Are We In A Recession? Strange Potential Indicators From the GC Perspective
You’ve probably heard of all the normal recession indicators that are creeping their way into daily conversations.
Supply chain issues.
Cost of inputs (lumber, etc) for construction are shooting through the roof.
And while these are all potential indicators that may put the construction industry in a recession, there are some other under-considered indicators, especially from the GC’s perspective.
These may sound strange, but we think you should keep an eye on them.
Your front-end subs are taking any and all work possible
Think about your concrete guys.
Or maybe your go-to carpentry sub.
When times recently have been good, you don’t hear them asking for work that much. Sure every now and then they’ll shoot you a text seeing if you have anything coming up.
But right now, we’re hearing from GCs who are getting hit up weekly/daily from subs basically begging from work.
While this isn’t a “traditional” recession indicator, it’s one we’re anecdotally keeping our eyes.
More people saying “ya know what, we’ll wait on this project.”
Last year, people couldn’t say “yes” to your quotes fast enough. You had a backlog of work for months and it seemed that no matter the price, people were willing to pay.
Now, things are looking a little different.
You might be hearing more of these things more often…
- “We’re thinking of waiting a couple months to see if prices shift at all.”
- “Ya know what, we don’t need this project done right away. We’ll consider it next year.”
- “I’m heading out on vacation, let’s connect when I get back.”
- “My mom got COVID - I’ll call you in a couple weeks once the dust settles a bit.”
Again, this recession “indicator” is based on piecemealing anecdotal information across GCs. However, it’s something we’ve been hearing about more and more.
One main strategy to beat the recession? Hustle. And say yes to work.
The hustle mentality isn’t our favorite approach.
We believe in building systems and processes that provide sustainable, healthy growth for years, allowing you to dominate your industry for the areas you serve and continuously grow your construction business.
However, every once in a while, the hustle approach is required. It’s a survival instinct that requires tapping into.
So, what does hustling look like?
There are people that take hustling to the extreme. You’ve got the Jocko Willink’s of the world waking up at 4am every morning.
You’ve got the David Goggin’s of the world yelling at you to “Stay Hard!”
Hustling looks like doing 20% more than you’re doing now. Being willing to do the hard things.
- Join that local networking group that feels like a waste of time and actually commit to it
- Go through your rolodex and call old contacts from 5 years ago
- Get out in the field more often and support your team
Here are some other specific, tactical-based approaches you can take:
Get into the apartment category:
Apartment permitting is dramatically increasing. It’s one area of construction that is likely going to stay healthy during a recession period.
Go to any metropolitan area and you’ll see 5, 10, 15 new apartment communities being built.
Don’t have intros/connections to this space? Ask around. Go to the job site if you have to. This is what hustling looks like!
Bid competitively to stay afloat:
You may not be getting your normal rates. And yeah, that sucks.
You may need to temporarily bid competitively to win jobs. To keep cash flowing in so you can pay your team.
Use these jobs as a catalyst for other opportunities:
- Film content on the jobsite to put on your website and YouTube (free)
- Get 5-star Google reviews from every job possible
- Ask for referrals from every customer
By keeping momentum going, you’ll be chugging along if a recession hits hard.
It’s not a long-term solution. Nor is it a perfect solution. But it’ll likely put you in a better situation than if you say no to 95% of jobs and are paying people on payroll with no cash coming in.
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