.com
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

Related Links:

• Specialty Tool & Fasteners Distributors Association

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