Special Report: 10.15.2009

Posted by TED Magazine on Wednesday, October 14, 2009

THOUGHTS ON THE STIMULUS -- FROM THREE EVENTS

Happiness at Gridweek, NECA & PlugIn2009. Why?

By Joe Salimando 

Lots of times, after you attend an industry event (meeting, trade show, conference, etc.) -- something sticks. It's in your brain, buzzing around, perhaps for weeks afterward. It could be words from a speaker, or something you saw in a booth, or a hallway conversation. For me, the OPTIMISM and overall happiness I saw at three recent events I attended seems indelible.

Hey, the economy is awful and unemployment is at 17%, more or less, if you count it the right way. The electrical construction industry is in the doldrums. How could people at GridWeek (Sept. 21-24), the NECA convention & show (Sept. 12-15), and the PlugIn2009 event (in early August) have been so . . . well, so darn happy?

After chewing this over, I've come up with an answer: GOVERNMENT MONEY is what the three markets have in common.

Raining Down Billions & Billions

All three markets will benefit, or already are benefiting, from government support.

GridWeek is about The Smart Grid. TSG is suddenly "hot," getting billions of stimulus cash. This is the first time TSG has obtained such largess; it was unlikely to be provided, without government assistance, from the nation's utilities. One obvious result is that attendance at GridWeek was double that of 2008 (and 4x what the first event, in '07, saw). Hey, everybody was smiling at this thing. I had numerous speakers use the word "Exciting" or one of its close cousins.

[For coverage of GridWeek events, go to the September SPECIAL REPORT roundup  and see the posts from Day One, Day Two, and Day Three. There's a summary/roundup post  (put up here a few days later), too.

Plugin2009 was about electric vehicles, generically referenced as PEVs. PEVs already benefit from federal tax subsidies (buy one, get a big tax break) . . . but they are slated to be a lot more expensive. Additionally, TSG efforts will eventually help the PEV movement (TSG is necessary to make widespread PEV use possible in any given geographic area). What's more, General Motors is still alive thanks in large part to government support -- and GM will (company execs said at the event) come out with PEV models in 2010, "on time." Take away the government money, you eliminate GM's efforts. Before you poo-pooh that, remember; GM still, in its currently enfeebled state, has a 26% market share.

[For coverage of PlugIn2009, see the 8/20 and 8/26 posts in the August SPECIAL REPORT roundup]

Of course, all of the above might/might not be true, but the prime event of relevance in the electrical biz was NECA.

 

NECA Contractors & Federal Bucks

I know a little bit about NECA contractors, although characterizing the owners & execs who run 4,000 companies as any one thing is pure folly. Note that attendance by NECA members at Seattle 2009 was up significantly from Seattle 2000 (and 2000 was a boom year in electrical construction). At almost the same time, the CEDIA Expo was held; attendance there was down 12% from the 2008 event.

I looked into the eyes of the men (most were men) at this 2009 show and saw . . . optimism. That could have taken me to a serious case of cognitive dissonance. After all, isn't 2010 going to be a rotten year for most of construction? And aren't electrical contractors on the tail end of the construction industry, time-wise, and thus likely to suffer into 2011 (and even 2012) . . .?

How could these guys be so happy?

Well, let's put 2 + 2 together. Federal stimulus spending is flowing in all directions, creating a lot of work of all kinds (including propping up state governments, let's not forget). Some of it is GREEN.

First of all, Davis-Bacon is still the rule on federally funded construction. This "prevailing wage" requirement favors union construction contractors of all stripes. It's a long discussion, but it's still there and it still obtains. Remember: NECA contractors ARE union electrical contractors.

Now, I don't think all NECA contractors get the bulk of their business from federal, state, and local governments; but many get some of their sales that way. What's more, all construction is LOCAL. While stimulus dollars have been earmarked, not a lot of them have flowed out of Washington so far. Much of the work that the stim $$$ will fund is coming, not gone; that includes green and energy efficiency work.

[Green matters. In a Special Report two-part blog posting -- here  and here  -- a few days ago, it was noted that 15% of the work in the Northwest of Rosendin, one of the nation's largest electrical contractors, was in wind energy work. That's a lot of bucks!]

TO SUM UP: Many of these people were acting happy because they have reason to be! Construction may have fallen off a cliff in 2009, and it might have trouble getting up in 2010 and even 2011 . . . but the situation of the company that each of these NECA-show attendees cared most about just wasn't dire.

THAT, I think, is what was really happening.

[To see four reports from NECA's convention and show, including some awful pictures (and a few good ones) I took, see the September SPECIAL REPORT roundup , and look for the 9/13, 9/14, 9/15, and 9/16 posts.]

 

Money Creates Optimism (doesn't it?)

Frankly, I have been skeptical of how much good the stimulus would do -- for the U.S. economy, at least, and the world's as well. The economic disaster of 2007-2009 has reportedly removed $50 trillion, more or less, from global hands. It just vanished! The stimulus efforts of the U.S. government, in combination with those of other national governments, and the money-printing work of all of the central banks -- added, even, to the global stock-market recoveries -- just does not add up to nearly enough.

[It is, literally, a case of all of the king's horses and all of the king's men not being able to put Humpty Dumpty back together again!]

It is more than possible that I am going to be "right" about this. The economic depression may yet return. And it may come back with fangs and claws bared. Further, the global economic system (at this point) is so fragile that, if there is yet another blow to come, it might do significantly more damage.

But I could easily be wrong. Those are the possibilities; this column is about Realities that I saw as a reporter at three events. And the reality that I saw reflected at GridWeek, at PlugIn2009, and at NECA wore a happy face! The stimulus might not add up to much globally, or nationally -- but for the electrical industry, and specifically for the people who came to these events, there were big reasons for optimism.

And perhaps, for now, that's enough to make at least some of the rest of us happier, and most optimistic!