As the NAHB (National Assn. of Home Builders) Intl. Builders Show kicks off today, many construction professionals walking the show floor know something important: the construction industry is a good industry to do business in.
For years, I have been arguing construction is a good career to consider for a host of reasons. Certainly, builders are contributing to reimagining our cities, homes, and infrastructure, which is a noble and much-needed pursuit. But let’s be honest, the reality is a career in construction often pays handsomely—something many construction professionals already know very well and that is something they are trying to communicate to a younger workforce.
Construction workers earn an average yearly salary of roughly $58,000. Specialties can earn even more with even more experience. For instance, an engineer or elevator and escalator installer and repairer can take home as much as $90,000 on average. Pile driver operators and inspectors can earn a solid $70,000. Certainly, these are only a few examples and will vary significantly by region, but the bottomline is there is a significant opportunity to be had in the construction industry.
Builder sentiment is also on the rise for the third month in a row, according to the NAHB. Builders expect mortgage rates will continue to be moderate in the coming months. They also anticipate the prospect of future rate cuts by the Federal Reserve later this year. Additionally, a protracted lack of existing inventory helps.
Looking at the numbers, builder confidence in the market for newly built single-family homes rose four points in February, which is the highest level since August 2023. NAHB is forecasting single-family starts will rise about 5% this year.
In February, 25% of builders said they cut home prices, which is down from 31% in January and 36% in the last two months of 2023. However, the average price reduction in February held steady at 6% for the eighth straight month. At the same time, the use of sales incentives is decreasing. The share of builders offering some form of incentive dropped to 58% in February, down from 62% in January and the lowest share since last August.
Certainly, there are challenges to working in this industry. For one, the industry can be cyclical, meaning there are often seasons where work is in high demand and other seasons where work is slow. Smart, savvy builders prepare for this in many ways. AI (artificial intelligence) can help predict demand, pricing, estimates, and more to help a builder succeed in business.
Consider the example of takeoff technology that uses deep machine learning to analyze construction drawings and provide quantity reports. Here we see estimators can compare drawing sets and quantify changes made. Good construction estimating can forecast the cost of a project. It needs to consider past project costs, current costs, the changing nature of material and equipment costs, labor hour, labor rate, sub quotes, indirect costs, bonds, capital costs, operations and maintenance costs, variances, and more. Technology can increasingly help gather all this information in one location to help estimators make a more informed decision.
Ultimately, this will help a construction business be more lucrative in good, strong seasons and in slower seasons. Technology becomes the key to saving time, money, and resources, while creating a profitable bid.
The result is a strong, solid business opportunity for everyone who works at the company—and isn’t that what we want to provide to current and future generations: an opportunity to build something better now and well into the future.
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