November 25, 2009
What happens to construction costs in a recession?
JOKER23 asked:
Lets say I want to construct a building, would it cost more during a recession? I was guessing less because the amount of construction people on the market is higher than usual.
atlanta construction staffing
Lets say I want to construct a building, would it cost more during a recession? I was guessing less because the amount of construction people on the market is higher than usual.
atlanta construction staffing
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Comments on What happens to construction costs in a recession?
10:08 pm
atlanta construction staffing
it depends whether firms thinks whether it's productive on the investment or not; for example, in recession, people tend to spend less so demand for goods n services (including rent) falls causing price to fall; when demand picks up then producers are willing to invest in their biz such as construction projects
10:26 pm
atlanta construction staffing
In a recession, usually building new projects slows down. However, if building costs have lowered in price (which they havent) and construction companies are able to get financing (which they can't) then it would be prudent for construction companies to build during recessionary periods.
Not all recessions are the same, is what I'm getting at. The trouble we have today for instance, is that building materials such as steel have not mellowed in price and the bank has stopped lending out money to construction companies to finance their projects. This is putting a real spur to any new projects.
So in economics, it all depends on a variety of factors, there isn't usually a straight one-line answer. Hope this helps.