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First quarter results for growth in the construction sector continue to slide as
hard hit areas such as Florida continue in a holding pattern; waiting for buyers
to narrow the surplus of homes and spark further building and more rentals of
portable restrooms. Many portable restroom operators in Florida have parked
thousands of portable toilets and are waiting for a turn around in what has
already become a longer wait than originally anticipated.
Some areas of the country are still enjoying stable business but most are taking
their share of the hit of a surplus of homes.
After a decrease of nearly 15% in home building for 2006 the new year has
yielded little hope for a quick recovery with the first two months of the year
showing a decline of nearly 26% in new home construction.
Although home building has not stopped it has slowed and that will reflect in
what some anticipate to be a flat no-growth year.
In addition to a narrowing of total business available, the number of start-ups
in the portable restroom rental business seems to be holding at a rate of three
to four a week. Related businesses such as excavating, temporary fence and
other construction related businesses look for ways to offset the declines of
business within their particular specialties.
An estimated 234 portable restroom businesses were started last year, bringing
the industry wide total to an approximate number of 4,700. This number also
includes operations running fewer than 100 units.
KB Homes, the largest homebuilder in the United States as well as France
concurred that the housing market has had a sharp downturn. In their
quarterly report, president and chief executive officer Jeffrey Mezger stated,
"Our 2007 first quarter results reflect the sharp
hard hit areas such as Florida continue in a holding pattern; waiting for buyers
to narrow the surplus of homes and spark further building and more rentals of
portable restrooms. Many portable restroom operators in Florida have parked
thousands of portable toilets and are waiting for a turn around in what has
already become a longer wait than originally anticipated.
Some areas of the country are still enjoying stable business but most are taking
their share of the hit of a surplus of homes.
After a decrease of nearly 15% in home building for 2006 the new year has
yielded little hope for a quick recovery with the first two months of the year
showing a decline of nearly 26% in new home construction.
Although home building has not stopped it has slowed and that will reflect in
what some anticipate to be a flat no-growth year.
In addition to a narrowing of total business available, the number of start-ups
in the portable restroom rental business seems to be holding at a rate of three
to four a week. Related businesses such as excavating, temporary fence and
other construction related businesses look for ways to offset the declines of
business within their particular specialties.
An estimated 234 portable restroom businesses were started last year, bringing
the industry wide total to an approximate number of 4,700. This number also
includes operations running fewer than 100 units.
KB Homes, the largest homebuilder in the United States as well as France
concurred that the housing market has had a sharp downturn. In their
quarterly report, president and chief executive officer Jeffrey Mezger stated,
"Our 2007 first quarter results reflect the sharp
downturn in the housing market that began in 2006 and that continues to pressure the sales and profit margins of
domestic homebuilders today. We entered 2007 with a backlog substantially lower than the year-earlier level and
consequently delivered fewer homes in the first quarter than in the same period of 2006. In addition, profit margins
on our 2007 first quarter deliveries were constricted due to the persistent imbalance in housing supply and demand
that is fueling intense competition and pricing pressure among homebuilders and other participants in the new home
and resale markets. We believe these conditions will likely continue for at least the remainder of 2007, ”
domestic homebuilders today. We entered 2007 with a backlog substantially lower than the year-earlier level and
consequently delivered fewer homes in the first quarter than in the same period of 2006. In addition, profit margins
on our 2007 first quarter deliveries were constricted due to the persistent imbalance in housing supply and demand
that is fueling intense competition and pricing pressure among homebuilders and other participants in the new home
and resale markets. We believe these conditions will likely continue for at least the remainder of 2007, ”
Economists agree that what is taking place is a correction that needed to happen. The magnitude of the correction
seemed to be all at once even though signs that construction was beginning to flatten already existed.
Chief executive officer of Countrywide Financial Corp., Angelo Mozilo, one of the nation’s largest home-mortgage
lenders said he expects the market to “tread water” in 2007. He also offers encouragement for those that weather
the storm, explaining that those that ride it out until 2008 will have a great year as demand rebounds, once again
spurring construction.
U.S. home prices rose an average of 58% in the five years ending Dec. 31, according to an index produced by the
Office of Federal Housing Enterprise Oversight. In some cities, prices more than doubled in that period. Over the
past year or so, house prices have declined moderately in many areas – including Massachusetts, the Washington,
D.C. area and parts of California, Florida and Arizona – but they remain far above their levels of a few years back.
McGraw-Hill Construction, a respected name in construction and forecasting reported the first construction decline
since 1991. The company reports that they expect construction values to decline 1% for 2007.
During 1991 the portable sanitation industry was clipping along at a great pace spurred by the entries of companies
such as Waste Management and Browning Ferris who made their way into the industry becoming portable
sanitation giants for a short period of time. Similar to the past few years, construction was strong and the portable
sanitation industry was growing due to demand, acceptance and increased regulations which focused on the health
and safety of the U.S. workforce.
Without notice, construction came to a fast halt and in July, 1991 portable restroom operators across the nation
who had grown to expect the biggest month of the year to produce large profits were left scratching their heads as
the orders for equipment simply ceased. The condition remained for nearly 18 months until construction once again
began to take off.
The link between home building and retail is strong, leading economist to believe that construction of retail outlets
such as small shopping centers and malls will fall in relation to home building.
On an up-note, construction of a wide range of other commercial projects such as hospitals, schools, offices,
hotels and factories will keep portable sanitation professionals somewhat busy which could be reassuring news.
Commercial construction will increase 2.5% for 2007 with the fastest growing segments being hotels,
manufacturing buildings, schools and health-care facilities.
It is further anticipated that the office-building sector will produce rental possibilities for portable sanitation
contractors as the construction industry responds to the recent job growth and business expansion.
Many states have passed bond issues to accommodate the growing school-age population. States such as Arizona
and Nevada that have attracted families into their population are proceeding with adding dozens of schools this year.
Steve McDonald, Editor of the Sanitation Journal says he expects portable restroom operators to see a flat year in
terms of overall growth, meaning that through acceptance and continued effort to push for reasonable regulations
the industry as a whole should pass through 2007 without much damage. “The industry has grown at the rate it has
partly due to construction demand but also in a large degree as a response to increased regulation and acceptance of
portable restrooms in our day to day lives.”
“We might not see companies experiencing the type of growth that has become so common during the past few
years but the timing of a decline in construction along with the maturing of the industry couldn’t be better
orchestrated if it had been planned. The Portable Sanitation Association International has made tremendous strides
in positioning the industry not only to be recognized but also accepted. The bottom line is that through the work
conducted by the association, more states and communities recognize the importance portable sanitation plays in
protecting people and the environment.”
“Our concern is that typically, during a good economy, margins rise and when the economy stumbles so do
margins. We would not like to see an over-reaction to a decline in construction lead to a decline in margins and
reverse the gains toward stability that have been made during the past few years.
seemed to be all at once even though signs that construction was beginning to flatten already existed.
Chief executive officer of Countrywide Financial Corp., Angelo Mozilo, one of the nation’s largest home-mortgage
lenders said he expects the market to “tread water” in 2007. He also offers encouragement for those that weather
the storm, explaining that those that ride it out until 2008 will have a great year as demand rebounds, once again
spurring construction.
U.S. home prices rose an average of 58% in the five years ending Dec. 31, according to an index produced by the
Office of Federal Housing Enterprise Oversight. In some cities, prices more than doubled in that period. Over the
past year or so, house prices have declined moderately in many areas – including Massachusetts, the Washington,
D.C. area and parts of California, Florida and Arizona – but they remain far above their levels of a few years back.
McGraw-Hill Construction, a respected name in construction and forecasting reported the first construction decline
since 1991. The company reports that they expect construction values to decline 1% for 2007.
During 1991 the portable sanitation industry was clipping along at a great pace spurred by the entries of companies
such as Waste Management and Browning Ferris who made their way into the industry becoming portable
sanitation giants for a short period of time. Similar to the past few years, construction was strong and the portable
sanitation industry was growing due to demand, acceptance and increased regulations which focused on the health
and safety of the U.S. workforce.
Without notice, construction came to a fast halt and in July, 1991 portable restroom operators across the nation
who had grown to expect the biggest month of the year to produce large profits were left scratching their heads as
the orders for equipment simply ceased. The condition remained for nearly 18 months until construction once again
began to take off.
The link between home building and retail is strong, leading economist to believe that construction of retail outlets
such as small shopping centers and malls will fall in relation to home building.
On an up-note, construction of a wide range of other commercial projects such as hospitals, schools, offices,
hotels and factories will keep portable sanitation professionals somewhat busy which could be reassuring news.
Commercial construction will increase 2.5% for 2007 with the fastest growing segments being hotels,
manufacturing buildings, schools and health-care facilities.
It is further anticipated that the office-building sector will produce rental possibilities for portable sanitation
contractors as the construction industry responds to the recent job growth and business expansion.
Many states have passed bond issues to accommodate the growing school-age population. States such as Arizona
and Nevada that have attracted families into their population are proceeding with adding dozens of schools this year.
Steve McDonald, Editor of the Sanitation Journal says he expects portable restroom operators to see a flat year in
terms of overall growth, meaning that through acceptance and continued effort to push for reasonable regulations
the industry as a whole should pass through 2007 without much damage. “The industry has grown at the rate it has
partly due to construction demand but also in a large degree as a response to increased regulation and acceptance of
portable restrooms in our day to day lives.”
“We might not see companies experiencing the type of growth that has become so common during the past few
years but the timing of a decline in construction along with the maturing of the industry couldn’t be better
orchestrated if it had been planned. The Portable Sanitation Association International has made tremendous strides
in positioning the industry not only to be recognized but also accepted. The bottom line is that through the work
conducted by the association, more states and communities recognize the importance portable sanitation plays in
protecting people and the environment.”
“Our concern is that typically, during a good economy, margins rise and when the economy stumbles so do
margins. We would not like to see an over-reaction to a decline in construction lead to a decline in margins and
reverse the gains toward stability that have been made during the past few years.
This is a special report provided by the Sanitation Journal. The Sanitation Journal is not in any way economics specialist and
highly recommends that prior to taking any actions in your business that experts are consulted.
highly recommends that prior to taking any actions in your business that experts are consulted.
Slow-Down in Rental Tied to Dip in
Housing Starts Tied to Dip in
Housing Starts Tied to Dip in
By Steve McDonald
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Serving the American Liquid Waste Industry Since 2002