Are we on the path to recovery finally? Has the industry rebounded and are profits returning?
I posted this comment on my LinkedIn status as well as on facebook and got two completely different replies to the question.
The first response was from a supplier of an industry product who said that the recovery had arrived. The dead calm of last January and February has been replaced by a sudden rush this year where she and I both were experiencing an influx of calls, opportunity and revenue.
The second response from Linked In was from a general contractor who agreed that the industry had picked up, however she warned that profitability had not. Further through the exchange I made an assumption that appears to be correct, many generals had taken on work to keep the doors open and business running with little profit above the costs of doing business.
I have talked with many companies who had sharpened their pencils last year dealing with an increase in competition for jobs that would normally see 5 to 8 bidders explode to see 12 to 20 in some cases. Is the abundance of bidders going to disappear any time soon? I do not think so. Will the pricing structures of the jobs change? I think they will, as more work become available companies will not be so tight on the bottom line and allow profit to creep back in. Those who continue to price at only keeping the doors open will reach a breaking point and have to make a decision taking less jobs for the same amount of profit as doing double the work.
The recovery and profits are returning at different speeds across southern Ontario. As a member of several construction associations I see some are recovering faster then others that seem to be just hanging on. The strength of the region is being reflected in the number of members who are renewing as well as new businesses joining. The associations like many companies have to branch out into new areas and different ways to appeal to members while remaining a relevant.
Is your business starting to recover? Were you able to survive the last year and take the spots occupied by previous competitors who have failed? Share your stories and success in the next issue of the GTA Construction Report.
