As the economy worsens, there is less work available and the competition for that work is increased. This combination of less available work and heightened competition reduces both a company’s volume of work and the profit margins for that work. In order to compete for available work, companies are forced to accept more risk for less potential profit, i.e, companies are forced to risk their financial well being by taking on more risk.
Companies are taking jobs with less profit in them from the start. This leaves companies with a much smaller margin of error for each project. What makes it worse is that there is less potential to make up for a loss on the next job. Also, companies have limited credit available to cover shortfalls. The safety net is shrinking. There is less lubricant in the machine. People are losing their sense of humor.Download Article »