What defines a buyer’s market in construction contracting?

A buyer's market in construction contracting is characterized by more supply than demand, meaning that there are a greater number of contractors available compared to the projects that need completion. This scenario grants buyers more leverage in negotiations due to the increased competition among contractors who are eager to secure work. As a result, buyers can dictate terms, seek more favorable pricing, and may have an abundance of options to choose from.

In a buyer's market, contracts are often won through competitive pricing and the ability to meet buyer specifications, paving the way for buyers to negotiate better deals and terms. This contrasts with a seller's market, where fewer contractors and higher demand would shift leverage to the contractors instead.

The other choices describe conditions that align more with a seller's market scenario. For example, high demand leading to inflated prices suggests that contractors have the upper hand in negotiations rather than the buyers. Similarly, limited choices for buyers also indicates a situation where contractors possess leverage, as fewer options lead to less negotiating power for the buyer. The presence of more projects than contractors would define a seller's market, where contractors are in demand and can negotiate from a position of strength.