profit fade

Margin Fade: Catching Profit Erosion Before the WIP Does

Margin fade — the slow erosion between the gross margin a contractor estimated at buyout and the margin a job actually delivers — is one of the quietest ways a construction company loses money. By the time it shows up on the WIP schedule, the profit is usually already gone. Here is where fade comes from, the early-warning signals that precede it, and how a disciplined job-margin trend review catches it while there is still time to act.