How the Construction Industry Can Meet the Coming Demand
The COVID-19 pandemic has affected almost every industry, and construction is no exception. But in the US, there are increasing signs that the pandemic may be slowly coming to an end—or at the very least, that the worst is behind us.
So what does this mean for the construction industry?
The construction industry is predicted to grow.
In the US, the construction industry is estimated to grow by 15.6% in 2021. That’s a lot of growth.
While GlobalData estimated a more modest growth rate of 1.4% at the start of 2021, there is no doubt that there is plenty of opportunity for growth.
More recently, a major opportunity for growth comes with President Biden’s proposed $974 billion infrastructure package. This is one of the largest infrastructure investments in US history and, if it is signed into law, will result in a high demand for construction work.
Residential construction has also seen a lot of growth, as low mortgage rates and the transition to remote work has increased housing demand.
On top of all this, many projects that were put on pause at the beginning of the pandemic are now ready to move forward.
Can the demand be met?
While all this growth may seem great, those in the construction industry know that things are still far from normal. Let’s look at some of the most pressing construction challenges.
When construction projects were forced to come to a halt during the COVID-19 pandemic, many construction workers found jobs in other industries. Finding construction contractors is now a major economic concern—and one that will only be exacerbated as project demand increases.
High material prices
Lumber and steel prices have seen significant price changes. The National Association of Homebuilders says that “the surge in lumber prices that occurred between April 2020 and April 2021 has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home.”
While production for these resources is beginning to return to normal, prices are expected to remain high until 2022. For construction companies, this means there could still be a lot of fluctuation in material costs, as well as higher price tags for owners.
The COVID-19 pandemic put a stop to a lot of material shipments. While transport is starting back up, it will take time for the demand to be met. Until then, this means deliveries are very slow—and despite contractors’ best planning, slow transportation could cause projects to extend timelines.
For some projects, this is affecting pricing estimates. If materials are out of stock for long enough, prices could rise by the time the material is back in stock—meaning even the best planned project will need to navigate these financial hurdles.
How the construction industry is responding.
All this opportunity for growth alongside labor shortages, high material prices, and slow deliveries, means that companies need to be as efficient and productive as possible.
Rockford Construction’s Director of Preconstruction Mike Miner told Construction Dive that "people are getting aggressive to try to build their backlogs up again. They’re saying they can do it in eight months instead of nine by pushing their people harder, and doing it faster than they’ve ever done it before.”
Construction in the US has been needing to increase productivity for years, and this could prove the most vital time for project efficiency.
How technology can help.
Construction technology provides a way for companies to increase project productivity by streamlining documentation, tracking materials more efficiently, and better organizing plans and project changes.
And, it can’t be overlooked how important communication is during times of fluctuating prices and delivery times. Building rapport with management and stakeholders is vital.
As Quinn Murphy, a construction attorney at Sandberg Phoenix in St. Louis put it for Construction Dive, “relationship capital goes a long way.”
Thankfully, technology improves communication by providing real-time updates and instant communication with those working in an office.
Try Raken to improve project productivity.
Ready to see how construction tech can help your company succeed despite a less-than-ideal industry environment?
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