Found this interesting article and thought I’d share it with you all.
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These are tough times we live in, and the collapse of the economy and the financial markets have brought a sense of doom that still hangs in the air. Even though most of us are limping to recovery among the fallen debris of closed companies and lost jobs, others are yet to recover from the blow. The construction industry has also suffered its share of damage, and from the look of things, it will be some time before things get back to the way they were.
The boom that came before the crash sent housing and construction costs soaring, and even though prices were high, people were able to get mortgages to buy their dream homes. With the subprime mortgage industry failing miserably, there are many houses in the market today, with nary a buyer in sight. The costs have fallen, but people are finding it hard to raise the money for a mortgage. Banks have tightened their lending policies, a far cry from their earlier stand of giving loans to just about anyone who asked for them. So yes, houses are cheaper now, but there are hardly any takers for them.
And when it comes to construction, the cost of building your own home has gone up, because materials and labor have become costlier. There is bound to be a sharp drop in the number of non-residential construction projects, with offices, retail facilities, hotels, hospitals, factories, warehouses and other similar projects coming down by as much as 35 percent in some cases. The worst to suffer will be industrial and manufacturing units because money will be hard to come by for renovations or expansions.
The industry will take at least two years to recover from this blow, but there is one good thing to come out of all this. Housing is now affordable for those who are not looking for premium homes and want something to fit their mid-size budget. Also, the recession has paved the way for more sensible money habits – people are now more careful with their money and what they spend it on because they have realized that it does not grow on trees and that jobs are not certain.
Those in the construction business will have to learn how to stay competitive in today’s harsh economic climate and also be prepared for a time when the boom may start again. If history has taught us anything, it is that it repeats itself, so the best we can do is be prepared for any eventuality.