Construction in a Slowing Economy: A Rough Road Ahead
Analysts and academics may disagree about whether or not the economy is in recession, but for the construction industry such discourse may fall on deaf ears. Across the country new home sales plummeted 26% in 2007, and 2008 has already seen the beginnings of a slump in nonresidential construction that is only expected to worsen as the year progresses.
The fate of many small home builders and construction companies may depend not only on how they weather the recession (that is, if we even decide that we are in one), but also in their ability to adapt to the current economic climate. Some home builders, for example, are looking for creative ways to sell their homes.
One notable trend is the recent rise in existing home sales driven by bargain hunters and first-time home owners. This could mean an increase in the demand for remodeling and extensions.
Whatever strategy they use, small home builders and construction companies still have a rough road ahead.
