The construction industry holds a crucial role in shaping the world we live in. From our homes and the offices we work in, to the roads we travel. The construction industry is the backbone behind infrastructure development.
Not only does it provide a roof over your head, but also contributes to economic growth. The construction industry is a dynamic landscape where trends play a very important role.
In the last few years, the industry has experienced many ups and downs. Consumer shifts, material issues, and project delays all contribute to the industry trends that we are now seeing. Let’s dive deeper into the construction industry trends of 2023.
Labor Shortage Trends
According to the Associated Builders and Contractors, the industry is currently short 650,000 workers. In fact, a recent study shows that 89% of companies say labor shortage is the biggest issue they are facing. To add to the labor shortages, many people in industry are approaching retirement age. The US Bureau of Labor Statistics say “1 in 5 construction workers are age 55 or older”.
This shift causes it to take longer to complete jobs, or even find the right contractor for the job. It also allows more job openings, but brings in less experienced workers.
To fix this, we recommend that construction employers need to put more focus on attracting and retaining qualified workers. Things like competitive employee benefits, paid time off, and somewhat flexible working schedules are a great place to start.
Another option is to look at alternative recruitment methods. Getting a booth at job fairs, holding industry specific seminars, or considering second chance employees are all great alternatives.
Second chance individuals such as veterans, or formerly incarcerated people is a great way to get more bodies to work. You are also providing these people with something very important to them - a fresh start.
Challenges With Materials
Unfortunately, supply chain issues are affecting the entire construction sector. A large part of this is due to inconsistent demand for certain materials, during difficult times. Tumultuous events around the globe are making it difficult to transport. The transportation issue is causing significant delays to start many projects.
According to the National Roofing Contractors Association, there has been a 17% spike in material prices from 2021-2022, and has only increased in 2023. The price increase along with supply chain issues continue to make construction projects difficult to start, or complete.
Although it is predicted that these trends will continue into 2024, there are things you can do to try to combat these issues.
One recommendation by experts is to adjust your inventory management. Some contractors choose to purchase in bulk and store it. Make sure you are updating your stock on your property policy, if choosing this option. Many consider using a local supplier to ensure timely deliveries. If you choose to use a local supplier, this can create a strong business relationship.
By establishing a strong business relationship with a local supplier, you can enjoy several advantages beyond just timely deliveries. Firstly, working with a local supplier allows you to have better control over the quality of materials. You can personally visit their facility and inspect the products before making a purchase, ensuring that you receive only the best materials for your construction projects.
Additionally, collaborating with a local supplier fosters a sense of community and supports the local economy. By choosing to source materials locally, you contribute to the growth and sustainability of small businesses in your area. This not only benefits you but also helps create job opportunities and stimulates economic development.
A local supplier can offer personalized customer service tailored to your specific needs. They are more likely to understand the unique challenges and requirements of your construction projects, providing you with valuable insights and recommendations. This level of personalized attention can greatly enhance the efficiency and success of your projects.
Furthermore, by purchasing materials in bulk and safely storing them, you can take advantage of potential cost savings. Buying in larger quantities often leads to discounted prices, allowing you to mitigate the impact of rising material costs. Having a well-managed inventory ensures that you have the necessary materials readily available, reducing delays and downtime during construction.
Changes in Technology
To adjust to the labor shortage, many construction companies have opted in to using more advanced technology. Things like robotics, AI, and 3D printing are being used to help make up for the lack of workers and materials. While these technologies can be very beneficial, there are also things to be cautious of.
When businesses implement any form of technology, the danger of hacking and all forms of cyber scams largely increases. If your construction company experiences a hack without being protected, all money you save by using advanced technology goes out the door. You must pay to recover any stolen data.
To avoid this from happening, it is highly recommended to have a cyber liability policy. With cyber insurance, all affected parties will be notified by the insurance carrier on your behalf. The policy will also help recover any data that has been compromised. Depending on the policy rates, some policies will even provide you financial compensation for the breach.
While this shift in the construction industry may be difficult, we hope that this information helps you stay ahead of the curve. For additional information on these trends, or ways to mitigate your risks, please fill out the form below. One of our experienced agents will reach out to you. You can also give us a call at (303) 279-9700.