Sometimes there’s no alternative but to tough it out.
The new home construction business is a challenging one in Saskatchewan these days. The latest CMHC figures show the trend on new starts is headed downward in both major cities. Regina, in fact, is on track to see fewer than 1,000 starts. Saskatoon is expecting about 1,200 fewer starts.
Excess inventory is generally the issue at play here. Demand fell behind supply and it will take a while for that situation to correct itself. In the meantime, builders are sitting on their hands and waiting for absorption to get ahead of supply so they can start constructing in earnest again.
From a strictly business perspective, this is where quality management becomes evident. Keeping costs in line and setting aside enough retained earnings – the business equivalent of a rainy day savings account – to weather this kind of downturn are the hallmarks of those with a strong track record. The best ones are generally also the oldest ones – they have been through these droughts before and survived.