Fletcher Building Ltd [FBU.NZ] will be one of the biggest recipients of the New Zealand Government pulling out all the stops to get infrastructure built to "stimulate" the economy and whatever your political views on Government economic stimulus', as a shareholder you would have to be pretty pleased with taxpayer dollars coming Fletcher's way.
Fletcher Building made much of the fact earlier this week when releasing their latest profit result that they are now celebrating their 100 year anniversary.
This is clearly significant because over this time the company has weathered countless recessions, a depression and two world wars.
During the Great Depression, Fletcher Building constructed buildings such as the Auckland Civic Theatre, The Auckland University Arts Building and Wellington Railway Station.
In the late 1930s Fletcher's mobilised themselves quickly enough to become the dominant force in the newly created "government housing" sector and when WW2 hit they ameliorated raw material supply problems somewhat by simply manufacturing their own building products.
My point is here that they manged to get through the depression, so far the worst economic downturn in living memory, there is no reason to believe that they cant do the same during this big downturn.
To a certain extent the bad times have made the company what it is now and as history repeats itself Fletchers are set to build from this once again and move towards another upturn.
I have pointed out before that every cloud has a silver lining and in Fletcher's case it is infrastructure.
Even before the big downturn that started in September 2008 and the recession that bit in New Zealand in January 2008, Fletchers had a massive backlog of commerical and infrastucture building on their books.
Thanks to cash being thrown at infrastructure in New Zealand, Australia, America and other markets that they operate in, that list of infrastructure is going to grow.
In fact Fletcher Building is somewhat of a barometer when it comes to the health of the economy as a whole.
Building companies are the first to feel the effects of a downturn and the first to show the inevitable turnaround.
Fletcher Building's profit announcement last week was as expected, marked down, and the outlook for the next year looks uncertain at the moment but as I said earlier the money being thrown around in Fletcher Buildings operating markets looks set to push them through the hard times.
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The Great Crash of 1929 by John Kenneth Galbraith
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c Share Investor 2009