2015: A Great Year for Construction Contractors

By Eric Halsey

This year is looking to be a great one for the construction industry. Following solid 5 percent growth in 2014, that number is set to nearly double to 9 percent in 2015. But coupled with this growth are new laws around the country updating bond amounts and forcing the industry to adapt. Whether you’re facing a new state law affecting your bond or are just entering the industry, understanding construction contractor bonds is a vital part of making the best of 2015. Missed deadlines or improper understanding of the latest legal requirements could mean lost business. Here’s a summary of what the industry can look forward to in 2015, as well as information about the bond you’ll need to hit the ground running.

The Shape of 2015 for Construction Contractors

According to an Association of Builders and Contractors report, the highest growth should be in office (15.7 percent), lodging (17.2 percent), power (22.9 percent), and manufacturing (12.9 percent). Of course, it’s not all rosy, as more anemic growth is expected in education (-0.3 percent) and healthcare (-2.1 percent). Some predictors also forecast drops in electric utility work in light of the recent completion of many such projects. Still, on the whole, the data is very encouraging with more evenly distributed growth expected. All of these trends are being accelerated by post-recession economic improvements, which are allowing many businesses to start projects they’ve put off for years. This means construction contractors need to begin training new staff and purchasing new equipment to be ready for new contracts. But even if you have everything you need for the job, remember your construction contractor bond amount may have increased due to the new laws.

The Role of Construction Contractor Bonds

As construction takes a bigger role in U.S. economic growth, surety bonds are taking a bigger role in construction. While contractors are generally required to be bonded (although regulations vary by state), laws are changing and outdated minimums are being updated, as we saw in Alaska. This often catches construction contractors off guard and leads to conflict between contractors and regulators. But there are real advantages to rising bond rates. With minimum bonding amounts on the rise, quality of service is set to rise, as well. By ensuring that customers, from individuals to governments, are guaranteed compensation in case anything goes wrong, everyone involved in the process feels more secure. This increases reputation and efficiency.

Looking Beyond 2015

The reality is that U.S. infrastructure is in terrible shape, receiving a D+ rating from the American Society of Civil Engineers' latest report card. While this is bad news for many, for construction contractors it means America’s infrastructure is going to require huge investment. Hopefully this can forestall any future slowdowns and keep the industry growing for years to come. All of this combined should have construction contractors looking forward to 2015!

Eric Halsey is a historian by training and disposition who’s been interested in US small businesses since working at the House Committee on Small Business in 2006. Coming from a family with a history of working on industry policy, he has a particular interest in the Surety Bonding industry with a focus on construction contracting and loves sharing his knowledge for JW Surety Bonds.

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