The State of Construction
Published: February 14, 2019
A recent ConstrucTech Magazine article reviews the current state of the construction industry.
While the economy outlook is strong, there still remains a few obstacles the building industry must overcome to remain on track.
Rising Interest Rates, Rising Costs
Michael Bellaman, Associated Builders and Contractors (ABC) president and CEO says rising interest rates represent one of the biggest economic challenges that could affect project starts in the future, and the cost of inputs such as wages and materials, are also creating challenges for firms of all sizes.
Labor Shortage and Tariff Uncertainties
Ken Simonson, chief economist, AGC (The Associated General Contractors of America), says the two biggest economic challenges facing construction right now are finding enough qualified workers and pricing projects at a high enough level to cover rising labor costs and unpredictable spikes in materials prices in light of ever-changing tariffs.
Implementing iPads to AI (artificial intelligence), ABC’s Bellman says construction firms will be better able to deliver their work safely, on budget and on schedule. Systems like virtual design in construction and BIM (building information modeling) technologies standardizes construction designs resulting in modularization and automation of the construction process.
Improvements in Training and Recruitment
While some contractors are looking to labor-saving equipment, others are making investments in recruiting, trainings and overtime to fill positions. Some firms are emphasizing the “cooler” side of construction with the use of drones, laser- and GPS-guided equipment, 3D printers and robots to recruit workers. While other construction companies are taking their recruiting efforts outside the industry. Firms are looking at transitioning military personnel, workers who are leaving disrupted industries, people transitioning out of the criminal justice system, and communities of people haven’t been exposed to the construction trade to fill open positions.
While the outlook is positive now, builders must find creative ways to overcome rising interest rates, increase in costs, labor shortage and tariff uncertainties. Implementing technology and maximizing assets to increase operational value is one step in the right direction for builders to compete in the foreseeable future.