{"id":41290,"date":"2023-09-21T03:58:00","date_gmt":"2023-09-21T03:58:00","guid":{"rendered":"https:\/\/www.my-equipment.com\/blog\/?p=41290"},"modified":"2023-09-11T06:31:09","modified_gmt":"2023-09-11T06:31:09","slug":"the-effect-of-a-recession-on-construction","status":"publish","type":"post","link":"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/","title":{"rendered":"The Effect of a Recession on Construction"},"content":{"rendered":"<blockquote>\n<p style=\"text-align: center;\">There has been a lot of talk about recession in these last few years. The pandemic was not exactly kind to the different industries and construction businesses have also seen some ups and downs.<\/p>\n<\/blockquote>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Historical_Impact\" >Historical Impact<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Economic_Uncertainty\" >Economic Uncertainty<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Positioning_for_Survival\" >Positioning for Survival<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Industries_That_Are_Recession-Proof\" >Industries That Are Recession-Proof<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Publicly_Sponsored_Projects\" >Publicly Sponsored Projects<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Counter-Cyclical_Services\" >Counter-Cyclical Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Marketing_Strategies_for_Contractors\" >Marketing Strategies for Contractors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Diversification\" >Diversification<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Survival_Strategies_for_Construction_Companies_During_a_Recession\" >Survival Strategies for Construction Companies During a Recession<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/#Leverage_Strengths\" >Leverage Strengths<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Historical_Impact\"><\/span><b>Historical Impact<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Recessions in the American economy have historically had a negative impact on the construction industry. During the recession between December 2007 and June 2009, approximately 2.5 million people were laid off from the <strong>U.S. construction industry<\/strong>, and nearly 150,000 construction firms went out of business.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Economic_Uncertainty\"><\/span><b>Economic Uncertainty<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>At the end of 2022, economic experts started debating about the likelihood of another recession. Rising interest rates, often used to combat inflation, have created uncertainty about the future economic landscape.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Positioning_for_Survival\"><\/span><b>Positioning for Survival<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For construction companies, especially smaller contractors with limited financial resources, making the right decisions during uncertain economic times is critical. Positioning the business to survive in the worst-case scenario is a prudent approach.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Industries_That_Are_Recession-Proof\"><\/span><b>Industries That Are Recession-Proof<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><b>Necessity-Based Industries\u00a0<\/b><\/p>\n<p>Recession resistant industries are those that provide necessary goods and services that people cannot do without. <em><strong>These include things like;<\/strong><\/em><\/p>\n<ul>\n<li>Grocery stores<\/li>\n<li>Pharmacies<\/li>\n<li>Gas stations<\/li>\n<li>Home heating oil deliveries<\/li>\n<li>Fast food businesses<\/li>\n<li>Discount stores<\/li>\n<li>Big box retailers<\/li>\n<li>Healthcare facilities and practitioners<\/li>\n<li>Vehicle maintenance and repair services<\/li>\n<li>Public utilities (e.g., power, water, gas)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Publicly_Sponsored_Projects\"><\/span><b>Publicly Sponsored Projects<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Publicly funded construction projects, such as schools and <strong>public healthcare institutions<\/strong>, are less susceptible to economic downturns because they serve essential community needs and continue to receive funding. There is no need to worry about securing funding to purchase <b>used heavy equipment<\/b> to carry out the project.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Counter-Cyclical_Services\"><\/span><b>Counter-Cyclical Services<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Certain privately owned businesses, like debt collectors and bankruptcy lawyers, tend to perform better during recessions when financial hardships increase.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Marketing_Strategies_for_Contractors\"><\/span><b>Marketing Strategies for Contractors<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Explore Infrastructure Opportunities Consider pursuing infrastructure construction projects made available by the <strong>Infrastructure Investment and Jobs Act (IIJA)<\/strong>. Funds from IIJA are distributed to states and will be accessible for infrastructure projects starting in 2023. Public-private partnerships (P3) may be involved, making diversification into public sector projects important.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Diversification\"><\/span><b>Diversification<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Diversify your project portfolio across various industry sectors. This provides stability during economic fluctuations. The COVID-19 pandemic highlighted the value of diversification when certain sectors, like hotels and office buildings, experienced decreased construction activity.<\/p>\n<h5><span class=\"ez-toc-section\" id=\"Survival_Strategies_for_Construction_Companies_During_a_Recession\"><\/span><b>Survival Strategies for Construction Companies During a Recession<\/b><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<h3><span class=\"ez-toc-section\" id=\"Leverage_Strengths\"><\/span><b>Leverage Strengths<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Maximize your advantages, control expenses, and foster employee loyalty. A strong financial position is crucial.<\/p>\n<p>Demonstrate Financial Stability Contractors entering the public sector or P3 projects may need to prove their financial stability and creditworthiness to obtain necessary construction bonds. Public sector contracts often require surety bonds.<\/p>\n<blockquote>\n<p style=\"text-align: center;\">The construction Industry tends to be sensitive to economic recessions. Contractors should consider diversification into recession-resistant industries and <strong>explore opportunities in infrastructure construction<\/strong>. Also, maintaining financial stability and creditworthiness is just necessary for long-term survival, especially in the public sector.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>There has been a lot of talk about recession in these last few years. The &hellip; <a href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The Effect of a Recession on Construction&#8221;<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":41291,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[783,784,785],"class_list":["post-41290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-heavy-construction-equipment","tag-demonstrate-financial-stability","tag-industry-sectors","tag-public-healthcare-institutions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Effect of a Recession on Construction - Heavy Equipment Market Insights | News | Guides &amp; Beyond<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.my-equipment.com\/blog\/2023\/09\/the-effect-of-a-recession-on-construction\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Effect of a Recession on Construction - Heavy Equipment Market Insights | News | Guides &amp; Beyond\" \/>\n<meta property=\"og:description\" content=\"There has been a lot of talk about recession in these last few years. 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