Author Archives: Pierre Villere
The housing collapse’s serverity and recession escaped many forecasters. I have a wonderful expression, printed on an 8 1/2- x 11-inch glossy piece of paper, matted, framed, and hanging in my office. It says, “Success is the intelligent use of … Continue reading
Psyches must heal before housing makes a comeback. For a couple of years now, I have been telling our clients that we will see a recovery in the housing market only when housing prices stop falling. Housing starts drive most … Continue reading
Producers with strong balance sheets can secure loans. Much of this summer was a roller coaster of uncertainty for the global economy and construction materials in particular. This has added more variability to securing financing from banks. The contentious debt … Continue reading
Mergers and acquisitions have slowed with the economy, but have not entirely gone away. It has been a long time since I have written about buying and selling companies since the economy began slowing in 2007. Here is an update … Continue reading
More cash sales means stability has returned. Over the co urse of the past two issues, I have written about the promising indicators in both the multifamily and vacation home markets. Given that housing accounts for one third of the … Continue reading
The vacation home market makes an unexpected recovery. In January, I focused on multifamily housing, particularly the rental market, as an emerging bright spot in what has been a sluggish housing market for four years. Now it appears we will … Continue reading
Rental units will drive the housing recovery. LAST YEAR, I wrote about the long-awaited housing recovery and made the argument that sheer population growth will drive housing demand. We will need 1.5 million new houses per year just to keep … Continue reading
The midterm elections could mean growth for our industry. AS I WRITE THIS, our country is winding down after a heated election season, and Washington D.C. now looks like a very different place. Th e Republican Party has gained control … Continue reading
Corporate America, not housing, will lead the recovery. THE FALL conference season is in full swing, and I have been traveling the country to talk about the state of our industry in between client obligations. I get large and interested … Continue reading
AS I TRAVEL AROUND the country and talk with people across the industry, from producers to material suppliers to contractors, I have come to learn that pessimism has become pervasive. People will believe just about anything as long as it … Continue reading
There are strong signs companies are replacing inventories, just what the economy needs to recover. Back in September, I wrote that businesses were no longer reducing stockpiles as aggressively as they had been earlier in 2009, and inventory growth could … Continue reading
A new type of business strategy is taking hold on this economy. One interesting trend I have been watching during this recession has been corporate America’s renewed commitment to consolidation. Rather than buying competitors to grow, executives are executing the … Continue reading
This recovery’s strength may surprise you. The Current Great Recession, as some call it, has destroyed confidence as much as it has jobs and wealth. From our peak, inflationadjusted GDP has fallen by 3.9%. The mild downturns of 1990-91 and … Continue reading
We may experience a stronger recovery than expected. It ’s no secret that we are long-term bulls when it comes to this industry. And while the current times are the most difficult in memory, and we think the construction materials … Continue reading
We will begin a slow turn toward recovery in 2010. In revIewIng thIS year’S tCP 100, I am struck by the stability of the players and how they rank. This resilience reminds me of a recent trip my wife and … Continue reading
Construction industry unemployment has passed 19%. In FEBRUARY, I speculated on the legislation that was winding its way through Congress and the administration. That bill has ultimately become our own version of the New Deal. Dubbed the American Recovery and … Continue reading
Here are some pointers for wrestling with your bank. L ast month, I wrote about the credit market meltdown and how badly it has impacted large and small producers. But another disturbing trend we have witnessed the last six months … Continue reading
Credit is available if you look hard enough. I read something recently that speaks volumes about what has happened during this financial meltdown. AutoNation, the country’s largest chain of auto dealerships, originated nine auto loans through GMAC in December, compared … Continue reading
As a college student in the early 1970s, I marveled as the nation’s interstate highway system was being completed, less than 20 years after President Eisenhower kicked off the most ambitious highway construction project in history. In those days, my … Continue reading
The cement industry is adding capacity in a poor market. I was recently in the office of a ready-mixed concrete producer, which had been a player in what was once a red-hot housing market. “Four years ago, I drove to … Continue reading
Last month, I wrote that we could see a recovery in the construction materials industry by late 2009. But since then, the final of many shoes may have dropped from the centipede that was known as Wall Street. I wonder … Continue reading
Ready-mix operation may total less than 375 million yards in 2008. I wrote about the subprime mortgage debacle last year and what it meant for both housing and the broader construction economy. As we close the books on 2008, most … Continue reading
Several scenarios come to mind for 2009 In February, I wrote a column titled “Calm Down: No Recession.” While I am still technically correct, there is no doubt that the construction materials segment of our economy is mired in the … Continue reading
China’s thirst for cement is on producers’ lips. As we experience one of the concrete industry’s roughest downturns in memory, we continue to brace ourselves for what the Portland Cement Association says will be a reduction in cement consumption from … Continue reading
We have a great old passenger train based here in New Orleans called the Sunset Limited. In the 1950s and 60s, it was synonymous with pure luxury, ferrying its well-dressed pasengers from here to Los Angeles before air travel overtook … Continue reading
The end of the housing depression may be in sight. Ed Sullivan, the Portland Cement Association’s chief economist, turned from gloomy to negative about the outlook for housing and the economy as a whole, in his Spring Forecast. Just read … Continue reading
As concrete producers, you deal with aggregates in one form or another. But did you realize what a behemoth the aggregates industry is and how it influences our entire economy? The National Stone, Sand and Gravel Association (NSSGA) reports aggregate … Continue reading
There is a great word in the dictionary called “pluck,” or a “resourceful courage and daring in the face of difficulties; spirit.” This industry has lots of owners with pluck. I’m amazed by the stories I’ve heard. There was Victor, … Continue reading
Okay, so I have stuck my neck out and called, “No recession in 2008…” Since I wrote that last month, the generally accepted odds are 50/50 that we will slip into a recession this year. So I hope the coin … Continue reading
The concrete industry faces tough questions whenever the economic horizon is cloudy. Managers must decide on the timing for capital expenditures, how to plan staffing levels, and many smaller decisions in between. Federal Reserve Chairman Ben Bernanke … Continue reading
I recently wrote about how the housing bust has affected our industry and its prospects for 2008. I have been asked many times, “So, if the reason for this bust is the mortgage market, how will we ever dig out … Continue reading
The problem with economic downturns in the concrete industry is that the competitor down the street often doesn’t value his product or company at a fair price. Instead of looking at his business as a whole investment, this panicked producer … Continue reading
Last month, I reviewed Florida’s aggregates shortage and how it affects that state’s ability to supply the material required for the construction projects you see as you drive up and down I-95 or the Florida Turnpike. Now lets look at … Continue reading
For years now, California and Florida have led the nation in growth, and there is no doubt that these two states will be among the growth leaders for decades to come, Texas and Arizona will not be far behind. But … Continue reading
Last November, I predicted a stable year for concrete production in 2007, with total yardage “at least as strong as 2006.” At that time, I didn’t fully appreciate the impact of the spectacular flameout of the subprime mortgage industry and … Continue reading
Recruiting and training middle management personnel has challenged this industry for decades. Men and women who have grown up through the ranks often are not equipped to nurture and expand their skills beyond the disciplines they have learned in the … Continue reading
Building a giant cement plant is a lesson in perseverance. This Article Features a Quote by Pierre Villere Like other precious resources, the United States has become dependent on imported cement, and anyone wondering why only needs to study the … Continue reading
I am amazed by the number of concrete producers who have never calculated one of the most important indices in running a concrete business: How many yards do I have to produce to break even? In a year when the … Continue reading
Last month, I wrote a big-picture view of what our industry will look like in 2015 and beyond. I only touched briefly on technology, which covers everything from mixer truck-based systems to accounting software, and everything in between. “Emerging technology … Continue reading
Almost two years ago, I wrote about the trends I believe our industry will experience through 2010. Here is a fresh updated look at a dramatically changing industry, which I presented at World of Concrete in January. This view looks … Continue reading
Following the stock prices of large multi-national and smaller public domestic construction companies gives a sense of how Wall Street investors view our industry. This segment’s prices are an accurate barometer of our industry’s health. First, let me say, our … Continue reading
As many of you know, New Orleans is my hometown, and our national practice is headquartered in a suburb of the city, high and dry and away from the utter wreckage and devastation of Hurricane Katrina. As I travel the … Continue reading
This past fall, the U.S. Census Bureau announced with great fanfare that America’s population had surpassed 300 million. I found this interesting, particularly given that it squares with a little known, but an important new report from the Brookings Institute … Continue reading
Exactly one year ago, I wrote about the results of the National Ready Mixed Concrete Association Industry Data Survey, and took a close look at how the producers who rank in the top 25% of our industry compare to their … Continue reading
I remain very bullish on the ready mix industry over the next quarter century. But near-term, such as the coming year, the horizon seems very hazy. I still firmly believe that the industry will blow past 500 million cubic yards … Continue reading
I have always been fascinated with the game of chess, and played it extensively in my youth. The game has a particular affinity to those of us from New Orleans because America’s most famous chess master, Paul Morphy, was a … Continue reading
The long expected housing slowdown, predicted in this column and in other business publications has finally taken hold of the construction materials industry. This slowdown is being felt particularly by those ready mixed producers who businesses have a large residential … Continue reading
As we head toward the home stretch of 2006, it might be interesting to review some of the predictions I previously expressed. So far, I’m happy to say, it looks like I’m batting 1.000. Inflation and interest rates I am … Continue reading
I am not an economist; I am just an investment banker trying to keep my finger on the pulse of our national and global economy. And I am as confused as ever on the outlook for the rest of this … Continue reading
The Institute for Justice tells the story of Susette Kelo, who dreamed of owning a home that looked out over the water. In 1997, she purchased and lovingly restored her little pink house in the Fort Trumbull area of New … Continue reading
After determining how much your company is worth (see last month’s column), it the becomes time to ask yourself, “Is this the time to sell?” If we look at the activity in the mergers and acquisitions (M&A) side of the … Continue reading
I regularly receive phone calls or am approached at industry conferences with the same basic question: “What are ready-mixed concrete producers selling for on a production yard basis?” or “What multiples are being used in today’s market for ready-mixed producers?” … Continue reading
It’s a matter of discussion at every concrete industry meeting. Wherever producers gather, rumors about consolidation seem to capture everyone’s attention. As a principal in a consulting firm specializing in bringing buyers and sellers together, I’ve studied the effects of … Continue reading
Jay Leno loves to call attention to the general dimwittedness of the average person walking on the street with his hilarious “Jay Walking” interviews. He asks everyday people questions about current events or basic knowledge any first grader should know. … Continue reading
At a Rolling Stones concert in San Diego this past fall, fliers were being handed out offering condo buyers a new car with the purchase of a unit. This clearly marks a turn from a sellers’ market to a buyers’ … Continue reading
Last month, I wrote about the 2005 Industry Data Survey, and I talked about what a terrific tool it is. It is offered by NRMCA to its membership annually, and we think it is one of the most important and … Continue reading
The 2005 Industry Data Survey, a terrific tool offered by NRMCA to its membership, is finished and has been circulated to its participants. The survey begins with a detailed questionnaire made available to the entire Association membership every Spring, and … Continue reading
When I was a kid in the early 60s, I watched Saturday morning cartoons like most of the other kids in the neighborhood. One of my favorites was “The Jetsons.” I looked at all the technological wizardry and could only … Continue reading
There is much to consider when pondering the future of cement prices, which have increased by up to $40 a ton in some areas since prices started going up last year. You’d think this jump would more than offset the … Continue reading
Have you looked closely at your market recently? All across the country, major and secondary markets are facing rapid changes as consolidation sweeps the ready-mixed concrete construction aggregates industry. We estimate there were 3200 to 3500 companies in the ready-mixed … Continue reading
Bill Allen and I love to debate the big picture. My partner has been expressing accurate opinions about trends and values in the ready-mixed concrete industry for more than a quarter century, and I have become a true believer in … Continue reading
