In annual Countfire tradition we’ve updated our construction industry trends piece to showcase themes that may affect the industry in 2023. Based on reports of construction industry statistics, and insight from our own team of former-electrical estimators, here’s what to look out for this year.
1. Labour shortages
Labour shortages have unfortunately been a plight of the construction industry for a while now and addressing the tight labour market and declining workforce will likely be a big priority for most construction companies in 2023.
The ongoing shortages have brought on additional challenges for construction companies as many are now struggling to meet demands and requirements. Projects are taking longer to complete and may even initially struggle to get off the ground. This is resulting in higher costs and slowing growth, making the future for many construction companies uncertain.
The reasons behind the labour shortage are multifaceted ranging from job insecurity, to talent moving to ‘competing’ industries such as tech. According to Deloitte’s engineering and construction industry outlook report, the number of construction workers between the ages of 25 and 54 has also decreased by 8% in the past 10 years, while the share of older workers leaving the industry increased.
More recently, there has been an exponential rise in workers prioritising more flexibility and work-life balance when it comes to searching for new roles, so it is imperative for businesses to adapt and keep up to speed with popular hiring market trends. By offering a flexible and agile workforce structure, construction businesses are more likely to attract and retain talent.
2. Continued supply chain issues and high cost materials
The pandemic highlighted issues with global supply chains, and in 2023 we’ll likely see supply shortages continuing. The war in Ukraine, transport issues, supply chain bottlenecks, and China’s prolonged lockdown has since exacerbated the already volatile situation and caused further uncertainties. In a recent survey, 4 in 5 engineering and construction firms indicated that supply chain disruptions are one of their company’s top challenges for 2023.
These delays are inevitably creating a knock on effect causing delays in projects and, consequently, affecting revenue. The fluctuating cost of resources has affected many key construction materials and prices have risen considerably for essentials such as concrete, plastics, lumber, timber and paints - all driving up the overall cost of construction.
The general consensus we found in the industry is that it’s imperative to place orders as far in advance as possible once contracts have been entered into. Firms will want to fix costs with manufacturers to safeguard their contract prices as the geopolitical uncertainties continue.
Other possible ways to mitigate the impact of the supply chain issues and increased costs would be to use technologies to assess inventory for materials, as well as use data-sharing platforms to exchange real-time information with suppliers in order to get ahead of possible disruptions or shortages.
3. “Connected construction” and technical advancements to accelerate the industry
After realising the potential of remote work in the aftermath of the pandemic, more construction companies are continuing to increase their digital investment in 2023. Whether it’s to communicate with clients and colleagues, increase efficiency of estimating practices or streamline tender responses, cloud-based tools will continue to help companies feel more connected.
Dubbed “connected construction technologies” these types of digital tools increase the ability of companies to offer a seamless cross-channel experience to their clients. This ranges from collaboration tools, to electrical estimating software, and internal tools such as cloud-based HR, accounting and security systems.
These types of digital tools allow teams to continue to be able to work collaboratively, even when they can’t physically be together, and be able to step in where a team mate has left off, without hours of back and forth.
Adopting the right type of software will help to improve construction estimates as well as seeing peripheral benefits such as increased sustainability through removing paper-heavy processes.
We expect to see even more technological advancements in 2023 facilitating colleagues to work collaboratively, reducing costs in the long run, and enabling more efficient execution of projects.
4. Sustainable green building practices
We recently revisited the subject of sustainability and looked at the many challenges and opportunities facing the construction industry in the race to use greener practices and curb the industry’s energy consumption.
It was discovered that the construction industry accounts for around 36% of the world’s energy consumption and 40% of co2 emissions. This shocking statistic has amped up the industry’s efforts to find and implement greener practices, such as the use of sustainable materials and renewable energy.
The climate emergency is at the forefront for companies across the world and finding innovative solutions to reduce the construction industry’s carbon footprint will be a hot topic throughout 2023 and no doubt beyond.
As we step into 2023, it feels like an exciting, albeit uncertain, time for the construction industry. There are still many obstacles to overcome, particularly with labour shortages and ever-increasing costs.
However, 2023 also shows great promise for the industry to address some of its challenges by adapting to a more digital and greener future, thereby creating a stronger industry overall.