What Construction Industry Trends Should I Watch in 2023?
According to McKinsey & Company, construction makes up 13% of world industry and is poised to keep growing, with many promising developments underway. In this article, we’ll go over the top construction industry trends to watch out for this year, both good and bad.
1. Ongoing inflation and supply chain issues
Unfortunately, inflation and supply chain issues have persisted into 2023. Though the U.S. inflation rate has been coming down recently, it still remains 6%, which has a direct impact on the cost of construction materials and labor.
Furthermore, the construction industry is still plagued by supply chain issues, including shortages of timber, drywall, roofing insulation, and other materials. However, shipping bottlenecks that started during the COVID-19 pandemic are expected to ease.
2. Persistent labor shortages
The construction industry is trending more and more toward a labor shortage. According to Associated Builders and Contractors (ABC), the industry is short about 650,000 workers. Part of the reason for this is that a large number of construction workers are retiring and not enough young people are going into construction to replace them.
This calls for a more diversified construction workforce. Moving forward, construction companies that broaden the demographics from which they hire will be better staffed. Getting more women, military veterans, and minorities into construction may help.
3. Technology advancements
Though construction may not be known for being on the cutting edge of technology, it has been adopting many new technologies that will drive innovation and change.
Here are just a few examples:
- Internet of Things (IoT) technology allows construction companies to quickly share information across devices connected via Bluetooth to help with job site safety, GPS mapping, and other data collection.
- Collision avoidance systems can help provide proximity alerts and blind spot coverage to equipment operators to help minimize machinery damage and lower project costs.
- 3D printing can help speed up construction processes by printing structural materials (which may also help address the housing shortage). The global 3D printing construction industry is projected to reach $750.7 billion by 2031.
- Building information modeling (BIM) software streamlines construction workflows by allowing architects, engineers, and general commercial contractors to collaborate on projects in real-time. Though BIM has been around since the 1970s, the technology is constantly improving. The global market for BIM is expected to reach $15,892 million by 2027, growing at a compound annual growth rate (CAGR) of 15.2% from 2020 to 2027.
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4. Modular construction
Modular construction, such as prefabricated and manufactured homes, is another trend taking the industry by storm. It refers to constructing buildings by modules in an off-site facility. Then, once all the modules are built, they are delivered to the final destination to be assembled like legos.
In North America, the permanent modular-construction market share of new real estate construction projects grew by about 51% from 2015 to 2018. Furthermore, revenues for the segment grew by a factor of 2.4 over the same period.
Its primary benefit is its efficiency. Construction companies can build structures that are just as high-quality as traditionally built structures in a fraction of the time. When budgets are tight in a tough real estate market, this could be just what some need.
5. Drone mapping and photography
According to a study by DroneDeploy, construction is the fastest growing commercial adopter of the technology. These drones can be used to create detailed job site maps, monitor construction progress, take accurate stockpile measurements, improve worker safety, limit unnecessary waste, and cut down on overall costs. For many construction projects, they are a worthwhile investment.
6. The Rise of Smart Building Technology
Inside offices across the U.S, smart building technology is on the rise. From voice assistants to automated lighting and keyless door locks, virtually every aspect of facility management is connected via the internet of things (IoT) and controlled from a central device.
7. Green buildings
Lastly, green buildings are buildings that are environmentally friendly and sustainable. They help improve the ecosystem of which they are a part.
As Environmental, Social, and Governance (ESG) becomes more important to consumers, investors, and other stakeholders, an increasing number of buildings will go green. In fact, many companies and governments are trying to reach net-zero emissions by 2050, and green buildings contribute toward that goal.
How? Green buildings certified by the Leadership in Energy and Environmental Design (LEED) program in the U.S. consume 25% less energy and 11% less water than traditional buildings. They do this, in part, by recycling as many building materials as possible, which is why by 2024, the global green building materials market is expected to reach $433 billion.
As a result of green buildings’ energy efficiency, building owners also get to save on energy costs. So in the long run, green buildings can be well worth the investment environmentally and financially.
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