As much as the construction industry wanted to see 2010 come to an end, we are now faced with 2011 as a year of accelerating change. Based on the latest figures from November of 2010, the nonresidential sector volume is continuing to slip by 16.5% year over year through November and the indicators do not point to a solid bottom yet. Publically financed nonresidential construction led the way, while the private sector continued to slip. Despite the volume numbers, some larger contractors told us that they had strong years in 2010 and are well positioned for 2011.
Many of the commercial contractors and craft contractors are working on a backlog of projects that were awarded in the 2007-2008 period. They still have work that they hope will take them through this next year until the volume returns to previous levels. To meet the need for business, several of them have diversified geographically or into the public sector.
For the rest of the industry, 2011 will be a year of heightened stress and accelerating change. Those companies without a solid backlog or deep cash reserves will be doubly stressed. The companies with cash reserves and a backlog of work will be able to improve their talent pool and perhaps acquire competitors to position themselves for a turnaround in their part of the industry when it happens.
How do you see this year for your business?
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