It has been a long, hard road in the past five years in particular, during which builders have seen their revenues reach the heights at nearly $500 billion in 2008 (nonresidential building), then watched earnings in that sector plummet to less than $350 billion in only two years. Since that time, there were minimal improvements through 2012 although the engineering and building industries appear to be on the upswing at the rate of approximately 5% growth, according to an industry magazine. Firms say their bid lists are getting a little shorter, their backlogs a little longer. They are starting to hire again, and their profit margins (while admittedly thinner than they would like) are starting to return. With all of the challenges and opportunities that are presented as the industry shifts into hiring mode once again, having appropriate levels of construction insurance is one of the things that should not be something that gets lost in the shuffle.
Every type of firm, whether it is specializing in general, specialty, civil or commercial building, reports being impacted by these trends to some degree or another. In order to continue recovering and setting themselves up for more growth in the future, firms must acknowledge these game-changing trends and position themselves to either take advantage of them or insulate themselves from their effects in the building industry of the 21st century:
- Technological innovation-computer-aided technology and tools, broadband mobile communication and handheld processing power are substantially changing the way firms work and deliver their projects.
- Plentiful and affordable domestic energy resources – U.S. oil and gas production is booming and will have a major effect on nearly all sectors of the economy, specifically engineering and construction.
- Integrating design with building practices – architectural, engineering, and construction firms are conjoining through a variety of efforts.
- A low-bid, one-size-fits-all mentality among purchasers-procurement via an open-bid approach on the Internet on reverse auction sites, presenting a host of problems because the complexity of construction services differ greatly from many other products and services and are therefore not suitable for selling in a commodity-like fashion.
These mega-trends can either open doors or shut them for contractors and owners. To ensure that the pathway remains as open as possible, ensure that the firm is fully prepared to conduct business from a construction insurance standpoint. Contact a professional insurance agent to learn more about the coverage details, amounts, exclusions and other important information.