So what’s the problem?
Residential construction is predicted to continue growing over the next five years. As the economy continues to rebound from the 2008 crisis, this rise in building is attributed to low interest rates and demands from consumers who put their dreams on hold during the lean years.
That’s the good news.
The bad news is that this growth following such a long slack period raises concerns over the quality of the construction being delivered.
The elements in the equation
Builders are struggling to keep up with demand while working under shorter deadlines with less experienced labor and management personnel. It’s estimated that as much as 40 percent of the qualified workers left the industry during the lean years, many never to return. This consumer demand coupled with a shortage of qualified labor is resulting in a noticeable decline in construction quality and an increase in defects.
Data in the report “A Decade in Construction” generated by Quality Built shows that the level of quality across all classes of construction is at an all-time low. Quality Built is a provider of quality assurance services to the construction industry. This trend doesn’t bode well for the industry as it’s finally emerging from the recession.
The end result
Needless to say, construction defects pave the way for all sorts of troubles for builders. Construction defect issues have already decimated the insurance industry and led to carrier withdrawals from the construction niche and in an increase in exclusionary endorsements. As a result, construction defect General Liability coverage for builders is already very much watered down. The result is more out -of-pocket exposure for builders and increased risks for bankruptcy from uncovered claims. The anticipated trend of even more construction defects magnifies this effect.
Source: prweb.com, 22 Oct. 2014.