Over the past 50 years of our business, the economy has had its ups and downs and companies have either buckled during these tough times or doubled down looking for opportunities to maximize profits. Regardless of your current situation, we must look at the construction industry as a whole to determine what direction best suits your risk.
With the increase of interest rates, the housing market will slow down tremendously, and I believe industrial property will be the next to slow down (with commercial right behind it). So where is the good news?
There are tremendous existing contracts and contracts coming in the near future for infrastructure work. I honestly feel that these jobs in roads, bridges, sewer, etc. will keep the larger contractors busy throughout the recession. As for the smaller contractors and how they are to survive, let’s look at some historical examples. I have seen over the past recessions that contractors which have captured a “Niche” will not only survive but will thrive and grow during these times. Yes…. I said GROW. Many small companies will sell for deep discounts allowing opportunities for growth that might not have occurred during good times.
The key, in my opinion, is a “Niche”. Investing in small concrete and asphalt crushers, shredders, and screening plants allows the small contractor to do smaller jobs, and the smaller jobs are currently abundant. With the larger contractors working on the major infrastructure jobs, that leaves a huge opportunity/need for smaller contractors with the right equipment. During some recessions or economic slowdowns, the larger contractors also slowed down and they took every job they could get for a discount. This left the smaller contractor hurting, but when the large contractors are bound to other projects, it opens the door to opportunities for the rest.
I believe that most of us in the recycling industry will not need to suffer in a recession as there will be plenty of work for all in our field. The key is to find a “Niche” and I feel the “Niche” is small recycling equipment contract work.
GrinderCrusherScreen sells large, medium, and small recycling equipment and we are choosing to thrive in the economic slowdown. Let us help you do the same with the right equipment for your “Niche” in the market.