Embrace change and move forward

On 28 January the International Monetary Fund (IMF) issued a report forecasting that world growth would fall to its lowest level since World War II, with financial markets remaining under stress and the global economy taking a sharp turn for the worse.

IMF projects a global growth to fall to just 0.5% in 2009, with real activity to contract by around 1.5% in the US, 2% in the euro area and 2.5% in Japan. Though more resilient than in previous global downturns, emerging and developing nations are also expected to suffer serious setbacks, with growth expected to slow to 6.75% in China and 5% in India.

Despite the global recession, many SC&RA member companies around the world remain in good shape and are well positioned to weather the current economic storm. A number of members have recently reported they have contracts lined up for the remainder of the year and some have even suggested they have secured work well into 2010.

Many of these same companies also have cash on hand, giving them access to some excellent deals for new and used equipment. Also easing the pain has been the overall downward trend in diesel prices since last summer.

During times like these, there is generally a flood of talented people being released into the market. Some of them may be from within our industry. Although others may come from other industries, they often offer fresh enthusiasm and insights that could provide a much needed boost.

To remain competitive during these tough times, service providers of all sorts also may agree to adjustments such as reducing fees, providing free enhancements or offering more personalized services. Regardless of the steps they take, their customers receive more for their money.

SC&RA members, however, may be among the companies asked by customers to make concessions. Determining whether to agree to less attractive terms may be among the toughest decisions some companies will have to make in the months ahead. Sometimes, the best decision may be to walk away from a deal.

In any economy there are always business opportunities. They just might not be the same ones that led to a company's success during an economic boom. A slight twist of products and services may be all that is required to make them work in a different economy.

A slowdown gives companies invaluable time to review systems and processes throughout the organisation. Time also becomes more readily available for important training that, ultimately, should result in operations that are safer and more cost-effective when the economic turnaround arrives.

James King, publisher of this magazine and others serving construction and specialized transportation worldwide, offered his unique perspective on today's economy to SC&RA's Board of Directors at our January Board & Committee Meetings. He noted that almost every government across the world has or will be announcing a stimulus package that will predominantly focus on infrastructure projects.

The Chinese had already announced a US$586 billion package, 75% of which was dedicated to the construction sector. Even Saudi Arabia has announced a $100 billion package.

King also discussed U.S. President Barack Obama's plans for a major package. On 17 February, Obama signed into law the $787 billion stimulus programme. Much of those funds will be for projects that will provide jobs for SC&RA member companies, including $46 billion for transportation projects and $20 billion in tax incentives for renewable energy and energy efficiency, which will require the construction of new power sources.

Nevertheless, the road back to economic health will be long and strewn with obstacles. SC&RA will work to help guide members during these difficult times through major meetings; this magazine and its sister publication, American Cranes & Transport; newsletters; co-operative efforts with other associations, legislators and regulators; training tools and other resources.

Like our members, we will strive to improve our operations during the downturn to ensure SC&RA emerges even stronger when the economy takes a turn in the other direction.