Recession is Over, But Bank Caution Remains

The report from the National Bureau of Economic Research that the Great Recession had ended in June 2009 comes at a time when commercial construction projects are perfectly positioned to pick back up.

Labor is readily available. Materials are available (and for discount). Land for construction has never been this cheap.

Ask any builder or general contractor what’s the hold-up, and they’re most likely to point to their bank. From what I’m hearing from contractors, the number one impediment to new growth appears to be the banks’ resistance to fund new deals, especially those with any element of risk.

Maybe the market will gain some confidence in response to this report, and then the banks will look again to the construction sector for growth. Until then, we’re all waiting.

Update: The Nashville Business Journal just posted an online article on this issue, noting that Tennessee construction projects are down 32% from this time last year.

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