Many of the headlines appear to be notably echoing the same sentiment these days: residential construction is still booming, but a recession is looming. This doesn’t tell the entire story when it comes to technology; however. If you dig deeper, it’s obvious that much has changed during the past two years alone in the residential construction sector. In fact, while the industry has not experienced a complete facelift, it has effectively given itself a handsome tuck, which has pretty much energized it enough to take the next step forward, regardless of the labor shortage, some might even say for the better.
The Assn. of Professional Builders recently released the State of the Residential Construction Industry Annual Report 2022. In this, more than 700 builders from the United States, Australia, Canada, and New Zealand took part in the survey, which examined trends throughout 2021. Roughly two-thirds focused on building new homes, while one-third focused on large scale renovation projects.
On the surface, the report mirrors many trends across various verticals. The supply-chain issues created a shortage of materials leading to delays and disruption. Unlike other industries, residential construction saw a surge due mostly to low interest rates. All in all, builders were very busy in 2021.
Despite all this, most projects were still delivered on time in 2021, with only 29.3% being delivered late, and more than half of projects were completed on budget. Also, 49.1% of builders now know their fixed expenses per job, per day, which is up from 43.1% in 2020. That is impressive considering the ongoing supply-chain crisis. Consider for a moment some of the reasons builders were able to be vigilant during a very busy and disruptive time.
Exploring even further, we also see the use of technology skyrocketed in 2021. The report shows the use of dedicated project-management software increased from 33.6% to 64.8%—quite the leap. Also, the number of builders using a CRM (customer-relationship management) system doubled in the last 12 months from 18.8% in 2020 to 37% in 2021. When it comes to estimating, spreadsheets still remain a common tool, but 57.7% of builders now use dedicated software compared to 30.5% in 2020.
When asked what the No. 1 thing builders would like to improve in business in the next 12 months, 42% said systemize the business while 25.4% said increase margins.
With all this in mind, have we finally reached the tipping point in residential construction where technology is more common than not? I would argue we have already reached that point on the commercial side of the business.
Now, residential is experiencing high demand, all while needing to dodge constant disruptions with the supply chain. Is technology the tool that has been missing all along that can help projects finish on time and on budget? This is what we have been saying all along, but now we are seeing it play out.
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