2013 CFA Convention Theme

The Road That Lies Ahead

‘The Road That Lies Ahead’ is the theme of the CFA Annual Summer Convention this year. Hopefully you have already made your plans to attend because this year’s event promises to be the best line-up for education we have ever presented. To use Scott Smith’s words, “I don’t spend money to attend a summer meeting, I make money attending.” What he is referring to is the common message we hear from each of our attendees that you return home with enough essential information to change your business in a positive way.

While the Convention will present information to prepare you for what’s ahead you are probably wondering what really lies ahead. I’ll give you my impressions in the next few paragraphs. These are based on experience from the past 20 years as Executive Director of the CFA and from information I have read, learned, and listened to over the past year.

The first observations come from Ed Sullivan, the chief economist for the Portland Cement Association. Sullivan points to the huge backlog of residential construction that has developed during the past recession as one basis for optimism. This backlog needs to be filled and it is just waiting for a “trigger” to release the pent-up demand. He feels this will happen sometime in the second half of 2013. Sullivan predicts double-digit growth for the next two years and feels that we are positioned for continued growth for many years to come.

On the economic indicator side, the cost of housing has recently logged its largest increase in recent years. While we hate to see housing prices increase, it points to the fact that demand is greater and the inventory of repossessed or “underwater” properties has diminished to the point where new construction can begin to grow. This will impact your businesses.

Interest rates continue to be at near record lows. This won’t continue forever, in fact as the economy recovers the Fed’s – and as result the lenders, will increase mortgage rates. This will likely dampen a recovery somewhat but a mortgage at even 5% or 6% shouldn’t slow the growth much.

As always, there is another side to the picture. The biggest hindrance to growth is the lack of consumer confidence that recovery will continue. That causes people to proceed with caution. Some caution, of course, is warranted. It’s the unabashed, full speed ahead, nothing can go wrong attitude that got us in our current situation.

Those fears are based partly on lack of confidence in the government; an impression that is well founded regardless of what party is currently in power; and, the unmentionable possibility of another unforeseen event such as 911. The failure of government to bring Wall Street speculation under control (they are back at it, just with a different approach) is another possible glitch.

The need, however, is there and it is strong. Buyers can’t sit on the fence forever. All you can do is position yourself to take advantage of the growth when it occurs and you need to do it early in the recovery before all the cut-rate competition jumps back in the market. The return will probably be sporadic and it will impact different regions differently but it is coming. It is already here. Our discussions with members reflect cautious optimism. It is “measured” speed ahead.

Come to the CFA summer meeting and network with your peers. Find out what they are doing and why. See you there.

Ed Sauter, Executive Director, CFA 

esauter@cfawalls.org