Between 2007 and 2013, our last major recession, over 2 million jobs within the construction industry were lost due to layoffs, early retirement, or workers leaving for better opportunities.

To make matters worse, while other industries bounced back quickly after the recession, construction took on a much slower recovery curve. Several contractors, who were hanging on for dear life hoping for better days, were left hanging for years waiting for the industry to pick up.

Amongst this chaos, over 150,000 contractors lost their grip and were wiped from existence, making the construction industry one of the hardest hit during this time. If it isn’t immediately apparent, we are heading in a similar direction right now with rising interest rates, stock markets turning bearish, and inflation at its highest in 40 years with Canada at 7.7% and the US at 8.6%.

This is why it’s so important to not be caught off guard and do whatever you can to prepare for what is to come. Below I’ve highlighted 6 tips you should follow to help ensure your company is as recession proof as possible going into this bear market.

Before we get into what you should do, it’s important to understand exactly what it means to be ‘recession-proof’. Typically this means that either the industry or company is critical to the sustainability of society, no matter the size or type of crisis. It’s easy to see why this is the case by observing the different categories that they fall under as seen below:

• Essential Commodity Suppliers – This includes grocery stores, drug stores, and gas stations.
• Essential Maintenance or Repair Services – For example, vehicle mechanics or healthcare services.
• Companies Providing Public Work Services – Examples of these include utility companies such as electric and gas.
• Counter-Cyclical Companies – These companies actually thrive during the recession as their business model is such that business is booming when others are suffering. Examples of this include debt collectors, and bankruptcy attorneys.
• Discounted Pricing Companies – These thrive in a recession due to their low cost offerings such as dollar stores, fast food chains, and big box retail stores.

As you can see above, most construction companies don’t fit under either of the above categories, so for them to be truly recession-proof is more about mitigation than prevention. This is why it’s so crucial for contractors to develop a strategy for succeeding during hard times, where jobs and good help are hard to come by.

Following the tips I’ve highlighted below is a great way to set your company apart from the competition and give yourself an extra lifeline during this next economic downturn.

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