As we reach the end of the year and move toward an upcoming election cycle, the only thing that seems clear with the state of the industry is that nothing is clear at all. Though public construction spending has remained steady, construction starts have continued to drop throughout the year, with nonresidential building starts falling 20% from September to October and nonbuilding starts dropping 14% (Dodge Data & Analytics).
While some of this can be attributed to the seasonal change for those in the north and Midwest, concern over the U.S. economy and geopolitical climate have been large contributing factors. As ABC Chief Economist, Anirban Basu, states, “many investors are concerned about a slowing economy, excess supply in certain commercial segments and rising costs of construction service delivery given the shortage of skilled workers.”
The uncertainty in regard to the future regulatory environment and the stalling of bills like America’s Infrastructure Act of 2019 and the Water Resources Development Act, only muddy the waters further.
However, this isn’t the time to overreact — it’s the time to prepare.
Whether 2020 will finally be the downturn economists have been predicting the last few years or not, contractors can take steps now to ensure the best for their business.
Now is the time to talk to the advisers around you, your CPA, your surety, your banker, and figure out where your business stands — are you in a healthy position today? What about for the future? Don’t wait around for an ideal situation to present itself; instead, create one on your own by getting your company ready to take advantage of the next opportunity the market gives you. Then, no matter what comes down the line, you’ll be ready to weather the storm.