During the Great Recession, small contractors (companies under 10 employees) failed at a far higher rate than non-construction businesses. Big businesses like banks and car manufacturers got the most publicity. However, given the 200,000 business failures, the almost complete collapse of profitability and the immeasurable human cost—our industry was at ground zero and will be again in the next recession. According to the Harvard University Joint Center for Housing Studies, just over 50% of residential builders failed during the Great Recession, while profits for the survivors were practically non-existent.
Will we have another recession? Yes. When will it start? No one knows. But the closer we get to the start, the more reliable predictions become—kind of like predicting the weather.
How do we know the next one is near? Recessions happen after an extended period of economic expansion. This happens because during the boom times, business productivity drops, business processes deteriorate, and both consumer and business debt increases.
Read the complete article by Aspire Institute Founder & Chairman, Ken Brookings, in Construction Business Owner: Click Here
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