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Is a Sour Economy Hurting Your Department?
Is a Sour Economy Hurting Your Department?
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Brandon Lorenz
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Is a Sour Economy Hurting Your Department?
Brandon Lorenz
15 Jan 2008 8:00 AM
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Crude oil prices are on what feels like a
relentless upward
march. The subprime mortgage mess is threatening to spill into the broader economy. If it does, it will almost surely act as a brake on growth. One doesn't have to look hard to hear people speculating about how bad things are going to get. And when they do, it's not unusual to hear the word "
recession
" these days.
A recession must feel like a special kind of pain for facility executives. Even under the best of circumstances, it can be difficult to get energy efficiency projects approved that have a payback exceeding two years. Suddenly, the prospect of recession would put even more pressure on facility executives to keep paybacks short.
For those facility executives who have been working to improve the efficiency of their facilities over the last few years, it's possible that some of that low-hanging fruit is already off the table. The irony of course is that as energy costs go up, paybacks on energy projects tend to become more favorable because they generate larger savings. On the other hand, a souring economy can make it tough to get projects approved that require significant capital investment. Clearly, those facility executives who understand the importance of being able to start small and build a track record of success will have an easier time.
Many economists are pessimistic about the current state of the economy. The question is: Has it filtered down to facilities? Are your paybacks/budgets under more pressure than usual? If so, what are you doing about it?
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