I just wanted to ask cabinetmakers across the country, are you seeing any more business this month? Or anymore orders coming in the next few months? I've been seeing some encouraging signs about how home prices and housing starts are stopping their slides, but also see news such as Cabinet sales decrease 35.2% in May.
Do you think the improvements in the overall economy will start getting seen by woodworkers??
We've had some increase in sales lately, but it's still much slower than last year, I think. However, our new CEO and production manager have decided that we need to produce more new designs to spur sales, and so they are keeping me busy. I don't see sales reports, and so I don't know the actual numbers, but our business took a fairly big hit last October. I've done several new chair designs (as well as floor lamps) that will be installed in our New York and London showrooms this fall. I can post pictures, once they have been launched. A lot of our cabinet makers are not nearly as busy as they would like to be, however. Real estate prices started going back up this month where I live.
Cabinets are one of the last items to be installed. If construction started today, you would not see any profit for 4 to 9 months. I would suspect that cabinet makers will be well aware of the increase of housing starts so as to prepare for the future.
I don't think we will see, for the next decade at least, housing reaching anywhere near what we had 18 months ago. Hopefully, housing will pick up a little within the next 12 months. But who knows where interest rates will be, or how many can afford extreamly high down paymnts (compared to what we saw for the last 10 years), whether or not we will have hyper inflation with all the money the gov is printing.
Sorry, but I am pretty pesimistic. Builder since 1985, saw permits drop from an annual rate of 2,300 to an annual rate of 130 in 8 months in my county. If you want to see what the economy is doing, track cardboard box manufacturing. They are the best indicator of future economic growth.
There is a slew of economic indicators both Government and internal business. Maynard is right on with the cardboard box indicator. We buy them from a local company that makes them. They are producing and selling 24% of what they did in the same quarter of 06.
While the Dow went over 9000 today which was fueled by existing home sales being up 3.6% but they are up because of low prices…short sales, banks dumping forclosed inventory.
If you think that the unemployment rate at say 10.6% in your area is a real # think again. In all actuality it is probably 5-7 percentage point higher and one of the factors in this is people that have simply given up looking for work, can't get on the claim bandwagon anymore and thye newly graduated that can't find work and are not being counted.
Sacramento city's building department is about 1/4 of what it was a couple of years ago and getting smaller. I use them as an indicator of things to come. I have seen maybe ten new homes being constructed in about 2 years. The folks who are buying short sales and foreclosed properties are mostly doing the work themselves. I, personally don't want much to do with that crowd of nickel and dimers.We have many large furniture stores closing their doors. So, the stock market goes up right now because businesses are betting the Oscrewya administration will not get the so-called health reform accomplished. This will save many thousands of small businesses. Thus, saving jobs.
The cabinet shop's are down to extremely low numbers of employees or closing their doors. I am still doing some shop work but mainly contracting now. It helps to be diversified.
We are not getting any new jobs either. Once we complete this major project we have been working on for over a year now, I see the boss drastically downsizing. I think he will layoff over half of the workers we now have. Housing permits are down to nothing around here and not looking any better into next year from what we are being told.
There are many reasons the equity markets goes up and down, but it is never the reason you hear on the news. The DOW is composed of 30 stocks, with not a homebuilder in the bunch. The "market" bottomed in March because it reached fair market value territory. The premium was sold out of the market. You have to look back to the mid 1990s to make since of it all. In 1995, the Fed started to let the money suppy outpace GDP by 2/3s. This means really cheap money. This money was used to fuel the internet bubble. Normally that much money sloshing around in the economy would cause inflation. But, as you know, outsourcing became more common, keeping a cap on labor prices. Cheap labor plus cheap money equals a hugh economy. Dwell on this: GDP for the first quarter of 1995 was $7.298 trillion. In the second quarter of 2008 it was at $14.294 trillion. Our economy doubled in just 13 years. OK. I've written a lot without making a conclusion but I got to go. I'll try to finish my humble opinion later.
the homing industry is starting to stabilize and pick up again - people buy/remodel homes = people need more cabinets and woodwork. may not be later on this evening, but it's a good sign of whats to come.
New home sales have fell through the floor but things have actually picked up in my part of the state for remodeling. This area is pretty insulated from the economy….with the two biggest employers in the area being the state prison and the Army ammunition plant that makes almost every bomb for the military (Always need prisons and bombs I guess). Plus this town is loaded with "Old Money" ...probably 50% of all the business's here have been in the same family for a couple of generations.
Granted "New" Home sales have really dropped because people are scared of what may happen…but those same people who seem to build a new house every few years are now remodeling…or buying older house's for their kids and fixing them up.
Some of the ones who are fixing up and remodeling are going all out in the cabinets and custom furniture and built In's.
From most of your comments it seems for many of you business has been focused on new home construction needs. And we all know that the days of easy mortgage credit are long past and won't be coming back any time soon. I'd expect to find almost no new construction-happens to be the case in my area as well as other parts of the country.
I think Don K's perspective is an interesting one, and easy to understand. People are staying put in the houses they currently own, and if they're still working will want to remodel and upgrade their space. That was the pattern pre-2001 before the bubble, and flipping properties as a hobby.
What's puzzling is the sense I'm getting that those of you whose business came from new construction are not refocusing on the remodeling market?
Is there a business "retooling" obstacle keeping that from happening?
As many I have had to branch out into other area, I have found the competition has increased and the jobs have decreased, I now find plumbers, electricians and other handyman types working outside their expertise to try to survive. A plumber I know will take any work he can find, he recently did a hardwood floor and crown molding installation, having had 0 experience, but he needed the cash and he had just finished a hot water tank replacement for the same customer and sold her the hardwood floor installation.
In the furniture biz in my area furniture stores are closing by the bucket load, large and small alike.
There are much fewer commission for high end custom furniture.
New homes are still being built in my area but its down some 80% from 2 years ago.
Wins have come from prior customers and networking (Rotary, Kids Soccer, Local Chamber). If you want to sell stuff you have to be proactive and look for the work (much more than in years past) as few potential customers will knock on your door or respond to your web site.
Overall its a tough year I spend a ton of time marketing and substantially less time building.
Work has come to an almost standstill around here. Unemployed workers aren't really looking for custom woodwork. I now consider myself self unemployed. If it weren't for a paid off house, my lack of debt and my not justifying my existence by buying crap I don't need on a credit card, I would be, like most, screwed. Anyone who believes that we have hit bottom and things are about to get better is living in a dream world. Look past what your being fed on the news and in national papers and educate yourself on the truth of our situation.
I understand your frustration Rhett as I hear it from some customers around the country but in July and now a week in to August, I'm seeing rays through the clouds in many sections of the country. While it may not be in custom furniture the bottom line weather you're a builder or a supplier is diversity in what you offer.
While you can't be all things to all people you can still give it your best shot!
I like the work you show on your web site. Very unique.
My cabinet business has died. It started out decent the first of the year, but it has been dead since May. My business typically slows down during the summer, but never like this. I have to keep checking my cell phone to make sure it is still working. Fall has always been my busy time for custom closets. As soon as the kids start back to school, my phone starts ringing. School starts back in Atlanta next week, so my anticipation is high.
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