What are we going to do?

“We have had some luck, being that we have had work, but only one job at a time. We’re down to one crew in landscape and one in maintenance. It is really slow and we see the entire economy crashing around us. There is literally no work in Sacramento. Other friends of mine tell me that they cannot buy a job. How is the rest of the country doing?”

To get a true perspective on this contractor’s concerns, I’d also ask, “Where is the country heading?” The first question is fairly easy to answer. It’s the second one that’s a crap shoot. There are more mixed signals in today’s economy than in BP CEO Tony Hayward’s testimony before the U.S. Congress.

Here’s a sampling from the Wall Street Journal: capital-equipment orders were up 2.1 percent in May, and 18.4 percent above its year-earlier level. Engine-maker Cummins, Inc., plans to boost capital spending to $400 million this year, up nearly 30 percent from 2009. The G-20 meeting in Toronto saw little consensus from the world’s economic leaders – the U.S. fears moving too fast and plunging into another global recession, and European nations, have cautioned that moving too slowly could produce unsustainable debt loads, higher interest rates and even defaults.

So where are we, and where are we headed? In my consultations with more than 60 contractors in the last five months, the word “recovery” is not what comes to mind. Rather, the word “stagnation” seems to be the phrase of the day. Yes, quantifiably, sales are up a little and people are feeling a bit less anxious. But less than one percent of the contractors that I’ve visited are planning on “robust” growth (more than 10 percent) from 2009. Still fewer feel overly optimistic about the future or are planning for robust growth any time soon. It’s less anxiety, not more optimism, as contractors seem to be more comfortable with the “new normal” in which we seem to be mired.