Some experts are predicting that the United States economy is approaching its first bonafide recession in over 10 years. Construction professionals, particularly contractors, are focusing on how to stay afloat if the amount of liquid capital floating around dries up and evaporates. Obviously, you can’t suspend working entirely to cut costs; that’s simply not a reasonable solution. However, you can be more selective about the types of projects you take on to maximize your profits and ensure that you mitigate the financial hit your business will take if a recession is truly looming on the horizon.
Arguably, the most important decision contractors will need to make will be whether to focus on horizontal or vertical construction. Which of these building types is more likely to persist through an impending recession? And which area of construction offers contractors the best chance to stay the course for their business? In this two-part article, the Tallahassee construction lawyers at Cotney Construction Law will explore this important distinction and offer suggestions to contractors who want to protect their business interests.
Horizontal construction, often referred to as heavy civil construction, is often associated with structures that are longer than they are tall. To put it simply, horizontal construction encompasses bridges, roads, highways, railroads, airfields, and other structural projects that focus on transit. One major difference between horizontal and vertical construction is that horizontal construction projects rarely have to correspond with an architect, which is often preferred by contractors and their employees. Typically, in horizontal construction projects, the structural engineer acts as the project manager, which means an entity with closer ties to the industry is in control.
Conversely, vertical construction includes construction projects that stretch vertically like apartment buildings, office buildings, skyscrapers, and other types of commercial buildings. Vertical construction projects utilize the talents of architects to design buildings that are structurally sound, safe, and aesthetically pleasing. Because of this, there is often an overlap of blue collar workers and architects who view themselves as artistic visionaries. Occasionally, this marriage doesn’t work out for the best, but it has lead to some of the most iconic structures in the world. Another important distinction is that many vertical construction projects are funded privately, whereas horizontal construction projects are generally funded by the government.
So, which of these two types of construction are more suitable for your contracting business? Ultimately, that decision will rely on your capabilities, experience, and preference, but we will discuss some compelling reasons to select one over the other in part two.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.