After a turbulent year, we are cautiously optimistic that the construction market trends of 2021 show a time of growth and reemergence for the construction industry and beyond. While challenges undoubtedly will remain, the coronavirus vaccine and recently passed relief package are two of many reasons to be hopeful that we are inching closer to normalcy. As the market shifts and adapts to the fallout from the pandemic, here are five construction industry trends to keep an eye out for this year.
Construction Industry Trends
- Staying Safe: Safety has always been a concern for the construction industry, but, with an ongoing pandemic, it has become ever more important. Masks, hand sanitizer, social distancing are all expected to remain — at least for a little while longer. This might also mean an increased union influence in projects, which can add cost and time. While the Equal Opportunity Employment Commission determined that employers could require workers to be vaccinated, handling those who refuse to get inoculated is going to be a challenge for contractors.
- Supply Chain Disruption: As many contractors know, lumber is in hot demand and prices are going through the roof. There is no indication that this is going to improve anytime soon, so contractors are exploring alternatives. Some are turning to redwood and cedar, and others are looking into engineered wood. To account for unforeseen cost increases, many contractors are adding escalation clauses to their contracts.
- Increased Demand for Warehouse Space: We have seen supply chains pushed to their limits in recent months, with shortages of everything from toilet paper to bikes. In an attempt to prevent the collapse of supply chains, many companies are looking to build manufacturing, storage, and distribution facilities. The explosion of e-commerce has intensified these demands, as companies look for the warehouse space to keep up with their booming sales.
- Focus on Residential Projects: The pandemic-fueled urban exodus coupled with historically low interest rates, has led to a surge in residential construction projects. According to a report from Dodge Data and Analytics, residential starts were up 22.6% from June to July, while non-residential building starts were down 31%. The downturn in non-residential construction is largely attributed to uncertainty. The future of expensive buildings like offices and hotels is unclear.
- Technology in Construction: As we have seen in our own lives, technology gives us a heightened sense of convenience and ease. The same is true for construction technology. From 3D printers to smart contracts, drones to advanced building software, there are several technological innovations that can enhance efficiency in construction. Only time can tell which tech trends will stick.
By staying abreast on the latest construction industry trends, you can boost your business’s bottom line — and your profitability. Those who embrace change are often those best poised for long term success.