There have been multiple predictions of a market slowdown coming in 2020. However, since the Great Recession in 2008, the economy has been growing steadily at a rate of 2% in 2018, and an expected continued growth of 3%.
Unemployment is down, and interest rates are being raised to ensure another subprime housing crisis won’t happen. However, factors such as “tightening monetary policy, global protectionism and a fiscal policy hangover” could contribute to a recession.
What could this mean for construction and demolition companies in Portland?
What Does the Future Hold?
Recession predictions vary by analyst. However, they all agree one is imminent. When it will happen and how bad it will be are still up for discussion.
Some think not much will change. They believe 2019’s growth will be consistent with 2018’s. The coming decrease in value in the construction industry is not so much a decline as a “deceleration to … the enhanced level of activity that has been achieved over the past several years.”
However, one thing alarming some economists is the unemployment rate, which is hovering around 4.5%. They are concerned because “any time unemployment hovers around 4.5%, recession comes about three years later.” This has caused Moody’s Analytics to predict a slowdown sometime in the summer of 2020. Their opinion is that there will be another recession, but it is not likely to look like the last one.
Additionally, according to a survey of 60 Economists by The Wall Street Journal, “59% of private-sector economists say that the U.S. economy will stop expanding in 2020.” Some predicted that the recession could come in 2019, 2022 or at an unspecified later date.
How to Stay Ahead of the Recession
The demand for increased C&D will mean that demolition companies in Portland will likely continue to stay busy. However, one important factor to consider is how diverse your business is as well as your risks. As the economy continues to grow it’s important to take advantage of that growth to ensure your company is able to weather a recession.
There are additional factors behind the continued growth of the demolition and construction industry in Portland. These include infrastructure package expectations. For example, the current administration has made infrastructure a priority, which will help spur innovation and investment to help repair and rebuild failing infrastructure. Companies will find themselves working closely with local governments to coordinate new projects.
There will also be an increasing demand for demolition and construction as the country continues to face increasing natural disasters. In 2017 alone there were $306 billion in losses due to natural disasters. Construction and demolition generally peaks two to three years after the event.
Consumer confidence is continuing to rise. More individuals and businesses are willing to spend and invest. The strongest growth may come from the commercial sector, particularly office, retail, and lodging facilities. These areas may continue to have greater demand for construction and demolition.
There is a solid chance demolition and construction companies in Portland are in a good position to weather the coming economic downturn. However, it is still wise to invest properly and have a plan for when work slows down. You can consider further automation or other cost-saving factors. What is most important is to have a plan in place before the recession hits.