What a Recession Would Look like for Construction
Date Posted: August 17, 2022
Posted In: Discussion, News,
From ConstructionDive: Industry experts list eight steps builders can take in order to prepare their businesses for an economic downturn.
Preserve cash, build backlog and target federal contracts in case a recession sinks the U.S. economy.
That’s the winning game plan for construction pros during these uncertain economic times, sources told Construction Dive.
Whether a recession is here now or is waiting in the wings, industry experts suggested now is the time for construction companies to start shoring up their businesses, just in case. Here are some of their top tips for getting recession ready:
Build what you know. In the face of a recession, contractors should aim for more than 12 months in backlog and to “stick to your knitting,” said Joe Natarelli, construction services leader at Marcum, a national accounting and advisory services firm.
“Now is not the time to go and try different trades,” said Natarelli. “If you’re a mechanical contractor or you’re a general contractor, stick to the jobs you have a track record with [and] where you’ve done well.”
Monitor financials. Nick Grandy, construction and real estate senior analyst at RSM US, a Chicago-based accounting firm, said the most important thing a contractor can do during a potential slowdown is to maintain a businesslike approach.