We’re hearing that there are signs the recession is winding down and the economy may be on the way to recovery.
But what about small local businesses?
One out of two U.S. small business owners may expect increased sales in the next six months, but rising non-labor costs threaten to squeeze profits, resulting in owners jacking up selling prices to preserve some sort of a profit margin, according to a PNC Bank Economic Outlook survey.
The findings of the biannual survey, which began in 2003, show owners’ expectations for sales and profits have rebounded from setbacks last year, along with brighter hiring expectations.
Sixty-four percent of owners surveyed foresee higher non-labor costs.
On the construction front, confidence among U.S. homebuilders languished in February, reflecting a still-depressed housing market, according to the National Association of Home Builders/Wells Fargo sentiment index, which registered a reading of 16 for the fourth consecutive month.
Readings below 50 mean more of the respondents said conditions were poor.
Accurately reflecting the NAHB report, Matt Laffredo of JT Laffredo Building & Design in King of Prussia admitted he was pessimistic about news of a rosier economy in early bloom.
“I don’t see the economy as any better or getting better in the foreseeable future,” he said.
“I have a solid knowledge of basic economics and I think things will get worse, actually. The numbers they’re putting out there are all a political spin by whoever is in charge trying to get themselves re-elected. The price of gas is way up, and a lot of guys in construction get killed on that. There’s the cost of materials. And everything has to be shipped, and that keeps going up too.”
Matt noted that his brother, Jake Lafreddo, who runs the company, had been frustrated with homeowners not paying for the work completed, so instead he’s been actively going after more municipal construction jobs.
But even then, the profit margin can be practically non-existent, the Bridgeport native pointed out.
”A lot of contractors bid the job down to the lowest dollar just to keep their guys working, but there’s very little profit in it because everybody is doing it. Unless you have very little overhead and all your equipment is paid for, you don’t make much money at all.”
JT Laffredo has employed up to 30 at one time, but these days keeping five to seven men working can be challenging.
“Whenever the company seems ready to fold up, we get a job that keeps us afloat,” Matt said.
Though new commercial construction was at a 50-year low in 2010, McGraw-Hill Construction, publisher of construction industry information, indicated that building in 2011 would be in the areas of storage, warehouses, offices and hotels.
The latter was expected to grow more than 8 percent when compared to the total, which bears out the miniature hotel boom under way in King of Prussia. Before the end of the year, the town will have more than 400 new rooms to put smiles on the faces of the tourism gurus, with the area debuts of Hyatt Place, Spring Hill Suites and Hotel Sierra.
LodgeWorks L.P. chose King of Prussia for the Pennsylvania launch of its Hotel Sierra brand, described as “upscale lifestyle suites,” by Vice President of Development Mike Daood.
“We’ll be very upscale in our furnishings with a sophisticated design palette — a pretty nice choice for anybody considering that kind of alternative in the King of Prussia market,” Daood noted by phone from his Connecticut office.
Based in Witchita, Kan., LodgeWorks L.P., also operates the hotel brands Hilton Garden Inn, Hawthorn Suites, Aloft, Hyatt Summerfield Suites and its most recent acquisition, AVIA.
Though the King of Prussia address at 240 Mall Boulevard will be its first in the state, there are more than a dozen Hotel Sierras sprinkled throughout the East and West coasts.
“We look for a number of different factors with our Sierra brand, mainly corporate demand,” Daood said. “King of Prussia is fortunate to have a number of corporations. Second is strength of the market, and we have found that the King of Prussia market has held up pretty well even through the recession. We’re pretty excited about the location and look forward to an opening in late summer.”
Source: http://mainlinemedianews.com
But what about small local businesses?
One out of two U.S. small business owners may expect increased sales in the next six months, but rising non-labor costs threaten to squeeze profits, resulting in owners jacking up selling prices to preserve some sort of a profit margin, according to a PNC Bank Economic Outlook survey.
The findings of the biannual survey, which began in 2003, show owners’ expectations for sales and profits have rebounded from setbacks last year, along with brighter hiring expectations.
Sixty-four percent of owners surveyed foresee higher non-labor costs.
On the construction front, confidence among U.S. homebuilders languished in February, reflecting a still-depressed housing market, according to the National Association of Home Builders/Wells Fargo sentiment index, which registered a reading of 16 for the fourth consecutive month.
Readings below 50 mean more of the respondents said conditions were poor.
Accurately reflecting the NAHB report, Matt Laffredo of JT Laffredo Building & Design in King of Prussia admitted he was pessimistic about news of a rosier economy in early bloom.
“I don’t see the economy as any better or getting better in the foreseeable future,” he said.
“I have a solid knowledge of basic economics and I think things will get worse, actually. The numbers they’re putting out there are all a political spin by whoever is in charge trying to get themselves re-elected. The price of gas is way up, and a lot of guys in construction get killed on that. There’s the cost of materials. And everything has to be shipped, and that keeps going up too.”
Matt noted that his brother, Jake Lafreddo, who runs the company, had been frustrated with homeowners not paying for the work completed, so instead he’s been actively going after more municipal construction jobs.
But even then, the profit margin can be practically non-existent, the Bridgeport native pointed out.
”A lot of contractors bid the job down to the lowest dollar just to keep their guys working, but there’s very little profit in it because everybody is doing it. Unless you have very little overhead and all your equipment is paid for, you don’t make much money at all.”
JT Laffredo has employed up to 30 at one time, but these days keeping five to seven men working can be challenging.
“Whenever the company seems ready to fold up, we get a job that keeps us afloat,” Matt said.
Though new commercial construction was at a 50-year low in 2010, McGraw-Hill Construction, publisher of construction industry information, indicated that building in 2011 would be in the areas of storage, warehouses, offices and hotels.
The latter was expected to grow more than 8 percent when compared to the total, which bears out the miniature hotel boom under way in King of Prussia. Before the end of the year, the town will have more than 400 new rooms to put smiles on the faces of the tourism gurus, with the area debuts of Hyatt Place, Spring Hill Suites and Hotel Sierra.
LodgeWorks L.P. chose King of Prussia for the Pennsylvania launch of its Hotel Sierra brand, described as “upscale lifestyle suites,” by Vice President of Development Mike Daood.
“We’ll be very upscale in our furnishings with a sophisticated design palette — a pretty nice choice for anybody considering that kind of alternative in the King of Prussia market,” Daood noted by phone from his Connecticut office.
Based in Witchita, Kan., LodgeWorks L.P., also operates the hotel brands Hilton Garden Inn, Hawthorn Suites, Aloft, Hyatt Summerfield Suites and its most recent acquisition, AVIA.
Though the King of Prussia address at 240 Mall Boulevard will be its first in the state, there are more than a dozen Hotel Sierras sprinkled throughout the East and West coasts.
“We look for a number of different factors with our Sierra brand, mainly corporate demand,” Daood said. “King of Prussia is fortunate to have a number of corporations. Second is strength of the market, and we have found that the King of Prussia market has held up pretty well even through the recession. We’re pretty excited about the location and look forward to an opening in late summer.”
Source: http://mainlinemedianews.com
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