Alex Chausovsky on How BSCs Can 'Move Forward' in 2021 and Beyond
Alex Chausovsky, a senior business advisor at ITR Economics, recently gave a virtual presentation for BSCAI's CEO Leadership Institute titled "Moving Forward." While many industries are looking forward to improved economic conditions in 2021 as the pandemic subsides, Chausovsky acknowledges that building services contractors (BSCs) view this future with a mix of hope and concern as the COVID-19 crisis has brought a plethora of new business in the form of cleaning contracts to their sector. Understandably, they don't want them going away!
Chausovsky's goal is to cut through some of the dizzying economic projections and numbers to provide clear practical data and actionable advice to "improve the quality and timing of your decision making." Nearly one year into the pandemic, many bars, restaurants, and fitness facilities remain either closed or under heavy restrictions regarding interior operations, for instance. But Chausovsky displayed a map of the United States that shows, overall, "things are largely open for business."
This, in turn, means considerable cleaning opportunities for BSCs as contamination fears linger. Business operators and employers want to show they are being proactive in keeping their employees, customers, building occupants, and others as safe as possible.
Chausovsky and his ITR colleagues are especially encouraged by the direction the U.S. is moving in towards vaccinating the population against COVID-19, displaying the latest CDC data and pointing to recent reports of the Biden administration's efforts to ramp up the number of jabs in arms with an attainable goal of 200 million Americans vaccinated by the end of the second quarter. As more people are inoculated and with 25 million+ Americans already having had the virus, more confidence is sure to return to the economy, additional businesses should re-open, and a return to "normalcy" will be closer at hand.
Chausovsky is also heartened that the political scene in Washington is more aligned now with a Democrat occupying the White House and President Biden's party having narrow control of both the U.S. Senate and the House of Representatives. As such, a stimulus package in the early part of 2021 is moving closer to passage with things like individual and household stimulus checks and extended unemployment benefits that will keep the economy from faltering too bad.
Overall, Chausovsky struck a calm, reassuring "See the Forest for the Trees" tone throughout his presentation. He showed that there has not been a significant decline in disposable personal income throughout the past year even amidst the job losses and business disruptions. "The [average] U.S. consumer remains in a strong financial position to not only continue spending, but they are willing to spend," he declared.
About mid-way through his talk, Chausovsky began more narrowly focusing on sectors of interest to BSCs. Throughout 2021, he expects further downward pressure on multifamily housing markets where there have traditionally been a lot of landscaping and some cleaning opportunities. Be prepared to be more aggressive in trying to win new contracts, he advises. Meanwhile, contraction in non-residential construction such as office buildings and multi-tenant retail centers will not mean no new opportunities for BSCAI members. But they will be limited. "Recognize the headwinds are very real," Chausovsky said, pointing to the latest U.S. Architecture Billings Index data. "The downside pressure could persist into mid-2022."
Finally, Chausovsky concluded his presentation with counsel on how BSCAI members can take a look at their own data and then derive some valuable takeaways from those numbers. The most reliable figures are your monthly sales. Look at such numbers on the "1/12 rate of change" basis, comparing the latest month to the same one a year earlier. From there, he shows BSCs how to calculate at their bottom lines quarterly and annually. These numbers will be some of the clearest signs whether your business is coming out of a downturn or entering one.
Chausovsky concluded, "It's not going to be the flipping of a switch. We're not just going to smoothly go back to the way things were. It's going to be rocky. It's going to be bumpy. You're going to find some obstacles in your way. But, generally speaking, we should be able to overcome those obstacles and continue onward in the path to recovery."
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