|Boom to bust went technology, real estate, and now the construction market. Hunting down and executing profitable work in the next few years will be critical to the survival of most contractors.Surety losses are expected to increase in the remainder of 2012 and in 2013: since a downturn in construction activity means more bidders fighting for fewer jobs yielding lower profit margins. Primary factors affecting the overall state of the surety industry will be:
Construction is cyclical and contractors should prepare for the pent-up demand that will build during a recession. While contractors must retrench during lean times, they also need to protect their core resources and be ready to bid work when the economy rebounds. Contractors should be vigilant on:
The bottom line is that sureties want more than a contractor that can build a project. They want a sound business partner that is rational, committed, honest, and knows how to run a successful construction company. In other words, they want a company that will continue to grow and be profitable.
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