All twisted up about how to pinpoint business opportunities for fabricating and metalworking this year? Here are the bright spots:

To determine what 2005 holds for the fabricating and metalworking business, you must examine individual sectors and what stage they’re at in their own business cycle as well as what phase the overall economy is at, advises Doug Harris, president of Oklahoma-based HE&M Saw, in a recent Fabricating & Metalworking article. He also suggests looking at the many factors that can influence both. Here are some things to pay attention to in some sectors to spot possible business opportunities for 2005:

In residential and commercial buildings, a slowdown in overall consumption is imminent as more capital is diverted to paying back debt instead of investing in capital assets, more labor and other necessities. As a result, rising interest rates will put a damper on residential housing and commercial building projects. To determine growth areas, look for places that offer less expensive labor for manufacturing and in which unions wield less influence.

Harris also recommends examining a location’s age demographics. Higher longevity suggests the longer-term use of homes by more elderly people, meaning that residential turnover will be lower for that part of the population. It could also indicate new housing needs for their children and grandchildren as well as opportunities in assisted-living facilities. While there’s usually less cheap labor in an aging population, it can offer the advantage of higher discretionary income, translating to higher demand for appliances, automobiles, consumer electronics, etc.

Additionally, it’s a good idea to watch out for local and state government programs that are designed to draw in more federal projects in order to bolster job creation and consumer awareness. Also, be mindful of locations providing business tax incentives, says Harris.

Business opportunities also exist in aerospace and defense. For example, the need for more fuel-efficient aircraft is gaining in urgency, indicating a trend toward increased standardization of aircraft components and a shift toward smaller jets. (Similarly, high gasoline prices will place more emphasis on achieving fuel efficiency in the automotive industry so pay attention to opportunities that could stem from this trend). In addition, current military efforts will entail the assembly, maintenance and upgrade of equipment. It also indicates potential new business in military facilities.

Another promising area is the oil and gas industry. Skyrocketing oil prices should stimulate drilling here in the U.S. as well as in Russia, South America and Mexico. As a result, business opportunities could arise in drilling, piping and coupling as well as other industries that serve the oil and gas industry.

Indeed, fabricating and metalworking businesses must examine individual sectors to find ways to make this year a prosperous one.

Source:

Where Do We Go From Here?
Doug Harris
Fabricating & Metalworking, December 1, 2004
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