We asked estimators from around the country if they are seeing construction volume slowing down, staying the same, or growing. And the results are in!
- 45% said they are seeing growth.
- 39% said it is staying the same as last year.
- 16% said it is slowing down.
Construction continues to have a healthy backlog of projects even though material costs are high, supply chain issues are prevalent, and labor shortages are still a headache. The optimism from preconstruction professionals is refreshing. Let's explore what's happening in the construction industry that may lend itself to construction growth.
U.S.-based production of goods and services
Relying on materials, goods, and equipment from overseas has been under a magnifying glass of scrutiny for years. Cheaper overseas costs may have seemed like a great way to save project budgets, but when those items can't get to the project site due to supply chain problems, no amount of cost savings will save a deadline.
U.S. general contractors are turning their eyes (and pocketbooks) to goods and services sourced locally. A recent Deloitte report listed 5 manufacturing industry trends to watch. They are:
- Workforce shortage
- Supply chain instability
- Smart factory initiatives
- Cybersecurity
- ESG investment
New warehouses and distribution centers
Complimentary to the production of goods and services is the need for new warehouses and distribution centers. The pandemic spearheaded increased remote work and led to buying more for their home office/living space. Additionally, some companies downsized their office space but still had a need to store supplies, equipment, and furniture. A recent Construction Dive article explored the growth in this market.
Many construction companies also took to warehousing more of their project goods and equipment because of the headache of supply chain issues. They created their own logistical distribution centers to get materials and tools to project sites without risking delays.
Construction starts are rising
Piggybacking off of the warehouses and distribution centers, nonresidential construction continues to grow. Dodge Data & Analytics reported in June 2022 that nonresidential construction starts rose 20% in May. Residential construction trends usually have a 12-month lead time to nonresidential construction projects, and residential construction has slowed. That slowing is partially due to interest rates rising and the demand for new home building subsiding.
Technological advancements
The pandemic caused construction companies to re-evaluate where time and cost was being wasted. Those internal audits led to leaner processes and less complicated workflows. Several preconstruction teams implemented new technology to help their companies win work while carving out a fair profit on projects.
More technology is being utilized to gather and visualize data that construction companies didn't have access to before. Check out how Beck Technology's customer Brasfield & Gorrie used prefab technology on their HCA Florida University Hospital project.
