As we near the end of 2023, it is important to keep an eye on what is coming in 2024. Many organizations study trends in the market and place their wages on whether the construction industry is going to contract or grow in the year ahead. Taking a close look at many of these reports will help companies prepare for business in the year ahead.
Consider the example of JLL’s U.S. and Canada Construction Trends 2024 report, which details a positive outlook for the construction industry. The report suggests 2023 has been a year of stabilization and 2024 will be a year of growth, due to the normalization of supply chains and material prices.
Housing needs, office returns, and federally backed infrastructure and manufacturing are driving a positive industry outlook in the U.S. and Canada for 2024. However, the industry still will face its own set of challenges. This report takes a close look at many different areas of consideration, such as the state of the labor market, the availability of materials, and the associated costs.
Let’s look at four of the key trends and highlight what contractors can expect in 2024.
Supply chain trends: As we look to 2024, construction professionals can expect slowing private-sector construction starts, which should keep supply chain pressure manageable. The good news is the current pipeline and increase in publicly funded construction should prevent price reductions, according to this report.
Spending trends: All in all, spending trends will depend on what sector of the market you are looking at, but the overall market should remain stable. Looking at the numbers, material costs are expected to increase by 2% to 6%, employee wages are expected to increase by 3% to 5%, with total costs expected to rise by 2% to 4%.
Labor trends: The labor shortage isn’t going anywhere, unfortunately. JLL predicts overall growth of the construction labor force will slow from its current, already inadequate, pace in 2024. Advancements in technology can ease some of this pressure but won’t completely fill in the workforce gaps we are seeing here.
Productivity trends: Unfortunately, with the labor shortage we may also see falling productivity in the industry—an industry that already has low productivity compared to many others. Competency and efficiency will be increasingly valuable among the workforces. Retention, upskilling, and trust building are critical for the next year and beyond.
As we conclude 2023 and move into 2024, we must consider how the industry will navigate costs, supply chains, labor, and productivity trends. There are certainly hurdles that many companies need to be aware of as they move forward, but with the right foresight and technology tools, builders can plan to conquer 2024. How will you move forward?
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