How the Recession Is Affecting the Commercial Construction Industry

Even though construction industry is cyclical and recession typically follows a boom period, nothing could have prepared it for the harsh and widespread reach of the recession:

Residential: Homeowners defaulted on homes and others delayed buying homes, leading to a glut of residential real estate languishing in realtors’ inventory.

Commercial: Commercial construction also was hard hit, severely impacted by the federal budget sequester and eventual-but-temporary shutdown, followed by scaled back government spending, and sharply reduced lending practices.

Institutional: Institutional construction remained stagnant, affected by the same limitations and funding problems that the commercial construction sector faced.

How Were Construction Workers Affected?

Nevada, California, Florida, and Arizona are typically areas with plenty of construction work. But the recession changed that:

Nevada employed an estimated 146,000 construction workers at the peak of its construction boom. That number was reduced by 59 percent.

Arizona’s construction employment dropped 50 percent from its pre-recession industry peak.

Florida was close on the industry-related unemployment heels of Nevada and Arizona, losing 40 percent of its construction workforce.

California fared better but still recorded a 28 percent drop.

According to the U.S. Bureau of Labor Statistics (BLS), approximately 2.3 million construction workers lost their jobs in the recession (nearly 30 percent of the total number of lost jobs).

The overall construction industry has an estimated 1.4 million fewer construction workers in 2015 than it did in 2007.

The Construction Outlook in 2015 and Beyond

Happily, the U.S. and its construction industry continue to move away from the harshest effects of the Great Recession. Industry observers expect to see these improvements:

Non-residential construction: picking up and looking more solid, especially with the expected 2.6 percent real GDP growth in 2015. This sector may rise by 8 percent with growth in office buildings, hotels, and industrial facilities.

Single family housing: expected to increase by 11 percent in the number of residential units, thanks to easier access to home mortgage loans.

Manufacturing plant construction: will probably drop about 16 percent after huge increases of 2013 and 2014.

Institutional construction: expected to continue its moderate upward trend and increase 9% over 2014 results.

Residential construction: called the potential ‘wild card’ of 2015 because of rising interest rates. Existing home sales may climb toward 10 percent.

Public construction: growth will remain low due to ongoing federal spending constraints. However, transportation spending is expected to grow by about 2.2 percent.

Major Components of Indian Construction Industry

Construction in India is the second most important activity, next only to agriculture. The country is on the path of fast development of infrastructures in the fields like education, health, power and research. At the same time, the civil construction projects are on fast tracks to improve the conditions of roads, rails, highways and bridges. In addition, the country has managed to lend construction services and products to the foreign markets too.

The construction activities offered by the construction companies in India have improved in terms of quality. The construction equipment manufacturers follow the international standards to offer advanced technology-based tools. There are four major components that work in favor of the exponentially growing sector. Here is a discussion about them.

Skilled Construction Experts

Architects, civil engineers, project managers and many other important role-players in the Indian construction industry are admired for their skills and talent. Construction project managers from India have the experience and training to supervise different types of projects. In the past one decade, many praiseworthy projects have been completed by the skilled construction teams of the country. Construction labor contraction services are offered by many Indian firms for the recruitment of these skilled workers around the world.

Quality Construction Equipments

When it comes to construction tools and equipments, there are many Indian construction equipment manufacturers engaged in this field. The equipments like bulldozers, scrapers, backhoe loaders, concrete vibrators, earth compactors, concrete mixers, hydraulic excavators and many others are manufactured in the country and supplied to different parts of the world. The focus is one manufacturing technologically advanced equipments that can safe human efforts significantly, reduce energy consumption and are safe.

Top Grade Construction Material

The Indian construction services and products are not limited to construction tools and equipments only. The manufacturers and suppliers engaged in the industry also focus on supplying high grade construction materials in different categories. Glass, ceramic, wood, plastic and many other materials are available with these industry players. In addition, these companies offer hardware materials like pipes and tubes made of materials like PVC, aluminum, copper, bronze and others. Tiles for flooring and a variety of sanitary ware products form other important categories of construction materials from India.

Impressive Construction Services

From expert construction counseling to interior decoration and house and commercial building construction, the construction services from India cover all possible fields. Turnkey industrial construction is one service which is in great demand and the experts from the country are capable of offering it. Real estate construction services from India serve the projects like construction of houses, industrial plants, corporate offices spaces and commercial constructions like shopping malls and restaurants.

The construction services from India have become more accessible with the help of the online business directories. These online marketplaces provide detailed information about the service providers from the Indian construction industry. Small and medium sized equipment manufacturers and suppliers from different parts of the company have made it possible to earn exposure for their businesses through these directories. In a way, these directories have become another major component of the industry

The Importance of Construction Industry Solutions

It has been said that the average construction project suffers cost overruns and completion often takes longer than expected. Thanks to Pegasus this should never have to be a problem again.

By using the right industry software you will always be able to complete projects on the scheduled time and within your budget. The industry software that I am referring to is Construction Industry Solutions. With this software you will have complete management control over contracts and sub-contractors as well as effective cash management.

Businesses need to track the costs of purchases and may have sub-contractors who require payment under HMRC’s construction industry scheme regulations. You need to keep on top of payments and always remember that effective cash management is key to making a profit. Construction Industry Solutions was written for SME contractors in the construction and allied industries. It was designed to give instant up-to-date information so that you know exactly what is owed and to who as well as knowing when different payments are due.

Cash management is an essential feature of the construction industry and can make a serious difference to the profit of a contract. Construction Industry Solutions captures all of the relevant contract information across all stages of a job so that the statuses of contracts are immediately available.

One of the key features of Construction Industry Solutions is the contract sales ledger. This maintains the details of current payment applications. It allows current and cumulative revenues together with retention, main contractor discount, etc. Also with contract sales ledger payment, when it is received, can be entered in batches and allocated to one or more applications.

Another key feature that will benefit your construction business is contract purchasing. The purchase order processing system allows the costs of a contract to be monitored by raising purchase orders against a specific contract. As deliveries are received and invoiced, the purchase order is updated.

Contract purchasing is integrated with stock control, allowing stock to be ordered from suppliers against a contract. This feature of construction industry solutions allows you to allocate, reserve and issue stock to a specific contract.

This piece of Pegasus software gives you complete control over all aspects of contract management including payment applications, VAT invoicing and cash receipt matching. It is also fully integrated to sales, purchase and nominal ledgers as well as cashbook and payroll. Construction industry solutions also conform to the requirements of HMRC’s construction industry scheme.

The requirements within the construction sector are highly specialised and Pegasus recognises these complex business requirements within the construction sector. Construction industry solutions also integrates with Opera II, sage line 50 and sage mms.

If you have a business within the construction sector and have not yet invested in a software solution to your management aspects and cash flow aspects then it is highly recommended that you do. Software solutions for the construction industry can dramatically change the way in which your business is run for the better giving you more effective management commitments and more control over your finances.