It doesn’t matter what industry you’re in, an economic downturn affects us all. Both companies and individuals take careful stock of their funds and restrict their budgets. However, an economic downturn in some cases can be a new opportunity. If you make careful, smart choices – you may find yourself presented with an opportunity to start something new. In this blog, we’ll explore the pros and cons of signing a new construction contract with the backdrop of an economic downturn.
If you’re in a strong place financially to make moves on your construction project, the background of an economic downturn can in fact provide certain opportunities.
- Negotiate a better price point
There’s no honour in pushing for a price that devalues someone’s work, however, in times of economic distress, many companies will be much more flexible with their bottom line. Possibly the biggest pro to signing a new construction contract during tough times is that you can respectfully negotiate costs. With skilled building contract lawyers on your team, you’ll have a contract drafted to suit all parties involved.
- Lock in a fixed contract price
While many companies will be willing to cut prices, some will have no choice but to raise them due to supply and demand. If the supply chains are impacted and the demand continues to grow, the value of the product will grow too. With a well-drafted building contract, you can lock in a fixed price before works begin and avoid becoming susceptible to price hikes, should the situation arise in the future.
- A more dedicated building team
With fewer people willing to begin construction projects right now, builders have fewer projects to handle. Reputable builders will always maintain contact with their clients and keep each project as a focus, however, it’s much easier to do this when you have fewer projects in the pipeline. This means their team will have ample time to focus on your project and you won’t be competing with projects that have bigger budgets than yours for their time.
Beginning a new project at any time means assessing the risks involved, and there are a few cons to keep in mind that are specific to economic downturns.
- Difficulty with suppliers
As mentioned earlier, supply chains can be impacted during economic downturns. Whether it’s due to a lack of supply chains or issues with importing materials, there’s a chance that your project will be delayed by factors outside your control. Going into your new building contract with this perspective in mind will help you stay realistic about the project completion.
- Possible construction halts
From problems with the weather to labour shortages, delays in construction projects are always a possibility. During an economic downturn, your main concern will be meeting project deadlines while staying on budget, so that any halts can be avoided. Going into your project with an open mind will help you creatively manage any delays or halts and keep your project on track.
- Builders going out of business
Embarking on any project during an economic downturn is about assessing both the risks and rewards. One major risk to a new build at this time is that the builder will go out of business. Doing thorough research into a building company before choosing them for your project is essential and it may be what saves your project down the line.
If you’re struggling with an existing building contract for any reason, our qualified building dispute lawyers are here to help.
Professional legal advice when you need it most
If you or someone you know needs legal advice during an economic downturn or any other construction law matters, please contact the professionals at Boutique Lawyers. We’re the top property law firm Melbourne has to offer and are dedicated to giving our clients peace of mind. Call 1300 556 140, or submit our online form to arrange a consultation.