NOVEMBER 2019 NEWSLETTER To promote, educate and advocate for the Residential Building & Remodeling Industry; providing resources that benefit industry professionals and consumers in the communities we serve. WHATS INSIDE Upcoming Event Registrations Nov 7 - Tropical Trivia Night Nov 14 - Go Kart & Bowling Event Dec 12 - Christmas Party Social Fiesta Review Membership Updates & Incentives Membership Directory Advertising Rates 2020 Annual Sponsorship Annual Sponsorship Registration New Home Starts Permit Report LRRP Lead Paint Refresher Course Workforce Development Job Posting Home Value Growth lags the nation... Could the Governors property tax relief task force help? 2020 Home Show updates International Builder Show Information November HBR Calendar Page 1
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Orphe Divounguy, Chief Economist Page 4
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Do Economic Recoveries Die of Old Age? The US economy is clearly slowing. After adjusting for inflation, GDP grew by 2.9% in 2018, and by an even better 3.1% in 19Q1. But growth slowed to just 2% in 19Q2, is expected to grow at a similar pace the rest of this year, and to then slow further in 2020. According to some pundits, this rapid slowing is a clear sign we are in the final stages of this economic recovery and that a recession is fast approaching. They point out that we are in the 11th year of this recovery, making it the longest one in history, and as such we are simply due for a recession. Fortunately, they are wrong, expansions do not die of old age. Let me explain. Prior to WWII, the idea that expansions were more likely to end as they got older was very common and was frequently mentioned in business and economics textbooks. And indeed, it was justified by the data. Using a statistical technique called survival analysis, which looks at the probability of some particular event occurring given the age of the subject, be it a person or a car or sports team, it is clear that prior to WWII recessions were more likely to happen the longer the recovery. The intuitive starting point is based on analogies to human mortality. In short, this presumption suggests that as an economic recovery ages, assorted imbalances and rigidities accumulate that hobble the economy and make it more fragile. As a result, a recovery is increasingly put at risk by smaller and smaller shocks, and it becomes increasingly likely the economic expansion will fall into recession the longer it lasts. Analogies to cars are also frequently cited. All else equal, as a car ages, the probability that it will suffer a mechanical breakdown increases. Thus, older cars are considered less reliable and generally command a lower price than new ones. Happily, however, various postwar changes in the economy have contributed to more robust and longerlived expansions! One key change has been the rise in the share of services produced in the economy and the concomitant decline in goods. This change has diminished the importance of inventory fluctuations and, as a result, has moderated the business cycle. The role of the federal government has also drastically changed. Since WWII, government activity has, among other things, increasingly focused on stabilizing the economy. In short, the government has gone from a laissez-faire hands-off attitude towards the economy to a forceful, countercyclical policy. This approach has not only prolonged business cycles but has, importantly, eliminated the pattern of cycles becoming increasingly fragile as they age. In a sharp reversal, it is now recessions that are increasingly likely to end the longer they last as policymakers take action to revive growth, such as passing tax cuts and spending increases and lowering interest rates. In closing, enjoy the current expansion. Treat it like a good friend or a fine glass of wine and savor every extra month together. While it is almost ten and a half years old, it might well last another year, two if we are lucky. Better yet, the recession that follows is not likely to be particularly deep, as there are no asset bubbles in the making, nor are the sectors of the economy that usually drive us into recession growing inappropriately quickly. Page 6
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RENEWING MEMBERS Absolute Specialty Services - 14 years Allen Roofing & Siding Company - 13 years Alton Winair Company - 2 years Ameren Illinois - 18 years Barcom Security - 2 years Belleville News-Democrat - 42 years Broadview Screen Company - 13 years CertainTeed Corporation - 7 years Chesley Fence & Deck - 34 years Christ Truck Service, Inc. - 10 years Daech and Bauer Roofing - 22 years Fulford Home Remodeling - 7 years Gillihan Concrete, Inc. - 5 years Goley Insulation - 37 years HBR Union Contractors Council - 5 years Himstedt Roofing - 16 years Huntington Chase Corp. - 15 years Kerber, Eck & Braeckel - 27 years Kitchen Craft - 14 years LF & Son Construction - 12 years Pella Windows 7 Doors - 3 years Red-E-Mix, LLC - 31 years Rollex Corporation - 9 years Ron Woods Excavating, Inc. - 13 years SLD Enterprises LLC - 3 years Springfield Electric Supply Company - 1 year Superior Home Products - 19 years Thouvenot, Wade & Moerchen, Inc. - 28 years Village of Shiloh- 5 years Wall-Vern Products - 35 years Wells Fargo Home Mortgage (2 Affiliates) - 8 years Wilke Window & Door Company - 43 years Wilson Lighting - 1 year Remodelers Council Belleville Supply Company CMI Construction Custom Marble, Inc. Drake Construction First Mid Bank & Trust Fulford Home Remodeling Light Brite Distributing Martin Glass Company Padgett Building & Remodeling Co., Inc. RP Lumber Red-E-Mix, LLC. Professional Women in Building Council BlindQuest (NEW) Custom Marble, Inc. Fulford Home Remodeling Page 11
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1237 Central Park Drive, OFallon, IL FRIDAY 28 2pm—8pm SATURDAY 29 10am—7pm SUNDAY 1 11am—4pm Interactive floorplan www.hbrmea.org/ FEB FEB MAR
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St. Clair County 2015 2016 2017 2018 2019 Madison County 2015 2016 2017 2018 2019 Monroe County 2015 2016 2017 2018 2019 YTD Jan Feb Mar 28 32 32 32 23 15 30 27 23 25 42 44 39 35 22 Apr May June July Aug Totals 38 30 38 28 25 27 40 29 29 22 34 37 37 29 20 34 39 257 27 46 286 16 22 240 21 30 227 23 21 181 YTD Jan Feb Mar Apr May June July Aug Totals 10 14 11 19 17 21 19 24 20 18 36 29 28 23 20 32 30 22 25 23 38 33 35 37 242 40 27 24 25 208 21 19 19 17 161 22 21 19 17 166 21 19 16 14 148 YTD Jan Feb Mar 12 12 6 8 5 8 8 11 9 4 8 8 10 8 6 Apr May 11 10 9 7 5 11 18 7 7 7 June 16 15 9 5 4 July Aug Totals 12 17 95 15 10 96 11 10 73 6 5 7 3 51 39 MarketGraphics provides the HBA with these permit reports. MarketGraphics offers many other housing and subdivision analysis reports. Contact them today to see how they can be of service to you directly. Page 16 O’Fallon 46 Mascoutah 35 Shiloh 32 Unincorporated 32 Lebanon 16 Belleville 7 New Baden 3 Troy 36 Edwardsville 25 Highland 27 Glen Carbon 17 Unincorporated 22 Godfrey 8 Maryville 3 Columbia 16 Waterloo 10 Unincorporated 13
The HB&R has officially formed a WorkForce Committee to inspire people to pursue careers in the skilled trades and raise awareness about the opportunities in the construction industry. If you or an employee is interested in being part of this committee please contact the HB&R office at 618.343.6331 or email tbutler@hbaswil.org What the HB&R will be doing to help build the WorkForce in our industry: • Partner with local proven programs that are in front of parents, teachers and students by creating a presentation for our members to speak at local schools about the benefits our industry offers. • Create a website based outreach for our members to post job openings and for those seeking jobs to post their resume/interest in employment. Page 17
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6100 West Main Street Maryville, IL 62062 Phone: 618-343-6331 E-mail: tbutler@hbaswil.org Web: www.hbrmea.org Page 20
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