Oftentimes, trends lists seem to pull items out of the future that aren’t even on the horizon yet and tell you they’ll be affecting your industry in a big way, like, tomorrow.
We wanted to create a more useful list, one that will give you a taste of where the construction industry might be going this year and this decade—while also bringing a dose of reality to each prediction.
1. Climate-related building
One thing’s for certain: hurricanes, fires and floods keep coming, and we seem to need more buildings and homes that are outfitted for natural disaster and extreme weather. Another mission is washing up on construction’s doorstep, too, and that’s the call to minimize the carbon footprint of new builds.
Making buildings stand up against hurricanes, floods, fires and more is a clear priority among builders in certain parts of the country, namely Texas, Florida and California.
In addition, much of the urban expansion that’s expected by 2050 hasn’t been built yet, according to the World Bank’s International Financial Corp. So engineers, developers and contractors are sitting on a big opportunity to make our cities and towns both safer and make their footprints lighter on the energy grid.
Keith Clarke, former CEO of design firm Atkins, predicts that it will be clients leading contractors to green building, because it is families and individual businesses who will bear the brunt of their structures failing in case of disaster. The International Finance Corp. estimates that there is a business opportunity of almost $25 trillion associated with green building in emerging markets between now and 2030.
The upshot: the green building trend might not be on fire yet, but it is certainly warming (pardon the pun). There is a lot of opportunity, and the world is knocking loudly.
2. Rising materials costs
It’s been hard to escape all the talk in construction over the last 18+ months about rising materials costs. New tariffs on China and Canada were expected to raise the price of steel, among other things. There are doubters who still say the tariffs didn’t affect costs, but what’s clear is that the PPI (producer price indexes) for steel mill products leapt by 19 percent from January 2018 to January 2019.
Then a lot of U.S. steel manufacturers jumped in on the game, expecting a new surge of business due to China’s being out of the game—and when they produced more than the demand called for, steel prices actually sank. The lifting of tariffs on Canadian and Mexican steel and aluminum in May 2019 may have also accounted for this price dip.
Here’s the current report from General Steel Buildings about global steel prices: “Steel prices at the beginning of 2020 are relatively stable when compared to 2019 despite a momentary spike in December. Given the generally positive outlook for steel demand, and an expected slowing of Chinese steel production, prices could be set to rise in 2020.”
The upshot: Steel prices are volatile, which makes them hard to forecast. The Association of General Contractors does predict a rise in construction materials costs for 2020, in part due to a drop in interest rates spurring on more demand for new homes.
Construction’s march toward automation is holding steady. Caterpillar CEO Jim Umpleby stated in October that his team is “continuing our focus on autonomy, semi-autonomy and remote operation as we expand our offerings.”
A Tractica study from last spring (excerpt here) estimated that more than 7,000 robots will be deployed by 2025 to take on construction tasks. If the labor shortage drags on as is projected, those robots might not be taking over humans’ jobs as much as keeping the industry afloat.
No doubt some companies have been mindlessly grasping at new gadgets or software they think will help them profit more and trying to force them on a team that doesn’t want or need them. But the construction industry may be on the brink of maturing as a technology user, and refining its approach to using technology in a smarter way.
To describe this new phase, Sundt Construction Continuous Improvement Program Manager Dominic Daughtrey has coined the term “discliplined innovation”. This refers to using metrics and looking carefully at pain points and needs before deploying a new technology. He also says it’s all about making life easier in the field, which is the first test Sundt Construction puts to any new technology. Initial adoption might be a small bump in the road. But the question is: Down the line, will the technology speed up a task that was holding them back, thereby freeing them to do something else or go home earlier?
The upshot: Technology isn’t coming to construction—it has already arrived. Software that helps leaders manage is everywhere, and robots in some form will be showing up more this year and decade. When you’re considering adding technology to streamline operations, you can start by asking, Does this process need to be changed? Will automating it make life easier?
4. Modular building
Modular building offers scheduling efficiencies that many general contractors would swoon over, but it hasn’t been widely adopted yet. One reason is just logistics: construction contractors have to put in the money for projects upfront, and modular building requires even more upfront investment in materials by builders and therefore lenders before fabrication can begin. Still, with heavyweights like Marriott in the game, it’s sure to keep growing.
The upshot: Modular building isn’t for everyone, certainly not small or specialty contractors (at least not now). But there’s a reason industry experts like Construction Dive are following modular closely. Once a more solid framework for adoption is in place—including possibly different lending models, and better systems for shipping built modules—the sky is the limit.