New Resource

Are we headed for the second portion of a double dip recession? Although
many builders, developers and others in our industry optimistically promote
the idea of slight economic recovery, there is still strong sentiment that
our economy may be facing a second down turn. Factors such as unemployment
and sluggish growth dampen any optimism.

The following article from the U.S Chamber of Commerce makes a strong case that we are not out of the woods yet.

By Ross Edwards

For those of us in the construction business these words are ringing more true with each passing day. As more and more companies go out of business or lay off more people the hope of short term pain is becoming a fading dream. Most people attribute the” Innovate or Die” quote to: Damon Darlin in a 1997 article: innovate or die on the Net (1996) By CNET News.com Staff

The following is a summary from the AIA construction forecast for 2010:

Construction Volume by Sector:

• Retail: -28% in 2009, -12.6% in 2010
• Hotels: -25.8% in 2009, -16.8% in 2010
• Office buildings: -21.5% in 2009, -17.3% in 2010
• Education: -8.2% in 2009, -0.7% in 2010
• Healthcare: -1.5% in 2009, -0.8% in 2010

If your company has been doing work primarily in Retail, Hotels, and Office Buildings clearly the term Innovate or Die has taken on new meaning. The question is what does this mean for a Construction or Real Estate professional who has been doing this work for 20 or more years? Most people assume the market for these sectors will come back in the next few years. How long will it take for you to innovate into a new area? By the time you get there will your current expertise come back in vogue. Clearly the companies that have made their money and have established relationships in the Education and Healthcare areas are much better positioned than the players in the other areas.

The question then is where is the future of our business going? How long will the current malaise last? And finally, where will the money be for the next 2-5 years and how do we take advantage of that.

Over the next few blog articles we are going to focus on a few ways we are trying to Innovate at New Resource – stay tuned.

According to an article published yesterday in the London Financial Times, spot iron ore is closing in on $100 a ton.  An excerpt of the article is below:

By Javier Blas in London

Published: July 22 2009 20:04 | Last updated: July 22 2009 20:04

Spot iron ore prices are fast approaching $100 a tonne, well above the
levels at which miners and steelmakers in Japan, South Korea and Europe
have struck supply deals, as demand outside China recovers.

The surge in spot prices has spurred several banks to forecast that
benchmark - annually negotiated - prices will rise next year, reversing
their previous expectations of a fall in prices. “The market is going
up, up and up,” said one London-based iron ore broker.

Spot ore prices in China rose this week to $93 a tonne - including
freight - and industry observers said the market could hit a year high
above $100 a tonne in the near term. The surge is a remarkable rebound
from April’s low of $58 a tonne.

Christopher LaFemina, mining analyst with Barclays Capital in London,
forecast a 5 per cent increase in 2010-11, to be followed by another 10
per cent rise the following year.