Welcome to the first edition of The Punch List, the Monthend newsletter! In upcoming issues we will be bringing you news from the building industry, strategies for small business owners, accounting tips from our in-house Buildertrend and QBO experts, and profiles on builders from around the country.
At Monthend, we like to think we're more than your typical accounting firm. We're different due to the clients we serve. To stay at the highest level, it's critical for us to look beyond the limits of the accounting world so we can keep stride with you all. That's why we created The Punch List.
And with that, let's get into it.
Watch: Budgets and Targets for Builders, Remodelers, and Commercial Contractors with Chris Anderson
- Every organization needs a plan. It doesn't need to be rocket science, just a well-informed prediction.
- The plan should serve as a target not just for your bottom line, but for all your revenue, costs, and overhead.
- You can't manage what you don't measure. Building a plan helps understand, in real time, the areas you need to improve before it's too late.
Chris will be hosting a live webinar in mid-March on forecasting and planning. Click the button below to reserve your spot!
Tax, Finance, and Building News
- You need this write-off! Eighteen states have now enacted workarounds for the SALT cap. This will allow certain pass-through business owners to bypass the current write-off limits.
- 3D printing has found its way into the homebuilding industry. Is this the future, or a Silicon Valley pipe dream?
- The 2022 Tax Season is upon us. Though the IRS is attempting solutions for the persistent backlogs and inefficiency, it doesn't seem like too much is going to change.
- The Fed hinted they'll be increasing the federal funds rate, likely in March. Learn what this means for the housing market.
Reframing Problems as Opportunities
In case you're living under a rock, The single-family housing market is still going off. In January 2022, the NAHB/Wells Fargo Housing Market Index (HMI) remained high, only dropping one point from its 2021 high water mark set in February. A one point loss may actually be a good thing, cooling the market and making it slightly easier for builders to fulfill commitments. With a couple-percent gain in interest rates and some supply chain improvements, hopefully the frantic market of the Pandemic will recede.
The Housing Market Index is a monthly report, based off a survey of NAHB members, and is designed to measure current market conditions.
The Not-So-Great Resignation
The number of people leaving their jobs is still trending upward as the "Great Resignation" continues.
The Great Resignation could be reframed as an opportunity to attract people to the homebuilding trades. Within the right organization, homebuilding trades are highly rewarding, offering a slew of advantages over other types of work, including better pay, according to a recent NAHB report.
The homebuilding industry needs to be promoted as an alternative to the often stale and intangible world of many other career paths, the ones people are leaving in droves. We need to take an active approach to changing the perception of the homebuilding trades. This will take a continued approach not only from large organizations like NAHB and HBI, but also from regional HBA's, and companies like yours and ours.
Could Foreign Workers be the Answer to the Trade Labor Shortage?
Speaking of the workforce, we're all aware of the contention around immigration policy. The reality is, immigrants comprise a critical portion of the residential building workforce. The Department of Homeland Security just announced an increase in the visa allotment for foreign workers looking for opportunities in construction.
H-2B visas allow employers to hire foreign workers who come temporarily to the United States and perform temporary non-agricultural services or labor, including construction work, on a one-time, seasonal, peak-load or intermittent basis.
Information on eligibility and filing requirements are available here.
At Monthend, we're constantly in search of new ways to help meet the specific needs of the homebuilding industry. In 2022, we'll be rolling out both Marketing and HR/Workforce advisory to help you find the best new talent out there.
Next up, likely the number one story of Pandemic-era homebuilding is the increased cost of building supplies, most notably lumber. Supply chain issues have garnered national attention for their impact on the economy at large, and remain top issues for both builders and supply-side distributors. Lumber price volatility is at a 75-year high, and building material prices have increased almost 20% since December 2020. There are multiple factors at play here, some seemingly working against each other.
Domestic lumber production is lagging as we struggle to agree on environmentally sustainable methods of extracting timber. Meanwhile, the U.S. Lumber Coalition, comprised of major lumber companies, (many of which are listed on Wall Street), called upon the U.S. Department of Commerce to impose staggering tariff increases on Canadian lumber, despite not being able to meet the demand themselves.
Read: NAHB Chairman Chuck Fowke's Opinion Piece in the Seattle Times
It doesn't seem as though the interests of families attempting to buy new homes, nor the companies building them, are being tended to. Housing has the potential to lead the economy forward, but is currently being restrained by policymakers.
Adaptation and workarounds have become crucial for navigating the ongoing issues at play. It's likely these challenges will persist into the future, and we're curious what your own firm is doing to keep things moving forward.
That's all for now. Thanks for sticking it out until the end. Did this newsletter feature useful information? Any ideas for stuff you'd like to see? Let us know on our social media or shoot us an email at firstname.lastname@example.org.