Many industries in the United States are low on cash right now, due to several different issues in the current business landscape. While a globalized economy is often seen as a good thing, it does have big effects on national companies. With competitors offering low prices from foreign countries, falling demand killing sales and relaxed credit control cutting their profit, some wonder how much longer industries like cement, lumber and steel will be around in the United States. Luckily, collection agencies can help with the last problem, hopefully helping to preserve the domestic presence of these industries.
Since the beginning of international trade, foreign industries have competed with domestic for business. Differences in technology between countries can widen the gap in prices and make industrial materials from foreign countries look even more attractive to the buyer looking to get a deal on the materials needed in construction. In recent years, this has become even more pronounced. Since World War 2, the United States has been falling behind in materials manufacturing. While the United States retained machinery from before the war, many other developed nations were forced to rebuild. The machinery that was rebuilt was newer and more efficient, allowing these countries to pull ahead when it came to manufacturing. As foreign countries provide more and more of the industrial materials in America, they become even more prevalent. Consumers often don’t think of buying domestically, and this drastically decreases sales to domestic companies. Often forced to sell for less or shut down, fewer and fewer cement plants, lumber yards and steel mills make it year to year. While tariffs help somewhat, some companies just can’t compete.
In addition, there has been a decreased demand for these products. During the pandemic especially, building demands have waned, forcing many companies into survival mode. This isn’t just common to the more industrial industries– many industries have been hit hard by the coronavirus as demand for products decreases and the economy slows down. These industrial companies have taken this decrease in demand especially hard though, mostly due to how difficult the Great Recession of 2008 was on these industries. These are the companies that have only just recovered from being put into survival mode a decade ago. They don’t have the funds to withstand another recession, although they will have to. This, along with the competition from foreign companies, has made this time, and the past few years, especially rough in these industries. In the United States, industries that specialize in finished products have been flourishing; building products are widely brought in from other countries. This can make a slow economy even more of a problem for these industries. Many industrial companies need the extra money they were hoping to earn in the next few years. Unfortunately, most building projects were stalled or canceled altogether due to the virus.
Finally, there is the problem of overly relaxed credit control policies. Many American companies are not able to collect all of the outstanding debt owed to them from each order because of relaxed policies. This is a huge issue with companies that are already struggling for enough money to keep their business open. If they spend money and time creating the cement, lumber or steel for an order and are not paid for it, this can drastically hurt the companies chances at survival. Sadly, most companies don’t have the time or expertise to resolve these outstanding debts, and most attempts to do so are rebuffed, on making the situation worse. In the end, there is just not enough room in the already tight budget to hire and maintain a team that will take care of debts. Although it accounts for a large loss of money, companies usually just take the loss. They can’t pay for anything more. Between the heavy competition, the decreased interest in products and outstanding debts, many domestic industrial companies struggle to survive. This could soon become a big problem for the United States. If too many domestic building suppliers shut down, we could soon be relying entirely on foreign sources. We are then at the mercy of goodwill from foreign countries. If there is a war or trade dispute our building supplies could be greatly diminished with limited ability to replenish the supply chains. This could spell disaster for the whole country during wartime.
Luckily, collection agencies are easing the burden of the last issue. While individual companies may not have the time, money or employees to chase clients that didn’t pay up, these agencies can step in to retrieve the money for them. Instead of using any profit to pay back the losses in time and materials incurred by unpaid orders, companies can earn a profit, upgrade their machinery and even save some money away for future troubles. Even though they face grave competition and a loss in client interest, these companies might just make it if they’re able to keep this money that they would have lost. These agencies are doing building suppliers a great favor and they even work on these cases with no guarantee of pay. If they do not retrieve the money that the company lost, they do not get paid.