Issue link: http://psai.uberflip.com/i/1198719
Page 14 ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION JANUARY 8, 2020 • Business confidence is weakening overall and will negatively impact investment. Manufacturing activity has contracted for five straight months, and it is now at its lowest level since June 2009. Private manufacturing is also at a five-month low, and business capital spending declined in Q3 of 2019 after two flat quarters. On the other hand, new orders, production and shipment were up slightly in December. What this likely means is that companies are replacing what needs to be replaced but not banking on future growth at this time. • Federal government spending has been the fastest growing part of the economy for the past year or so. Deficits are ballooning but no one in Washington seems concerned. Most sources anticipate the government will continue to spend in early 2020, but as the year progresses and the political situation becomes clearer this spending/deficit/debt scenario could also become a drag on the economy. Portable Sanitation Outlook Portable sanitation will certainly be impacted by what is happening in the broader economy, particularly as it relates to business confidence, consumer confidence, and the impact of tariffs. More directly, the demand for portable sanitation is dependent upon three major economic sectors: construction, events, and agriculture. A fourth, emergency and disaster response, is situational and not easily forecast. • Construction presents a mixed bag for 2020. Depending upon the sort of construction contracts your company relies upon for business, the news may be good, sobering, or somewhere in between. As of October 31, 2019, Dodge Data and Analytics reported that total new construction starts will slip by 4% between 2019 and 2020, broken down as follows: » Commercial construction starts will drop by 6%. » Residential construction starts will drop 6%. » Manufacturing facility starts will drop by 2%. » Institutional construction starts will be fairly flat, with educational buildings and healthcare facilities growing modestly, offset by declines in construction of recreation and transportation buildings. » Only public works construction fueled by federal government spending will grow an estimated 4%. Transportation spending—especially highways—will drive this area of construction. Nonbuilding construction services including highways, bridges, tunnels, and other types of infrastructure will generate the largest portion of all construction revenue in the coming five years, though it will not be as dominant as it was between 2014 and 2019 (29% at its peak). Residential (27.2%) and commercial buildings (21.1%) will be the next largest sources of construction activity. The Economic Outlook…continued from page 11 …Continued on page 15