To be successful in 2014, those in the construction industry must understand what happened in 2013. Specifically, it's important to understand the trends from 2013 that are carrying over into the new year.
This presentation analyzes these trends, and is aimed at specifically aiding CFOs, credit managers, and other financial professionals in the construction industry understand the state of the industry at the turn of the year to empower them to better prepare for and take advantage of 2014 opportunities.
Discussed in this presentation:
1. Is The Recovering Economy Real?
We hear lots of talk about an economic recovery...but didn't we hear that last year, too? We look at the actual construction market figures and predictions to answer the question of whether the recovery is actually real...or just more talk.
2. Trend 1: Cautious Optimism
If the economic recovery is gaining steam, what does that mean? One trend from 2013 is that the market is cautiously optimistic. Many predict that along with the recovery will come increased cash flow problems, project delays, and contractor failure. Understand these heightened risks, and proceed into the new economy with caution and planning.
3. Trend 2: Financial Risk Shifts
Perhaps a cause or effect of the first trend, it is clear that players in the construction industry are increasingly trying to shift the financial risk of a project onto other parties. Specifically, those up the chain (owners / lenders / gcs) are trying to shift the burden to the subs and suppliers down the chain. Why is this happening? Is it really a trend? And what can subcontractors and suppliers do to protect themselves and turn the tables around?
4. Trend 3: Protecting Low Tiers
Fortunately for subcontractors, suppliers, and other lower tier participants, while financial risk shifting is giving them more risks on paper, public policy and judicial opinions are largely coming to the rescue. In many cases, the law will actually offset some of the risk shifting attempts up the chain. We review a trend from 2013 whereby the risk shifting measures are counter-balanced by law, policy, and judicial opinions.
5. Trend 4: Leverage Technology
The CFO and finance professional is predicted to become more involved with the company's overall strategy, and specifically, with the task of innovating to solve financial risk problems for companies. How will this be accomplished? By leveraging technology. Specifically, we predict that CFOs and finance professionals will need to leverage tools and remedies to come out ahead in 2014 and beyond.