If you’re not careful, you can become consumed by the current COVID-19 pandemic and social unrest, trying to figure out what to do. Turn on the TV, and the news is dismal—unhappy people, typically yelling and screaming at each other, with no one to lead them.
Of course, we all need to get a handle on our businesses and try to figure out where this building market is heading. But we should keep in mind that profound change is underway. This has happened before, and it led to good things.
Plaster’s Loss, Dry-Wall’s Gain
About 100 years ago, change came to wall construction. In May 1926, about 2,500 Chicago journeyman plasterers went on strike for a $2 a day wage increase. “The builders responded by switching to ‘Dry-Wall,’” says the AWCI book, “Celebrating 100 Years of Industry Growth with the Association of the Wall and Ceiling Industry.” The plasterers didn’t see it coming.
The change to wallboard came slowly, but it brought opportunities: wealth to patent holders of new inventions, such as the drywall screw; new lines of trade, such as drywall, metal framing, fireproofing, gypsum shaft walls.
“Some of us knew [in the 1960s] that we had lost the battle of trying to defeat drywall,” wrote Bill C. Carroll, former AWCI president, in his autobiography.
It wasn’t easy to change. But those who did were in for a good ride. By 1985, AWCI surveys showed that the average AWCI member company had 32 employees, generated $3.28 million in annual revenue and had been in business for 27 years. Collectively, they produced $1.68 billion in annual employment, had $3.45 billion in revenues and purchased $1.2 billion worth of building materials and supplies every year.
So much for change being a threat.
War, Debt, Growth
In 1945, after World War II had ended, many worried about the American economy. Soldiers were returning home from war and needed jobs. The public debt levels at that time were massive.
Alan Blinder, professor of economics at Princeton University and former vice chairman of the Federal Reserve, noted in The Wall Street Journal that post-WWII public debt topped 100% of GDP. Well, that debt was reduced to 22% of GDP within 28 years. Stock prices quadrupled from 1943 to 1955, says Ron Baron, CEO and portfolio manager, Baron Funds, in a recent report to shareholders.
Change brought opportunity. The US Interstate Highway System, built by President Dwight D. Eisenhower, led to the exceptional growth of McDonald’s, Burger King, Holiday Inn, Disney and thousands of roadside restaurants. Affordable air travel in the 1960s enabled companies like Hyatt Hotels and convention cities like Las Vegas to lock in extraordinary growth.
Robots Steadily Increasing
Today, change is taking place like never before. What will you make of it?
Design firms working on hospitality projects, for example, are already looking past the short-term woes of a drop in hospitality construction and are planning for the future. Hoteliers and resort managers, they say, can create new properties and repurpose existing ones to support guest well-being.
In the white paper, “The New Guest Journey,” authors at Leo A Daly, an architecture and design firm, put forth solutions to infectious diseases’ impact on travel: a “wellness concierge” who greets and screens guests on arrival at the hotel, new ways to handle air purification and the use of durable, anti-microbial and “eco-friendly products, which have the look of natural wood, stone, textile and metal.”
Yes, the remake of safe world travel is well underway.
And now, some super high-tech stuff is ready to solve workplace social distancing problems. The president of South Korea has introduced “Untact.” Untact is the idea of using machine learning, artificial intelligence and robotics so that workers can have less “contact” with their co-workers, business associates and customers.
“This in order to make individuals more efficient,” Baron says, “not to take their jobs.”
South Korea now has 774 robots for every 10,000 employees, and the proportion of robots is steadily increasing. (The United States has 217 robots per 10,000 employees, Baron says.)
“With greater human productivity, corporate profits can be higher and, as a result, employees’ wages and taxes paid could be increased without higher corporate and individual tax rates,” says Baron, who gives a nod to Elon Musk for the idea of investing in “the machine that makes the machine.”
What’s your take-away here?
Mine is that change itself is nothing to fret about. It leads to opportunity. Therefore, now is the time to enhance marketing budgets, R&D budgets and plans for prefabrication operations. Embrace what lies ahead by thinking long-term.
Mark L. Johnson writes for the wall and ceiling industry. He can be reached via linkedin.com/in/markjohnsoncommunications.
