2015 Canadian Construction Overview Graphic


Walls and Ceilings: Does the Future Belong to Gardeners?

0 95 Economic

by Alex Carrick

While this article, with its two accompanying graphs, is directed towards the providers of walls and ceilings, there is a broader issue to be considered concerning construction's 'footprint'.
Walls and Ceilings: Does the Future Belong to Gardeners?

(With respect to the historical-pricing Graphs 1 and 2, gypsum is a key ingredient in both wall boards and ceiling tiles. Insulation material is an often closely aligned material.)

Construction forecasts are traditionally tied to key variables such as growth in gross domestic product (GDP) and population change. For the U.S., the latter ranges from +0.7% to +0.8%, while in Canada it is a little higher at +1.1% to +1.2%.

There are also expected levels of construction that depend on world demand for resources. This is especially true in Canada, although the U.S. economy has been experiencing a surge in energy-related investment over the past several years. Oil's 50% plunge in price may bring that to a halt.

The current cyclical improvement in the U.S. economy overall, however, with its positive implications for Canada as well, assure that there will be improved construction activity levels.

At the same time, though, there is also a broader issue to explore. There is a way in which the outlooks for all companies engaged in exterior construction work such as digging excavations, erecting frameworks and providing curtain walls and glazing, and for those providing interior finishes such as plumbing and lighting fixtures, as well as walls and ceilings, will see their markets affected by an unprecedented paradigm shift.

For an owner contemplating an investment in a physical structure, with attendant square-footage, there is a question to be considered at the outset − "Is there an Internet alternative?

Among structure types, there are some categories for which the answer, upon initial consideration, seems to be in the negative.

For example, in residential construction, one can count on the fact that people need to live somewhere.

Except that in the wake of the credit crisis, and in the aftermath of mortgage-foreclosure purgatory for many families, the decision has often been to opt out of ownership in favor of renting.

The square footage per unit of such rental/condo quarters is smaller than for a house in the suburbs.

What about medical facilities? When a patient becomes seriously ill, he or she – with the backing of family and friends − will continue to want the kind of specialized care that can only be provided in a hospital.

But at earlier stages of distress, there are changes in the way health care is being delivered.

Relatively minor disorders are increasingly being diagnosed remotely, with the transfer of medical records and even consultations carried out digitally.

Education? From kindergarten to grade 12, the need for physical structures (e.g., school facilities) appears secure.

At the level of higher education, however, more degrees are being earned online, implying less time spent on campus by students and their teachers.

The benefits for many young adults of attending a university or college are also being diminished by outrageous social behavior on the part of some of their colleagues and by the depths of debt required to finance the higher-education years.

Online courses, often featuring the well-honed lecturing skills of the finest professors, can provide a less expensive recourse.

Hotel and motels? This is a sector undergoing radical change. Many travelers still want to stay in well-known 'chains' that deliver a reliable quality of accommodation services.

But the sharing economy, with rapidly growing start-up firms such as 'Airbnb', are providing lower-cost acceptable alternatives, especially for executives and others in need of a place to stay for a period of time that is greater than overnight but falls short of warranting an apartment lease.

Why didn't this article begin with the most widely discussed example of all, the 'bricks and mortar' versus on-line sales conundrum faced by shopkeepers? It's a subject that's been saved for last because it offers the tastiest morsels.

Substantial retail space formerly devoted to the selling of books, provision of music, renting of videos and booking of vacations has now been supplanted by firms carrying out those transactions over the Internet.

Other retailers, feeling kinship with the Captain of the Titanic, have long known this would be only the 'tip of the iceberg'. The trend towards Internet sales has extended so far now that even those pushing the latest electronic gadgetry are falling victim. Radio Shack in America has 'cried uncle'. Future Shop outlets in Canada are being shuttered by its owner, Best Buy.

Estimates of the share of electronic hardware sales conducted online, compared with total, run as high as 33%.

Banking executive know that their retail branches, which lease cornerstone ground-level space in many malls and office buildings, will be among the next to feel the heat. Besides PayPal, several of the other new tech giants (e.g., Amazon) are delving deeper into providing financial services.

As counterweigh to the foregoing, it should also be added that there are new bastions of extra physical space requirements.

In high-rise residential complexes, and in showcase office buildings across the U.S. and Canada, outsized lobbies are 'the rage'. A large impressive interior space upon first entering a building can be a selling feature.

Multi-story heights also present an opportunity for the newest trend in wall construction that embraces an environmental appreciation message. In corporate headquarters, there are now numerous examples of living walls, also known as green walls or vertical gardens.

These are walls with pictures or interesting patterns created by means of the artistic and deliberate placement of various plant species with different hues.

A straightforward Google search of 'living walls' yields numerous stunning examples. Microsoft offers such a delight for its employees in Redmond, Washington.

Living walls are part of a design trend whereby more projects, especially of the mixed-use variety, are incorporating rooftop gardens above and landscape architecture throughout and at ground level.

One might easily conclude that the future belongs to gardeners.

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