Engineering Inc. - November/December 2008 - (Page 20)

Mastering By Samuel Greengard a Hard-Luck Economy Firms use creative strategies to survive—even thrive—in tough economic times R T Michael Mandel BusinessWeek ob Barrick has seen the boom times and the down times. He’s survived recessions and dealt with inflation. After 35 years, the president and CEO of Smith Seckman Reid, Inc. (SSR), a Nashville-based construction and engineering firm, has learned to roll with the economy—in good times and bad. “There’s no question that the engineering industry is heading into challenging times,” he says. “It is essential to have a fundamental strategy and plan in place.” about diversifying through internal expansion or acquisition? On a tactical level, it’s easy to put labor and material costs or information technology (IT) efficiency under a microscope; doing something constructive about these issues is a different matter altogether. One thing that is clear, at least over the short term, is that the nation’s economic picture is cloudy, with little or no relief in sight. During the first half of 2008, total U.S. construction fell 16 percent compared to last year. Numerous factors, such as the liquidity crisis on That’s easier said than done. At a time when economic activity is declining and projects are disappearing within many sectors, following a plan can prove daunting. Strategic decisions become more difficult: Should a firm outsource services? What he problem right now is that there’s no consensus on how the current situation is going to play out. Wall Street, rising oil prices, the growing international credit crunch, the subprime lending debacle and resulting weak housing market, have put serious pressure on an already overburdened economy. So far, the economic dip hasn’t officially been labeled a recession (usually defined as two successive quarters of negative GDP growth). But this yardstick often overlooks significant downturns. What’s worse, economic prognosticators say they don’t anticipate a spike in economic activity until well into 2009. “The problem right now is that there’s no consensus on how the current situation is going to play out,” says Michael Mandel, chief economist for BusinessWeek magazine. “A lot of unresolved questions exist.” Mandel, like many economists, is surprised by how well consumer spending has held up in the face of growing foreclosures, high energy and food prices, and growing debt. He believes the economic weakness could persist and might lead to further declines. Some sectors, such as residential and commercial development, will almost certainly lag. “Retail and office buildings are overbuilt,” says Mandel. “We’re probably not going to see any real recovery in these areas for quite a while.” On the flip side, health care and education are holding up relatively well. 20 ENGINEERING INC. NovEmbER / DECEmbER 2008

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Engineering Inc. - September/October 2008 Contents From ACEC to You News & Notes Market Watch Legislative Action Engineering Goes Back to School Winning the Talent War Mastering A Hard-Luck Economy Education Makes the Grade in Green Construction 2008 Young Professionals of the Year 2008 Fall Conference Highlights Technology Members in the News One On One

Engineering Inc. - November/December 2008

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