Author: Laura Black
Labor shortages have persisted in the construction industry for years—but where specifically are we seeing the most lags and what exactly comes next? Let’s explore these questions today by looking at data from new reports. Capstone Partners recently released its May 2023 Construction Services Sector Update, which gives a glimpse into market trends. While macroeconomic headwinds have challenged the construction services space, sector participants have remained optimistic in their outlook for operating performance. Notably, contractors expect growth in sales, profit margins, and staffing during the next six months. These projections have been supported by healthy construction spending, which increased by…
The construction industry is facing some steep hurdles today. Rising material and labor costs are cutting margins. But what exactly are the trends as it relates to employee pay? A new report gives some perspective. Today at Work is a quarterly workforce report that blends ADP’s data representing 25 million people with monthly worker sentiment surveys from a random sample of 2,500 workers to provide a recurring, people-centered, and comprehensive view of the world of work. Findings from the monthly survey of U.S. workers find there is a relationship between people’s feelings about their pay and whether they say they…
In the last two weeks, this blog has narrowed in on the subcontractor market and the remodeling market, looking at economic and technological trends for each market. Now, let’s look at nonresidential construction. The AGC (Associated General Contractors of America) notes that the price of materials and services in nonresidential construction specifically has increased about 0.5% from March to April, which is the largest increase since January. At the same time, an index that measures bid prices declined 0.3%. All this to say, margins are even tighter than they once used to be. Certainly, material price changes depend on the…
Economic forces, political unrest, labor shortages, supply-chain woes, and so many other factors are having an impact on the construction industry. What do projects look like for the years to come? This week, let’s dig into one specific market: home remodeling. The homebuilding market overall has seen strong growth in the past several years, even amid a pandemic and other disrupting factors, but now it appears growth may begin to stall. The Joint Center for Housing Studies of Harvard University releases its LIRA (Leading Indicator of Remodeling Activity) quarterly and uncovers declines in the year ahead. In fact, the Joint…
Material and labor costs are rising, rising, rising, and one new report digs into the impact these extra material and labor costs are having on subcontractors, suggesting they bear the brunt of the rising costs to the tune of billions in unplanned expenses. This is according to the third annual report from Billd titled 2023 National Subcontractor Market Report: $97 Billion in Extra Weight on the Shoulders of America’s Subcontractors. The company surveyed about 900 commercial construction professionals across the country. Most were business owners or executives who have been in business for 10 years or longer. This issue of…
Roughly 40-70% of a construction company’s total spending stems from procurement, and new research from McKinsey & Co., reveals many chief procurement officers in the industry believe consistent application of best-in-class procurement practices could lead to up to 12% cost savings. What’s more, procurement will play a pivotal role as construction companies navigate uncertainty and aim for sustainability targets. The insights come from McKinsey’s latest report, The Strategic Era of Procurement in Construction. Taking a closer look at this from a sustainability perspective provides deeper understandings. According to the research, the construction industry is directly and indirectly impacting 25% of global…
Green building is a growing trend, from construction through the lifecycle of a facility. Construction professionals are tasked with pushing the necessary data for certification throughout the entire building process, which can be challenging to say the least. Add into this equation that there is often more than one certification many construction organizations are looking to achieve—and the feat becomes even more difficult. The good news is, now, a new process aims to simplify requirements. Earlier in April, the USGBC (U.S. Green Building Council), GBCI (Green Business Certification Inc.), and the IWBI (Intl. WELL Building Institute) released a streamlined process…
There are myriad factors impacting the construction industry. Everything from the economy to the labor shortage is having an impact on how quickly, efficiently, and effectively work gets done in construction. The last half of 2022 saw declines in material prices, a winding down period of overheated inflation, and overall volatility. Some suggest we began to see the easing of supply chain issues and COVID measures at the end of last year. But what still lurks ahead for construction in 2023? Let’s take a look inside one crystal ball. JLL’s 2023 U.S. and Canada Construction Outlook suggests the construction industry…
Today’s homebuilder needs to craft structures that are sustainable, resilient, and meets the needs of the homeowner. Today’s homebuilder also needs to build homes quickly, with little workforce. Enter prefab housing, offsite manufacturing, and 3D printing, which are slowly starting to become a more viable option for many homebuilders. Consider the example of Mighty Buildings, which is a 3D printing company that is opening a factory to print climate-resilient homes for the U.S. market. A new factory in Monterrey, Mexico, can produce its components for an entire home during each day of operation and is focused on scaling the development…
Money makes the world go round—and it can help get new construction-technology ventures up and off the ground. This has been a growing trend in recent years where investors recognize the value of construction technology, and they are putting their money where their mouth is. There are several different iterations of this. Some construction companies have developed investment wings for their business. For example, since 2019, Suffolk Technologies has backed 24 companies across automation and robotics, supply chain marketplace, sustainability, financial technology, and smart building themes. As another instance, earlier this year, Hensel Phelps announced the launch of Diverge, an…