Slow Growth Marks the Construction Industry
June 24, 2020
Due to COVID-19, expectations continue to be less than optimistic regarding any growth in the construction industry this year. According to International Construction, expect growth to linger around half a percent. That's down from the forecasted 3.1 percent.
How do general contractors and subcontractors prepare for this brave new world where social distancing and state shutdowns have made it tough to grow your company? How do you compete? You have to think and work outside the box. As states continue to open up, so does opportunity for increased competition and to bring your ingenuity into focus.
First, however, let's look at a few reasons behind the sluggish growth and how you can use it to create competition.
Reasons for the Slow Growth
COVID-19 isn't the only reason for construction's slow growth. It began before the virus was a household name when the construction industry began to flatline in 2019.
For example, housing construction hit the floor this past April, down over 30 percent from March. This makes it the worst drop since 1959 and at the lowest level since 2015. As you know, the construction industry is a holistic one. If there's a downturn somewhere in the supply chain, in transportation, apprenticeships, or in the various types of new and ongoing construction projects, then it can affect the projection of the entire industry.
However, the outlook isn't totally grim. It's true that this isn't a normal year, but this situation does bring about many opportunities that can help regenerate not only your mindset, but win you bids.
Transforming Slow Growth Into Your Advantage
Most states are now allowing non-essential construction even with stay-at-home orders ongoing. The current exception lies in New York. The country's been at a standstill for a few weeks, but there's opportunity for transforming the remaining half of the year into one that will serve to your advantage:
• Stay educated in your field of expertise
• Learn new skills
• Keep your finger on the pulse of your market
• Prepare to bid and win projects
When it comes to bidding and winning projects, you have to be proactive. Take a look at yourself and your company and make decisions based on what you can feasibly do. What do your company's projections look like? What's on hold? What's on the agenda? Now's the time to review your rights under any current or upcoming contracts. Examine your short-term costs and determine where you can realign your outlays. Keep your subcontractor database updated. In other words, prepare for the "new normal" of planning out the rest of your year.
Bidding for a Project's Life Cycle
How can you bid on new projects when your current status feels like a daily mess of unknowns? Government bidding might seem like a go-to since budgets and timetables are usually fixed. But again, this isn't your usual environment. The most qualified may not prevail over a company that's willing to take extraordinary risk to win a bid.
The same is true in the private sector. Whether you're a general contractor or a subcontractor, once you're invited to bid on a project, your first impulse might be to bid cheaply since work's been scarce. That mindset may put you in a hole if there's a second wave of shutdowns due to COVID-19 later this year.
PlanHub's cloud-based construction bid software is an excellent resource during these times. Our software allows general contractors and subcontractors alike to plan for the life cycle of projects. With an unlimited reservoir of features for both general contractors and subcontractors, PlanHub can help take some of the risk out of planning. To learn more about our software and it’s features and benefits, or to request a demo, contact us today!