These are times of great change in the commercial construction industry. From a cost structure standpoint, some of these changes will make the development of deals unfeasible, while others will enable otherwise unfeasible projects to transpire.
Here are four trends worth watching:
The Incorporation and Integration of New Technologies
The construction industry – as a whole – needs to be innovating constantly. This means incorporating technology at every stage of production. Some of the challenges we will face include staying current, understanding what technologies are worth exploring and investing in, presenting these technologies to clients, and delivering information to the field. It is an exciting time because the information technology side of construction is exploding with opportunities and possibilities.
Here are some areas in which technology is changing our industry:
- Engineering software (such as Revit and Navisworks)
- Remediation and abatement
- BIM (Building Information Modeling)
- 3D GPS
- Instrument automation
- Recycling and sustainability
- Non-destructive evaluation
- Water/waste systems
Decreased Labor Availability
A variety of socio-political factors are reducing the pool of available labor and thus will affect the ability of general contractors to remain competitive in the future, such as:
- Immigration laws and immigration reform
- Lack of skilled trade contractors (for example, iron workers, masons, drywallers)
Whether the impact is felt directly or indirectly, labor availability is an important trend to watch. From a purely supply-and-demand perspective, the inability to procure labor is a growing concern.
The Rising Cost of Health Care
After salaries, health care is the largest expense for many commercial construction companies. Due to a number of developments, the construction industry will feel the impact of continually rising premiums from a cost structure position. The extent to which the issue of health care will fully impact the industry remains to be seen. If the trend continues, the costs will have to be absorbed by both the construction company itself as well as project owners. This may negatively impact the development of new projects, as they become no longer financially feasible. The commercial construction industry will feel the effect of both exciting and daunting changes in the years to come. Some offer opportunity, while others offer challenges. But the one thing they all have in common is that they will affect the bottom line.
Our goal is to mitigate the impact of obstacles while simultaneously taking advantage of the opportunities to be had in exploring new technologies and new partnerships.