FROM THE DESK OF THE PRESIDENT: RICHARD LICATA – Page 2
Can you believe it’s already October? With fall in full swing and the kids back in school, I look forward to Q4 filled with Holidays; the trick or treaters during Halloween, giving thanks for all our good fortunate for Thanksgiving, and celebrating the birth of Christ during Christmas. After that, it won’t be long before the dark cold months of January and February are upon us as we long again for summer.
To say this past summer was busy is an understatement. We were truly blessed with the over-the-top demand for our business; filling up every day in June, July, and August for local authority work, unprecedented pricing levels for interstate work, and our national account work bouncing back to almost 2019 levels. I am so thankful for an opportunity to reflect upon how well we performed this summer and what an amazing team we have at Reebie. The summer months were not only very demanding on our service providers, but with the extreme heat we were really challenged to stay cool and to keep up the energy. I am very proud of our production associates as we got through it with hardly a complaint. I am also proud of all our customer service personnel as they held our customers hands throughout the summer months and had to have many conversations with them keeping them abreast of changes in their schedules for one reason or another. Additionally, our sales staff had to handle the demands of our customers while at the same time dealing with the learning curve of our new estimating tool. The overall excellence every department has provided served us well, resulting in superior service and excellent reviews. You are the people behind our success!
But as the saying goes, all good things must come to an end. Unfortunately, we are rounding the corner and heading into the 4th quarter with some considerable headwinds. It is difficult to avoid hearing the “R” word (recession). But you can’t turn on the news, pick up a newspaper, or skim social media these days without hearing that bad word. But this is what the Federal Reserve is trying to do. Their primary goal is to raise short-term interest rates to slow our economy from inflation. What that means to our industry is that mortgage rates are higher, so less people can afford to buy homes. If less people are buying homes, less people will move, thus curbing the demand for our business. The 30-year mortgage rate basically doubled from January to today, making the average mortgage cost approximately $800 more per month just in interest.
So, the Feds are purposely causing this recession to curb inflation with the hopes to create a soft landing. It’s not a question of whether or not we are in a recession, as some believe we are, but the bigger question is how long will it last and how sever (deep) will it be. I personally don’t believe it will be deep and long-lasting. Regardless, Reebie has a strong balance sheet and we are not highly leveraged, so we are well positioned to ride it out. But to do so, we will need to take advantage of every opportunity we get.