The unprecedented market downturn from which we are emerging has weakened some construction organizations to the extent that they may have difficulty financing the growth that will come with even a slow market recovery. That, in turn, may increase the potential for defaults. But some of the common ways of dealing with the risks may be self-defeating. Here's what I mean: General contractors and subcontractors have the same exposure—if either type of contractor fails, the entire project is disrupted, and all involved are exposed to disruption and loss.
In my experience, many defaults are not a total surprise, with project owners, CMs, designers, GCs or subs expressing some variation of "I had a bad feeling about this for months" or "All the signs were there, but I was hoping for the best."