Congratulations on getting through another challenging year. You’re rocking it! The very fact that you are reading this proves you are one of the few who is proactive in how you run your business. You aspire to be Master of the Universe…at least as far as your business is concerned! Read on as we discuss where we are and where we think the market is going.
Covid, Supply Chain Issues, Personnel issues, Consolidation, Inflation, and more all will have an impact on how we do business and how we work in the “New Normal.” How will 2024 unfold you might be wondering? Good Question. Let’s see if we can help answer that.
At DEC International we’ve been watching the tea leaves for more than 40 years. We’ve seen just about everything you can think of from recessions to terrorism, from oversupply to undersupply, and a great deal more. The one constant throughout the years is that some companies do better than others, year after year. You have to ask yourself the question…Why?
DEC is in the business of uncovering opportunities and aiding our clients with easy-to-use analytics and the best raw and refined information in the business. We reliably help you figure out how to position your company for the ups and downs yesterday, today and tomorrow. Hindsight is always way too late. While And no one has 20-20 vision when prognosticating about the future, reacting after the dam has already been breached never ends well. It is so much easier to see what’s coming when you actively take the time to evaluate where your company is relative to the market on a regular basis. We can help you, as we have hundreds of other companies. Make no mistake about it, whether you are a one-man show or a multi-national, you have to understand the market you are in and react accordingly. Coasting is not an option. Change is inevitable and must be accommodated in your thinking.
2024 will see at least a partial reduction in supply chain issues. Next year will still likely be plagued with continued inflation except for energy costs which we believe will abate in the first half of 2024. This likely means that interest rates will likely continue to rise and need to be factored in. Rising interest rates are normally a bad thing. But, with individual savings up and significant housing shifts, we don’t expect a significant reduction in housing production next year. Third-quarter new Single Family was down 10% year over year and down 17% comparing year to date last year vs. this year. We see the average cost of housing continuing to rise, putting a squeeze on entry-level houses forcing more young people into non-traditional housing that many are trying to escape.
Multi-family and commercial should be relatively insensitive to modest to moderate interest rate increases. Atlanta in particular will see more in-migration than in a normal year. One of the trends of the last decade-plus is a reduction in the formation of households. This is both a societal and monetary issue that manifests itself in doubling and tripling up in shared housing situations. We believe that there is a forthcoming change in this dichotomy and expect the demand for for-sale housing to expand to accommodate more individuals transitioning from living in group situations and who wish to build an estate. Higher incomes, maturity, and other factors will likely foreshadow this societal change. This is a major opportunity for the prepared.
Non-Single-Family Construction was nearly flat for the first 9 months this year as compared to last year with $8.720 billion in 2020 and $8.702 billion for this year. Remarkably high numbers in general.
Land availability will be the wildcard going forward. Land entitlements, government regulations, inflation, financing and more will see more and more specialization in land acquisition and development. Create relationships with entities that buy, hold, and develop land. We expect local governments to continue expanding along with education, distribution, and healthcare, all good markets to align yourself in.
We are advising our clients to diversify to take advantage of market trends as they develop. Information is key to staying on top of market trends. Certain DEC products are leading indicators of both growth velocity and the breadth of that market. Interpreting what you see becomes easier when you read and analyze data consistently. Make sure your decision support tools are up to the task, too few companies have the technology that is absolutely required to help make good choices.
Any DEC client has access to both the data and analysis as well as access to our research arm for specific assignments. Talk to your representative today for answers to your questions. Let us be your Dutch Uncle!
Reading the tea leaves is our business. Staying informed is yours. Let us help you make 2024 a great year regardless of which way the market trends. Keep in mind the basic law of macroeconomics and our belief “What’s true of the whole is not necessarily true of the specific.” This of course means, any one company can beat the trend. Make sure you are one of those great companies!
Regards and Happy Holidays!
– The Staff and Management of DEC International
DEC International is a database publisher that collects information for businesses and organizations that are targeting B2B selling or the Georgia construction market.