Welcome to summer. As the temperatures heat up in many parts of the country, construction companies are tasked to determine what technologies are hot as well—which is easier said than done. It is far too easy to become distracted by “shiny technology syndrome” and to get lost in all the buzzwords prevalent today. So, for this summer, we are going to embark on a blog series and look past the hype and identify the true tech trends that will stand the test of time.
For today’s blog, let’s set the stage. Peggy Smedley always says the construction industry is resilient and cyclical by nature. This is as evident today as it has ever been. Marcum’s Q1 2023 report shows while there are certainly many economic challenges the construction industry faces such as high interest rates and tightening credit conditions it continues to remain resilient in the face of adversity.
Manufacturing-related construction continued to outpace the nonresidential segment and residential construction volumes faded in the first quarter, but some parts of the segment have fared better than others, with multi-family unit increasing 23% in the past year.
Still while the industry continues to add workers at a faster pace than the broader economy, labor scarcity continues to push wages and construction costs higher.
The overall optimism about the construction market is reflected in a number of recent reports, including the Q2 PlanHub Construction Industry Report, which shows one-third of both general contractors and subcontractors expressed optimism.
However, there is a notable difference in their levels of concern: only 19% of general contractors voiced worries, whereas 44% of subcontractors reported feeling apprehension about the market’s future. It also finds from Q4 2022 to Q1 2023, there was a 500% increase in civil projects posted, with road and highway projects leading contributors to this growth.
As yet another example, we can see the optimism present in the 2023 Engineering Business Sentiment Survey released by the independent research arm of the ACEC (American Council of Engineering Companies).
Based on 630 responses, findings show the financial performance of individual firms continues to grow, and executives are reporting a growing volume of work driven largely by significant investments in the nation’s infrastructure through the Bipartisan Infrastructure Law, the Inflation Reduction Act, and other initiatives.
Analogous to the other report, this one found the outlook in water/wastewater, industrial/manufacturing facilities, and transportation particularly strong. While the outlook for certain sectors, such as commercial real estate and telecommunications, is down slightly from the first quarter, the sentiment among business leaders remains positive in these markets.
Another report reveals a here we see firm executives report workforce shortages continue to be a challenge for the industry, with more than half of firms (56%) turning down work due to a talent pipeline that isn’t keeping up with demand.
Certainly, labor and material shortages have likely impacted nearly every construction business this year. But which way exactly are we trending here?
Looking specifically at the trades, Simpro’s new report—Voice of the Trades—suggests 94% of trade workers surveyed have had to delay progress on a job due to missing equipment or stock and 66% of trade workers that have experienced scheduling issues say that a lack of visibility into scheduling has led to field staff having to reschedule a job in the last 12 months.
Last year some of the biggest challenges for the trades included supply chain issues, administrative overload, and a skilled labor shortage. The top three priorities for companies to stay afloat were sales, employee retention, and hiring skilled workers. Certainly, increased visibility into inventory availability, material costs, and profitability would prove beneficial here.
In the coming weeks, we will explore how technology can help solve some of the biggest challenges the construction industry faces today. Everything from generative AI (artificial intelligence), digital twin, BIM (building information modeling), AR (augmented reality), VR (virtual reality), and so much more will be explored. We will identify the impact on estimating, project management, and accounting. We will see the wins the construction industry can experience when digital transformation is truly taken to the next level. The time to move forward is now. Let’s plan to take that first step together.
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