SCHLEIFER When a construction firm’s backlog falls off, the pressure on the company escalates and “recession” takes on a new meaning regardless of the actual definition of the word. Prospering in cyclical markets and surviving a recession starts with recognizing what will happen when a market softens. The result is totally predictable and has occurred without fail in every industry down cycle for the last 50 years. When there are fewer projects, competition intensifies and prices and potential profits diminish. The ideal in a shrinking market would be for each contractor to accept proportionately less work so that market share
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.