By Dan Carazo

When I consider the impact of the economic downturn on the U.S. construction and electrical industries I wonder if most folks are being realistic about where we are, and what the immediate future might look like.

I am continually amazed how many folks continually look for positive economic and employment reports that announce our return to "The Good Old Days". Actually, I’m just as addicted as the next person who is waiting for the latest data announced by media outlets.

No one can blame us for seeking a glimmer of good news during tough times. And indeed many of us take note of the monthly and quarterly figures as they inform us on the current economic score. How many new houses did we build? How many new cars did consumers buy? How many previously unemployed folks became employed? Did manufactured goods increase? Or decrease?

I must admit that I take significant comfort just knowing that there are folks whose job is to analyze sales data and calculate the net comparisons month-to-month and year-to-year. And I’m sure most business owners, budget planners, and sales/marketing managers feel better as I do when we get a glowing report featuring good news. Who doesn’t like good news?  

Thing is, the vast majority of these economic indicators fail to paint an accurate picture of the actual economic landscape. Most available data reports on the micro granular level of a specific aspect of an industry or the economy. And from these many disparate bits and pieces of data economists, media pundits and politicians all attempt to determine the strength of our economy. Are we growing, or are we contracting? Have we created more new jobs than the number of newly un-employed? Of course the public, and especially business decision makers, want good news. But unfortunately at this time the best we can manage from these reports is rather tepid news. So what to do?

As a seasoned business-to-business marketing strategist I have come to the conclussion that in the case of many businesses, and especially smaller ones, waiting for increasingly good news could prove very damaging. Don’t get me wrong. I am not by nature either a pessimist, nor a skeptic. However, unless you own a pair of rose colored glasses, I maintain this is no longer the time for businesses to simply hunker down, pull the horns in on spending, cut costs, and wait for the good news that will announce The End to the Great Recession.

It is my opinion that we have witnessed a much more far-reaching resetting of the global financial/economic system that continues to create shock waves and disruptions at so many levels that it is nearly impossible to find consistent economic improvements. A few short years ago we witnessed exploding growth in residential construction. Six years later, housing prices remain weak, as does resi construction. We ask, “when will things improve?”

But what if things don’t improve? What if we have entered a new reality in which tens of millions of young Americans decide not to buy a home? What if our successful automation of America’s industrial production permanently eliminates those new jobs we expect politicians to create? What if global economic growth takes a long-term hiatus with high unemployment and stagnant growth from here to Europe?

We may look back on the period after 2005 as “The Great Malaise” – a period of economic upheaval, global financial debt, limited prospects for growth, increased levels of long-term unemployment and a scarcity of credit. Can’t happen, you say? Just look at the flat U.S. stock market performance over the past decade.   

The big question here is what’s a business manager who sells to the construction and maintenance markets to do when faced with a systemic contraction in new building projects, and a glut of housing and retail space across the country, and tightened lending? Reality tells us that political parties can't easily create demand for construction. The resulting growth in electrical and lighting sales distributors are hungry for will have to wait until we see the housing and commercial property glut ease. When will that be? And what will re-ignite the demand for more houses? What must happen to drive new housing starts north of 2.5 million units annually as we witnessed in “The Good Old Days”?

For what it’s worth, as a marketing consultant and journalist focused on this industry since 2000 I share these observations as a few ways business managers can survive until the news reports are brighter:

• Smart distributors, contractors, and consultants must “reset” their strategic business plan in order to re-evaluate traditional go-to-market strategies, examine best ways to seek new business opportunities, and consider major shifts in their business fundamentals beginning with “who will we target with our marketing and sales?”.
• Don’t wait for better economic news in order to re-evaluate your business strategy; if you haven’t already done so during this downturn, do it now! Your survival may be at stake.
• Develop a marketing growth plan based on the realities of your specific region – not based on the historical past! The world has changed in many ways; make sure your business brand is differentiated to the target audience best suited to support what you offer today.
• Craft a marketing strategy that is coupled to the strengths of your team and organization; make sure your team exhibits the skills and knowledge being sought out by strong market segments you plan to service.
• Don’t be afraid to change horses by selecting alternative vendors; if your sales are being eroded by important manufacturer vendors who remain on your line card while they have begun selling directly to your customers during the downturn it may be time to switch lines; consider other sources; smaller brands are often hungrier and will loyally support your growth plans with exceptional service.