Though the past decade has been turbulent for the commercial building industry, things are expected to pick up in the coming years. As economic conditions continue to improve, both large-scale and ground-up commercial construction projects have been popping up all over the nation. In fact, the construction industry is expected to increase by at least 6% in the coming year, netting an overall profit of $712 billion.
There are several trends that will be emerging as the commercial construction industry steadily expands. By understanding these 8 shifts and currents in the industry, you can better know what to prepare for and how you can make this year the best yet!
1. Expanding Middle Class Population & Increased Demand For Housing Units
Nearly 50% of the American population are working, middle class people. Residential building for middle class families is expected to increase by 16% in the coming years. This provides positive opportunities for construction companies.
2. Shortage Of Skilled Labor
One of the biggest concerns for this year is the continued shortage in skilled workers. Many employees left the industry during the recession and never returned. This left construction companies short-handed. While the recession was a leading cause of the worker shortage, experts also say that the construction industry has found it difficult to appeal to younger, talented workers. A slowdown in immigration has also contributed to this issue, with reports finding that many workers returned to Mexico and other countries of origin during the recession and didn’t return to the US because of increased immigration controls and increased job opportunities abroad.
3. Going Green
Green construction is a major trend in the industry right now, and it’s not backing off anytime soon. In fact, the green building sector is leading the overall construction growth across the U.S. and is expected to account for more than 3.3 million jobs by 2018.
Moreover, commercial and residential sectors will be outpacing other areas of green construction. As of 2016, green building accounts for 26-33% of the total residential market and has been monumental in helping the construction industry recover after the recession.
4. Prefabricated Methods Will Rise
Offsite construction will be a driving trend in the near future. Alternative building methods like modulation and prefabrication not only reduce the overall construction time, but they also result in less waste and potential cost savings for clients. Gaining popularity over the past five years, modular construction is expected to continue making waves in the commercial construction sector for many years to come.
5. Building Information Modeling (BIM) Is Necessary
While BIM has been a growing trend for several years, it’s now a necessary system for even small construction companies. BIM offers consistent, accurate and time-consuming project documentation. Furthermore, using BIM helps companies better collaborate and coordinate with everyone involved in the construction project.
6. Accidents And Crime On The Rise
Unfortunately, not all construction trends are positive. In 2015 local law enforcement and authorities made a point of seeking out and punishing contractors guilty of misconduct. This was particularly for violations and offenses from worker safety issues and corruption. Other offenses like fraud, bribery, extortion, money laundering, bid rigging and larceny were also punishable with large fines and criminal charges. Experts predict this trend will continue into the coming years with fines and punishments steadily increasing.
7. The Single-Family Sector Will Grow
Though multifamily construction was trending for several years, it’s expected to soon slow down. The single-family sector is growing. In years past, multifamily construction was seeing double-digit percentage increases while single-family slowly, steadily grew. This year, however, the single-family sector is expected to increase by about 20% while multifamily will drop to seven percent.
8. Remodeling On The Rise
Similar to single-family construction, experts say that remodeling will also see significant growth. Already, many homeowners are also reporting spending more than twice of what they did in 2012 for home improvements costs, indicating that home improvement costs are now outpacing increases in their overall spending.
Staying Ahead of Changes
Staying on top of changing trends will help you and your business stay competitive in the cut-throat construction market. With a commercial building material ERP software system, you can also stay ahead of your competition by implementing a business management solution that makes project management quicker, easier and more transparent. Request a demo to learn more.