The U.S. nonresidential construction market is under pressure. With oil around $130 per barrel, sub-prime and mortgage losses still negatively affecting bank credit lending and an increasing number of states with growing deficits, the strong construction expansion seen over the past several years is quickly coming to an end. If prior economic downturns are any indication, fewer construction projects will lead to more bidders, lower profit margins for contractors and increased defaults. In this changing environment, the role of surety industry in prequalifying and bonding contractors becomes more important.
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