Dive summary:
- History teaches that economic recoveries can take a very nasty toll on construction enterprises that survived recessions but now are short on funds to finance expansion.
- Aggressive pricing that came into play as a survival strategy during the recession is not going to just go away, and the resulting tight profit margins from survive-at-any-cost days will hurt during the recovery.
- Part of the problem is labor shortages because workers have given up and left the business and materials prices that rise because suppliers cut back and cannot return to full production right away, causing shortages there.
From the article:
The research also confirms that the failure rate of construction enterprises is three times worse during recovery than during the downturn. ...
