The construction market is shifting at all times. Like other industries, construction firms merge and divest as industry growth ebbs and flows. The decision to associate with other partners can be crucial for success if based on the right business factors.
Construction firms need a lot of capital to be successful. In the case of homebuilding, the homeowner will pay only a small deposit with regular progress payments, but the homebuilder must buy all of the materials in advance and must pay laborers weekly. Thus, they are fronting a significant amount of capital before they, themselves, are paid. If deadlines slip or issues arise, this can strain their finances. When mergers and other activities impact their capital, they must take notice.