The Exuberant Accountant - Scott Heintzelman

Associated Builders and Contractors (ABC) recently released a Construction Backlog Indicator (CBI), a forward-looking measurement reflecting the amount of work to be performed by contractors in the months ahead.  

The report is a key economic indicator as it offers a specific report on US commercial, institutional, industrial and infrastructure construction industries. The most recent report shows the nation's nonresidential construction industry rebounded in May to 6.3 months of backlog, up from 6.2 months in April, but still down by roughly 24 days since November 2008. 

Keep an eye on this report as it will be a true indicator of when this economic downturn is ending.

In the next McKonomics Podcast, I interview Tina Weyant, Executive Director of the World Trade Center of Central Pennsylvania.  Listen to Tina share what is happening with international business.  Hear how Turkey Hill is selling ice cream overseas and Snyder’s of Hanover is selling pretzels all over the world.  Learn how your business could also benefit from international sales and why our weakening dollar helps exporting goods. 

Click here to learn more about The International Reach of Central Pennsylvania. Enjoy the show, and keep checking back for future episodes!

If your small business lost money in 2008, you may be able to get money back that you did not expect, but you will need to act soon.  Under the American Recovery and Reinvestment Act (ARRA), enacted in February, small businesses that had a loss in 2008 can choose to carry the resulting loss back for up to five years, instead of the usual two.  This means that an NOL in 2008 could be carried as far back as 2003, rather than the usual 2006.  Not only could this mean a special tax refund, but it could be larger because the loss is being spread over as many as five tax years, rather than just two.

This carryback provision offers small businesses that lost money in 2008 an excellent way to quickly get needed cash if they were profitable in prior years.  This option is only available for a limited time, so small businesses should consider it carefully and act before the deadline.

 On this blog, I have never given investment advice and never will.  I have never made recommendations to time the stock market for good reasons as the stock market is irrational.  What I have tried to do with this blog is educate and advise business leaders to help them understand what is currently happening in the marketplace and then how to plan their next move.  Most accountants are good at telling you where your business has been (historical reporting), but few are good at helping you steer your business by looking forward.  I want to help you take advantage of opportunities and steer clear of pitfalls. It is with that context that I share the following information.

American Economist Ben Graham once said that in the short-term the stock market is a voting machine, while in the long-term it is a weighing machine (or as we accountants like to say, “counting machine”).  What this basically means is that in the short-term stocks will move irrationally based on news, spin, politics…, but in the long-term stocks will follow fundamentals and reward profits.

Commercial real estate is bad… How bad is it?  Some have suggested even if it is a problem, it is much smaller than the residential crisis.  Some people have even questioned if it even impacts them.  Many are calling it a ticking time bomb.  What is the status of commercial real estate?

Let me start by saying that I am not an expert on commercial real estate.  The things that I do know I have learned by reading and listening.  Let’s start with some facts.  Currently, 26 percent of all loans in FDIC insured bank portfolios are backed by the commercial real estate market.  Residential and other nonresidential real estate loans make up about 40 percent.  So the commercial real estate sector is a bit smaller, but not by a lot.  It still comprises over $3 trillion in outstanding loans.  Obviously this entire $3 trillion is not at risk, but how much is?

Back on February 17, 2009, the American Recovery and Reinvestment Act was signed into law.  This act is commonly referred to as the stimulus act.  If you are like me, you probably wonder how the nearly $780 billion is being spent.  Well, here is a great website by ProPublica which allows you to search by county and find information about stimulus spending in your area.

The information is listed by state and county and broken down by unemployment rate, total stimulus spending and spending per capita. Each county has a list of project spending as well.  I think this is a very informative website.  I encourage you to review your local information in order to be informed how your tax dollars are being spent.