Construction Accounting & Taxation published the final article of the year by Construction Leader Joseph Natarelli and Chief Construction Economist Anirban Basu, discussing construction as both a leading and lagging economic indicator.
Construction Accounting & Taxation
Subcontractors, who are especially vulnerable to economic and construction spending downturns, should be on high alert. The implication is that firms that are particularly susceptible to business cycles should take steps now to build up cash reserves and strengthen relationships with bankers and insurers. These firms need to think long and hard about the quality of backlog in terms of generating stable profits and cash flow going forward and ensure that only the best and most motivated workers remain on payroll to maximize future liquidity.