The CBD blog is primarily focused on business and marketing strategy. However, this does not mean that we have been been blind to current events. Keeping tabs on the economy is important for all businesses, but it pays for those of us in marketing to be especially aware of the current economic situation. Economic factors, such as consumer confidence, directly affect the way in which potential clients are targeted and identified.

The sub-prime mortgage crisis in the United States, which created an excess supply of homes, has forced a downturn in both the US & UK construction industry. In traditional supply and demand economics, the falling demand for construction should push commodity prices down. However, global financial instability has encouraged investors to re-invest their wealth in areas with much clearer risks attached, and for this commodities are a prime candidate.

Along with intense financial speculation, commodity prices have escalated globally. This is most notable with oil, but general increases in prices for materials across the board piles even more pressure on the construction industry. DCraig notes this in “Materials Become Hot Commodities.”

In short, the demand for building has fallen, the cost of building has risen and the cost of borrowing to build has risen. This has become a truly global issue.

Whilst it can seem that it is only doom and gloom for the construction industry, it is vital to remember that there are opportunities for real progress to be made, even in these difficult times. Mel Lester, author of the E-Quip blog, reminded me of this in a post entitled “The Changing Business Landscape.” He wrote:

“Downturns do have their benefits. They tend to force us to reflect on our core strategy and operational practices, making needed changes that might be neglected in good times.”

This is clear in the origins of the sub-prime mortgage crisis. The economy was doing well and lenders became careless, lending money to people who couldn't afford it. It now is apparent that if lending firms had remained focused, stuck with their core business strategy and been more prudent, damage would have been much more limited.

There is a lesson for all businesses here: never forget your focus, even when things seem to be 'on the up'. Keep pursuing your business strategy, defining competitive differences and continue to collect and interpret data that you can use to learn about your company. Regular investment in these areas is likely to help you avoid many of the pitfalls most businesses face when hard times come.

We can help you invest in new business generation. If you're interested in having a senior-level sales professional working for you one day a week, on-site, call our MD David Crick today on 01256 841118 or email us at info@constructionsales.co.uk. We'll be more than happy to talk things over with you.