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The Changing Nature of the Construction Industry from Laticrete

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The Changing Nature of Business in the Construction Industry - Laticrete's General Manager's Message.

The nature of the construction industry is changing, and a major driving force for this change is what is often referred to as the commoditisation of construction services resulting in margin compression for construction firms. Whether evolutionary or revolutionary in nature, these forces will drive some contractors out of business. Those who thrive in the next generation will not just survive; they will master change and remodel the industry.

A few years ago, we heard everywhere about the "Perfect Storm" that had come down hard on the economy and tossed the ships of the construction industry around like so many toy boats. We suddenly-it seemed sudden, anyway-learned the housing market was overbuilt, over- sold and over-leveraged.

We learned, whether we wanted to or not, about short selling, sub- prime lending, hedge funds, bundling, credit default swaps, margin calls, quants, derivatives and Ponzi schemes, all with the amazing abilities both to make money and to make money vanish into thin air.

The bubble was so big, it covered the globe. Until it burst, most of us thought things were going well - we were in the "good old days" of the construction industry. In hindsight, we were watching the buildup of forces that would unleash an economic tsu- nami, the Perfect Storm that left the Great Recession in its wake.

If that was not enough, there were real tsunamis, earthquakes and major storms to deal with that cost lives and the global economy untold billions of dollars, yen, Euros and Yuan. To this economic epic, add political grandstanding and deadlocks, leading to even greater uncertainties in the markets and the future of global currencies and debt. Real-life experience in this economy seems more than enough to put action movies out of business.

Click here to read the full article.

Henry B. Rothberg
LATICRETE Australia General Manager



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