The recession wasn’t supposed to last this long nor be this deep. Federal stimulus spending was meant to return us to prosperity as opposed to just diverting financial disaster. But taking a few steps back from the precipice may be the best our stimulus money could buy. The trillion-dollar construction market of a few years ago now appears to have been an illusion, and an $800-billion annual market may be the new reality. In the pop of a bubble, a fifth of the construction market may have evaporated, leaving the industry to make drastic adjustments.
The market already has squeezed about all it can from labor costs, materials prices and subcontractor margins. But with the housing rebound fizzling and the non-residential building market recession deepening, there appears nowhere for costs to go—neither up nor down.