New Building Product Industry Report Points To A Flat 2012

How You Can Make Big Changes Despite Small Changes Ahead 

So what should building products marketers do during 2012 to weather the flat forecast? Spend! And BusinessWeek agrees. Research from the 1981–82 recession showed that companies that increased advertising during the downturn saw a 250% increase in sales just a few years later.

Historical patterns show that companies increasing advertising spend during downturns often surpass their competitors. For instance, Kellogg’s doubled its advertising budget during the Great Depression, which significantly boosted its market share. These examples highlight the potential advantages for building products marketers when investing in advertising even during economic uncertainties.

It appears that 2012 won’t feel much different from 2011 for the building product industry, but that shouldn’t mean another year of waiting. The report conducted by McGraw-Hill suggests 2012 construction starts will be $412 billion—that after a 4% decline in 2011 to approximately $410 billion.

Economic Context of 2012 Forecast

The broader economic landscape of 2012 was shaped by gradual recovery from the 2008 financial crisis. Stimulus measures introduced by the government aimed to revive the housing market, though challenges remained.

Policies to promote lending and homeownership were strategically implemented, but slow job growth and cautious consumer spending continued to impact recovery. Understanding these economic factors helps frame the construction starts prediction as part of a slow economic rebound.

Some of the report’s highlights for the coming year:

• A moderate 10% increase in construction dollars and a 7% increase in units (435,000)
• An excess supply of homes due to foreclosures continues to depress the market
• For multifamily housing, look for an 18% increase in dollars and 17% in units, continuing a modest an upward trend
• Commercial building is anticipated to grow 8%
• The downturn in institution building continues with a 2% decrease
• Manufacturing buildings should increase 4%, adding to the 35% gain in 2011, thanks to a weakened U.S. dollar and increased exports

While certainly not the best news we could get, after years of witnessing steady—if not dramatic— decline, even a hint of stability or that “the worst is behind us” is welcome. And for those across the building products industry working with compressed 2012 budgets, anticipating at least levelized sales is an important step.

Some suggestions to maximize your brand awareness with a minimized budget:

1. Strengthen “Social Marketing”—Customer engagement efforts have the ability to build awareness and buzz around your brand like no other marketing tool. Thanks to sites like Facebook, you can turn your customers into your greatest advocate.
   

   Impact of Social Media in the Building Products Industry

   Social media platforms like LinkedIn and Instagram have become effective tools for brand engagement in the building products sector. With increasing user interaction, these platforms help companies showcase new products and engage directly with customers.

   In 2012, social media usage grew significantly, providing marketers with cost-effective means to enhance visibility and build a loyal customer base.

2. Boost Your Search Marketing— Search Engines are vastly becoming the means by which people find goods and services they need, as well as recommendations and reviews. Pay-per-click (PPC) ads can definitely provide an ROI for leads.
3. Go Viral — A video is at least 50 times more likely to show up on the first page of a Google results than text only. It doesn’t have to be a Hollywood production to be worth viewing. Keeping it relevant and engaging is the real key.

Rather than looking at a flat year as another weak one, take advantage of the stability it’s likely to provide, shoring up the weak points the past few years have highlighted in your marketing and pushing your brands ahead while your competitors continue to keep their heads down.

Sources 

• To purchase the entire study go to Dodge 2012 Construction Outlook

Additional Articles

• Building Product Marketing Icons – Old vs. New
• Best Cities for Seniors Survey Shows Building Products Opportunities
• IBM CMO Study Provides Insight into Building Products Industry