The predictions for 2023 are coming fast and furious for anyone who has a stake in the construction industry. Let’s take a look at what is in store for the construction industry in the year ahead.
Forecasts can run the gamut—everything from construction industry trends that are skyrocketing to tech movements that are taking hold across many vertical markets. Each helps shape the way the market and business unfold in the year ahead.
Industry Trends to Watch
Let’s start by narrowing in on construction industry and real estate trends to be aware of in the year ahead. Many reports are point to several factors that will make the market what it is in 2023.
As one example, Blueprint released insights into how executives are thinking strategically about the year ahead. Companies that contributed their predictions include JLL Spark, Xeal, Zigg Capital, PGIM, Cherre, LAB Ventures, OMERS Ventures, and many more—which provided thoughts on the evolving funding environment, industry consolidation, and key areas to watch.
Some of the top trends include a rise in home electrification; slow acceptance to the hybrid office; companies embracing data and automation; real estate sustainability will take center stage; ESG (environmental, social, and governance) becomes mission critical; EV (electric vehicles) fueling will continue to grow; technology will fuel broker efficiency; and startups will refocus and execute, but funds will dry up for early-stage startups, among others.
Turning our attention to another report, PlanHub reviewed platform activity data of 26,000 active general contractors and 270,000 subcontractors. It also includes a special survey of 465 respondents examining the biggest challenges they face, the role technology plays in their business, their outlook for 2023, and more. The report additionally examines general contractors and subcontractors views on the outlook of the construction industry in 2023 through an industry leader survey.
Here is what it found. The top concerns among construction companies are rising material costs, scarcity of skilled construction workers, and material lead delays. Still, 82% of general contractors and 80% of subcontractors plan on growing their business in 2023. That’s pretty impressive.
It appears opportunities abound as well. The passage of the Infrastructure Investment and Jobs Act in November 2021 spurred a 290% increase in civil infrastructure and transportation projects posted on PlanHub.
Of note, many experts in both reports suggest data and automation will take center stage, as companies look to data to fill in the gap in the workforce and to deal with rising material costs.
Tech Trends to Observe
When narrowing in specifically on technology related trends, the PlanHub report suggests many are now more readily embracing technology. Since the beginning of 2021, a 324% increase was seen in the number of general contractors posting their first projects, and projects with strong activity increased 231%. General contractors increased their invitations to bid by 35%.
Additionally, subcontractors have responded to adversity by seeking new ways to find business. Subcontractors expanded their reach by listing up to 20% more trades in which they work and expanded their service area by nearly 50%.
It seems the big takeaway from most reports these days is there will be some market shakeups like the labor shortage, rising material costs, and heightened need for sustainability—but technology will help fill in the gap that is missing in many cases.
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