The current global economic recession is not being caused or perpetuated by mere talk about it, but rather certain underlying financial conditions and practices that have erased trillions of dollars of wealth, many businesses and millions of jobs. In the last few weeks, the Obama administration seems to have gone from proclaiming that America “is in the midst of a crisis” to promoting a message supporting “the soundness of investments in the U.S.,” indicating that the worst of the recession may be over by the end of 2009. The spin doctors clearly are at work, and others have adopted the same megaphone message.
Make no mistake about it: This will be a long, deep recession for the construction industry. Banks have been devastated by their poor lending practices, and these losses have been multiplied many times over through the bundling of subprime mortgages and use of complex derivative financial instruments. The means and methods of funding construction projects fundamentally have changed. The easy money and house-of-cards financing that drove the boom of the last several years is gone and will not come back anytime soon. The industry must adapt.