Itching for economic recovery

July 27, 2009
By: Tim Heston

Rodie Woodard just finished a good week.

When I talked with the president of Irving, Texas-based Maximum Industries Thursday, he told me he just closed a deal that will keep his contract fabrication shop humming 24 hours a day for several months. His customer in the signage industry is putting together a large advertising project for a cellular phone company.

He said that it seems companies are trying to catch what's likely to be a very gradual upswing in the economy. Although optimistic, the shop owner doesn't have immediate plans to hire additional employees.

This encapsulates where I feel the economy stands, judging by the people I've talked to and reports I've read: People are itching for an economic rebound, but they're not willing to bet the farm on one.

After so much cost cutting, companies finally are posting profits. Like Woodard, the Dow just finished a good week too. And earlier this morning the Commerce Department reported that new-home sales jumped 11 percent. According to reports, home sales are still at their lowest since 1982, but an uptick is still an uptick. Interestingly, the Midwest experienced the most dramatic uptick in June, selling 43 percent more than in May.

At Maximum Industries, Woodard is counting on more than a large signage contract to buoy business over the next few years of economic recovery. By and large the shop has focused on what it does best: cutting with four waterjets and four laser cutting systems. Down the road, Woodard is looking to expand into new, five-axis laser and even five-axis waterjet technology, expanding its capability and, ideally, its customer base.

Expanding capabilities seems to be a common thread these days for companies gearing up for the economic rebound. Last week, as reported by The Journal-Standard, Mechanical Inc., one of the nation's top 50 mechanical contracting firms, has entered the sheet metal business by purchasing the commercial division of Norstar Mechanical" of Rockford, Ill.

"Expanding a company's line of services in a down market allows more opportunities to do business by providing more services," Brian Helm, president of Mechanical Inc., told the newspaper. He added that the two companies have worked together on architectural projects for years, so "the fit to become one company was an easy transition."

Is the recession entering its final act? We can't be sure, and Woodard and others in this industry are walking the delicate tightrope of business management in a country that, experience tells us, eventually will emerge from its recession. He's got enough work to hire more now, but he won't until economic conditions show more signs of improvement. As just one example, he described one large aerospace OEM in North Texas that reportedly outsourced 75,000 hours of work last year; this year the OEM cut it to 25,000 hours. Those numbers certainly don't point to a strong economic recovery just yet.

For right now, Woodard is happy to run his lasers and waterjets full-out to finish the work he has as efficiently as he can—and judging by his success in recent years, that's pretty efficient. His 23 employees have enjoyed working in a fab shop that's had no layoffs throughout this historic recession, and Woodard would like to keep it that way.

Tim Heston

Tim Heston

Senior Editor
FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-381-1314