Valves in the Construction Industry: 2019 Outlook

time: 2018-10-12
Written by Kate Kunkel

Alex Carrick, chief economist at ConstructConnect, shared many valuable insights concerning the construction market during VMA’s 2019 Market Outlook event and during an interview with VALVE Magazine.

While Carrick said there was much to love about the economy at this time, he also has concerns about several matters applicable not just to the construction industry, but also to valve manufacturers and the industries they serve.

The labor market is a serious concern in most sectors right now. The unemployment rate is just 3.9 % and the volume of job openings in the economy at 6.8 million is higher than the number of people who are unemployed. “This almost never happens,” said Carrick. “So, because the labor market is so tight, many employers worry about finding workers.”
Even for those who do have enough people, if one manufacturer can’t make enough widgets, every other plant down the line suffers production losses or slowdowns.

“Also, pay attention to the news,” Carrick warned. “If there are indications that labor is getting crotchety, there could easily be bottlenecks if certain elements of labor go out on strike. That is traditional in a tight market. Often in the past, it has been dockworkers who have seen an opportunity to slow down delivery of goods because they are asking for better working conditions or they have other demands.”

For Carrick, another big concern is inflation. “We haven’t been thinking about that at all for a long time,” he said. “But it is starting to re-appear because commodities prices are rising with tariffs.”

Carrick is against tariffs because they contribute to inflation. “You have no clue how the other side will react,” he warned. “Tariffs contribute to inefficiencies. If you’re operating inside a tariff wall, you’re more concerned about saving jobs than innovating.”