Soft Landing for the Industry?

You can’t turn on the news without hearing a discussion about “Will we or won’t we slip into recession this year?” And, if we do, will it be a “soft landing” or a big pothole? Everyone seems to feel qualified to make a guess. As for me — I can’t imagine where a recession would come from when we have the lowest unemployment in 53 years. What I do know is that the elevator industry traditionally weathers recessions better than many other industries. New work may slow significantly, but modernization, conversion and maintenance, as always, take up the slack. During 2020 to mid-2022, the industry saw permits skyrocket 50%, while completions ticked up only slightly as demand outstripped the industry’s ability to build and complete projects. Now, everything has slowed due to the high cost of money. Higher interest rates and slow economic growth could create delays for many construction projects. This would alleviate labor and materials shortages and limit the extent to which contractors could boost margins. Skilled labor shortages will be the biggest hurdle for the industry to overcome. 

This month, we focus on the European region. Low vacancy rates across Europe will partially mitigate slow leasing rates. According to JLL, Europe is not inflating lease prices like the U.S. Office construction has held up surprisingly well. Some of the continued activity consists of large, multi-year projects that are being completed in a weaker market. But, in some areas, suburban offices are going up. We have five articles from Europe to share:

Tower ONE at Frankfurt Outgrows Itself by Undine Stricker-Berghoff. Started in 2018, the ONE tower was finished in July 2022 with 21 elevator systems from KONE — 10 outfitted with UltraRope^®.

SEElift Zagreb Meeting by Bülent Yılmaz. The Croatian capital hosted the second Southeastern Europe Lift Network conference. Much discussion revolved around buildings that lack lifts and how to improve. 

A Mix of Old and New by Oliver Rouvière. The twin Société Générale Towers in La Défense, Paris, house an increasing number of bankers. Otis modernized both buildings’ elevators while the buildings were fully occupied.

Solving Exciting Tasks Together by Stricker-Berghoff. This Industry Dialogue showcases Eberhard Vogler, chief engineer, Codes and Standards, at TK Elevator in Germany. In his new role representing Germany in the European Union and international elevator standardization, he takes over from Dr. Gerhard Schiffner.

“Ping” — The Elevator Is There by Stricker-Berghoff. Otis allowed EW an exclusive look into its new Berlin, Germany-based printed circuit board manufacturing facility that produces the controls for Otis elevators worldwide.

One of our features also comes out of Europe: People, Performance and Purpose by Kaija Wilkinson is a great interview with Andy Bierer, Otis Market Group lead, UK and Nordics, and managing director, UK, who says he seizes opportunities as they come. Early in his career, one such opportunity was serving as chief of staff to Otis President and CEO Judy Marks.

Wilkinson also traveled to Barcelona, Spain, in December to report on the International Elevator & Escalator Symposium in Brave New World. This event, backed by ELEVATOR WORLD and Liftinstituut, gathered vertical-transportation (VT) experts together to explore “The Future of VT in 2030.” Expert presenters and attendees discussed the rise of supertalls, mixed-used towers, the Internet of Things, solar power, data collection, high density living, the future of accessibility and even VT in outer space.

Our historian, Dr. Lee Gray, continues his series on EW’s 70 years with 1963: Elevator World Begins Its Second Decade. I know I’m way too fascinated with these columns because they tell the story of my life. My dad, EW founder William C. Sturgeon, sold his elevator contracting company to work full time on the magazine in 1963. I was going off to college, and he said that, now, we would be totally dependent on EW, so I should study journalism and commercial art. I did, and the rest is history. 

Enjoy our offerings this month, and let me know either way.