Believe it or not, 2018 is right around the corner, which means that the start of a new decade in 2020 isn’t that far off.
So the question is: Do you have 20/20 vision? In other words, how do you see your industry, and your firm’s place in it, during the next few years?
What You Can Expect
Let’s take a look at where the specialists think the industry will be heading in 2018 and beyond. Some of the changes can be expected — such as those relating to advances in technology — but others aren’t as obvious. Here are five trends to focus on.
- The Internet of Things (IoT).This term has been used to sum up technological innovations. Notably, the IoT allows firms to gather intelligence that can lead to better decision-making. For example:
- Wearables, or computerized devices embedded in clothing or other items, can help track workers on sites and create alerts for hazardous situations or when equipment needs repair,
- Drones can track a site’s progress faster, more accurately and cheaper than aircraft and human surveyors,
- High-tech equipment such as tablets used in the field help determine time spent on specific tasks, and
- Tracking applications such as GPS systems can show where workers are at all times.
As construction firms continue to rely on technological efficiency to improve the bottom line, the IoT is likely to become even more significant on job sites in the future. The challenge will be sorting through the reams of data to find what can best be used at your firm.
- Virtual and augmented reality. Strides continue to be made in virtual reality (VR) and augmented reality (AR). And the buzz around these technologies is growing louder as we head into 2018.
Reality technology enables parties to collaborate before the first hole is dug. Without getting out into the field, stakeholders can tour sites from their computers or other electronic devices. This lets firms visualize a site before it is built and detect and fix potential problems.
However, there’s room for improvement. Enhancements are needed to make this technology more cost-effective and work better with available software.
- Modular construction. Off-site assembly — also referred to as prefabrication (“prefab”) construction — isn’t new. But some observers expect it to begin taking off in a big way in 2018 as costs have declined and quality and performance have improved.
Using modular construction in a controlled, factory-type setting, can help eliminate some of the typical hindrances in the field, especially weather. It’s also easier to maintain quality control standards.
Although growth in this area has been slow, usage is picking up steam, particularly when it comes to HVAC construction and energy consumption.
- Materials and labor.Most experts see constructions costs rising significantly in 2018 — after remaining relatively flat in recent years — while labor shortages still abound. While cost increases appear inevitable, the possibility that rising inflation could exacerbate the problem has the specialists concerned. At some point, escalating costs my cause projects to be put off or removed from drawing boards.
A lack of technical training in schools and the aging workforce, suggests firms can expect to struggle to attract, retain and train workers. Already some firms have had to increase pay to to retain workers and this is expected to continue as the shortage of skilled workers persists. In addition, the costs of recruiting and training workers have grown.
The combination of these factors is forcing many firms to look for ways to cut costs.
One possible solution is a greater use of internships as firms attempt to hire workers straight out of secondary school. But construction firms need to do more to convince young people that advances in technology mean that construction is no longer strictly a blue-collar job.
- Safety and fraud. Unfortunately, for years the construction industry has led the way in workplace injuries and fatalities. According to the Bureau of Labor Statistics, in 2015, the industry topped the list of worker deaths, with 937 fatalities, the highest number since 2008 and an increase of about 4% from 2014. Although the construction industry accounts for most worker deaths, it ranked fourth in highest fatal injury rates among all industries.
Nevertheless, improvements are being made, again in part due to technology. Specialists expect this trend to continue in 2018.
To this end, firms are encouraged to use safety apps that can send vital information about safety protocols to each worker in the field with little effort. If your firm is still experiencing a high number of incidents, it should examine its procedures for complying with Occupational Safety and Health Administration (OSHA) requirements and other standards.
As law enforcement officials and agencies like OSHA have taken more notice of safety in recent years, scrutiny of construction firms has heightened. It isn’t likely to abate.
Construction firms are also warned to be on the alert for fraud involving billing and misappropriation of funds. As detection methods improve, fraud investigation is expected to increase.
Overall, the outlook for the construction industry over the next few years appears favorable, particularly as technology improves and is used more widely.
According to Construction Labor Contractors (CLC), the industry is expected to have one of the largest increases in real output and reach close to $1.2 trillion by 2020. Efforts to boost the U.S. infrastructure should help with the output.
Because the U.S. population is expected to grow from 321.2 billion to 338 billion in 2020, there will be an increased need for residential housing. In addition, the construction employment agency cites factors such as consumer spending and governmental investments in tourism, office buildings and retail space as reasons why commercial construction will also grow.
Talk to the Pros
Take stock with your legal and financial advisors to determine how well suited you are for the changes ahead.