Construction Industry Economic Outlook

“They’re no longer lollygagging when it comes to committing to projects…” That’s one of the first economic indicators a Canadian construction CEO noticed in 2022. This year the construction industry will see a year of rebuilding, reorganizing, and recommitment to the future. Challenges and opportunities.

Construction Industry 2022

Pricing continues to be a shot in the dark as supply chain and materials remain unknowns. And then there’s COVID – whatever variant – causing jobsite stress and adding to the labor shortage. All that aside, you have to admit: It’s beginning to feel like “normal” again.

Ken Simonson of Associated General Contractors of America says he’s “nervously optimistic.” Materials lead times seem to be shortening and nonresidential construction is looking up. But vaccine hesitancy among construction industry employees means more downtime and greater severity of COVID’s symptoms for workers.

Inflation’s almost stunning rise might benefit the construction industry. It’s sad but true: As more people have difficulty paying their bills, more people will return to work. Pricing uncertainties are pressuring developers to sign contracts sooner, rather than later.

“People are starting to think that if they wait, they may miss the right opportunity to build their project,” said Deron Brown of PCL Construction.

The Three Ps of Construction

People, prices, and productivity will dominate the construction industry in 2022. U.S. manufacturing is returning home, as overseas manufacturing exacerbated an already problematic supply chain.

Another concern is hoarding by construction companies. The supply chain snafu and materials shortages led to a Depression-era mentality; many are buying what they can, as much as they can, and filling their warehouses “just in case.”

In 2016, a report was released on what people “really want” in residential construction. What people want will always drive commercial and residential construction, especially in 2022. What do you want to achieve this year? If it’s more like making history rather than watching others do it, you’ll need business-building processes. We’ve got some ideas for you.

Call 435-586-1205 or contact Construction Monitor.

Help Wanted: Construction Labor 2022

Construction Labor

The construction industry may be sailing into “the perfect storm” this year. A combination of factors may impact construction labor in 2022. Construction Dive says, “From a huge influx in public spending…vaccines…and continued social changes, here are the top trends impacting construction labor in 2022.”

Construction Labor Trends To Watch

We’re wooing high school seniors in an effort to flip negative perceptions about careers in skilled trades and construction work. This is not the kind of process that delivers immediate results. In addition to recruiting, cultural awareness will be key to every company’s ability to get and keep talent.

Attitude Adjustments Are Critical

Workers need to feel valued. It’s time to stop joking about it and become the flagship for a changed environment in-house. Otherwise, you’ll be good-old-boying and laughing all the way to bankruptcy.

Employees want steady, good-paying jobs. They also want respect, women and minority initiatives, and a culture that values them and their families. They want a career with a future. Construction labor will take lower-paying work closer to home. Maybe jobsite transportation is something to consider. Childcare and family day programs are in your future (and the future is now).

More Work, More Challenges, More Vaccination Confusion in 2022

The $550 billion earmarked for infrastructure improvements will call for even more workers, exacerbating the construction labor shortage. Wages may increase. Public projects will take priority and pay more, so private projects may drop off the radar.

There will be even more pressure for unvaccinated workers to get vaccinated. The confusion about regulations continues despite January 13’s Supreme Court ruling blocking the vaccine-or-test mandate for large employers. Construction managers “find themselves between a rock and a hard place as they try to facilitate the discussion between their workers,” said Construction Dive. Watch for public – and some private clients – to attempt enforcing their own vaccination requirements in 2022.

One thing we want to see this year is more work. Construction Monitor is the number one source for generating leads based on building permit data. This year, build your business and start by contacting Construction Monitor.

Multifamily Construction in 2022

Multifamily Construction

The pandemic put most companies in jeopardy and almost every industry took a beating. Except multifamily real estate. Sometimes more is more: Rent and valuation growth are factors leading to increased multifamily construction development in 2022.

Multifamily Construction In-Demand

Economic situations led to almost double 1Q 2021 demand for rentals followed by record-high rent increases in 3Q 2021. It’s anticipated rent growth will be moderate in 2022 and rent control legislation will impact several areas of the country. For example, St. Paul, MN voted to cap rent increases at 3% annually. Rent control legislation is under review in other states, including:

  • Colorado
  • Florida
  • Illinois
  • Kentucky
  • Massachusetts
  • Nevada
  • Pennsylvania
  • Washington

…and more.

“Right now, the number of investors in the market far outpaces the number of (multifamily) properties for sale,” says business reporter Leslie Shaver. A leading apartment-owner organization that purchased 14 properties before 4Q 2021 was only able to complete one purchase in the fourth quarter. The lack of supply and increase in demand is pushing prices up, plus zoning restrictions further complicate multifamily construction development.

7 Trends In Multifamily Construction

Multifamily construction growth should remain stable, says buildcentral.com. Watch for these trends to impact how we build apartments and other multifamily housing projects:

  1. AI – Building contractors must utilize smart-home technology in security systems and “lifestyle efficiency.”
  2. Amenities – Competitive multifamily housing communities will have gyms, spas, pools, fiber internet, recycling facilities, and more.
  3. Competition – Look for Amazon and other warehousing/purchasing companies to aggressively compete for multifamily construction space.
  4. Multifunctionality – Smaller and more affordable housing must offer better, more technologically advanced usage solutions.
  5. Risks – Trade tariffs, supply chain disruptions, “and a dire shortage of qualified labor” will continue to plague our industry.
  6. Sustainability – LEED (Leadership in Energy and Environmental Design)-certified construction and “co-living,” in which renters utilize shared spaces will drive multifamily construction even more.
  7. Technology – Electric car charging stations and disruptive technology (rideshare apps, etc.) should be included in multifamily units.

You’ll make better construction industry-related business development and marketing decisions when you have the information you need. To learn more about construction developments in your city or town, contact Construction Monitor.

Building Our Industry: Small Awards Can Provide Huge Incentives

construction industry

Only 16.7% of Zoomers (Generation Z; those born between 1981-1996) have expressed interest in construction as a career path. Internships are one way to address our biggest workforce issue (no workforce). Plus, internships can reinforce our biggest draw: Becoming an apprentice in the construction trade means you can earn while you learn.

You don’t have to be a Fortune 500 industry leader or a state governor to create and award scholarships. Something to consider for 2022 and beyond is creating a brand scholarship for one or more high school seniors.

A brand scholarship is used by many organizations as an advertising tool. In a local, community-oriented setting, a small financial award is also good advertising, but in our situation, it’s a way to guide talent toward construction industry companies – like your company.

In 2021, South Carolina Governor Henry McMaster targeted $17 million for construction industry-related education. Workforce Scholarships for the Future offers scholarships that cover the cost of tuition and fees for students attending any trade school or technical college in the state. The scholarships are available to South Carolina adults and recent high school graduates. The scholarship requirements include:

  • Completing 100 hours of voluntary time to nonprofit/public-service organization or employment or taking one financial literacy course plus
  • Maintaining a 2.0-grade point average (GPA)

Construction-related scholarships could include:

  • Carpentry
  • CNC machining
  • Drywall
  • Electronics
  • Fabrication
  • Industrial/professional painting
  • Masonry
  • Pipefitting/welding
  • Plumbing
  • Robotic & electronic engineering technology
  • Robotic/laser welding
  • Roofing
  • Sheet metal machining
  • Welding/boilermaker training

…and more

In addition to construction careers, the South Carolina Workforce Scholarships can also be used for associate degrees and certification credentials for other in-demand careers:

  • Automotive technology
  • Biomedical
  • Computer science
  • Healthcare/EMT
  • Information technology
  • Iron/steel technology
  • Manufacturing
  • Medical
  • Transportation distribution/logistics

…and more.

Construction Dive Associate Editor Zachary Phillips said, “The demand for construction workers has escalated for decades, and it has gotten to the point where some contractors, subcontractors, and suppliers will hire just about anyone with a good attitude.”

A good attitude among employees is essential when growing a successful construction business. But we need educated, skilled workers that take pride in what they do. Education is key to building our workforce.

Education is also vital to building business. If you want to learn about the educational tools available to you as part of Construction Monitor’s weekly data analytics, call 435-586-1205 or contact Construction Monitor.

11 Ways the Cloud Manages, Modernizes Construction Costs

construction costs

Operating costs are a fact of life for construction business owners. And just as we begin to embrace one technology for managing construction costs, another technology becomes more viable. Cloud capabilities for managing construction costs have many advantages.

  1. Application integration – You go one place for one piece of data but somewhere else for another piece of information. APIs (application program interfaces) pull it all together.
  2. Asset recovery – Automatic GPS tracking alerts you when equipment goes off-route or is stolen.
  3. Better bidding/budgeting – Cloud BIM (building information modeling) software integrates parts and materials data for more exact/accurate estimates.
  4. Data organization – Most of us have tons of data, all over the place. Using cloud management, you can sort, organize, timeline, and analyze data so your information is current and accurate.
  5. Digital communications – Project managers continue to print documents to take to the jobsite every day. And if the paperwork is misplaced, skilled employees are sent to the office for reprints. Not only will you better-manage time and resources, but you can also make data-driven decisions based on real-time information.
  6. Enhanced mobility – Of course your phone is a lifeline. But cloud services offer document and design storage, real-time collaboration across jobsites, and more.
  7. Materials tracking – Knowing exact inventories is a construction costs edge but even better is a service that predicts supply chain problems before they occur. You can order before competitors realize it’s too late.
  8. Pay-as-you-go – Autoscale your workload.
  9. Predictive maintenance – Cut down downtime by accurately monitoring machinery and equipment.
  10. Shorter project lifecycles – You’ll save time with cloud-based real-time information.
  11. Skilled worker time-tracking – Ensure your vital, skilled talent is maximizing time effectively, performing critical tasks.

The Construction Monitor blog is for information only. No software brand is recommended nor endorsed (except our own). We don’t sell software, but we’ve got the software you need. It sorts building permit and solar information into usable, actionable information specific to your needs. Contact Construction Monitor.

Is It Time for Construction Companies to Rethink Business Travel?

Rethink Business Travel

Business travel for construction companies has changed in 2020. We couldn’t hop on a flight or drop-in anywhere without masking, social distancing, vaccination-proving, and concerns. The pandemic will eventually be over but there are threats of other contagious diseases for 2022. Virtual meetings and Zooms – things we did because we had to in 2020 – may have been the clue it’s time to change many ways construction companies work.

We need to rethink how we conduct business travel.

Digitizing Travel Technology for Construction Companies

All construction professionals can’t work virtually. You might be able to 3D-design a project, but you can’t rig the scaffolding or inspect the drywall without using your hands.

Travel expenses are higher for most construction companies because you can’t plan for unpredictabilities. You pay more when you don’t have time to plan ahead. Without the luxury of advanced planning, “Airline fares are typically higher for (workers in the construction industry),” said one travel professional. Construction companies pay 20% more for business travel than other industries.

Construction travel involves entering information into spreadsheets plus travel expense tracking and reporting by auditors and accounting. The average is 13.6 hours per trip just to process and document travel. Digitizing business travel can save time and money.

How To Leverage Technology for Business Travel

Digitizing…means eliminating things like paperwork and manual data entry…using online platforms that modernize and automate travel processes to help you get the most out of the travel dollars you spend.Industry Dive

Yes, we’re singing the software song again. You can DIY (do-it-yourself) or retain an agency to manage it for you. Leveraging travel technology for construction companies should include:

  • Allowing managers to book for employees or employees to book for themselves, even from the field
  • Benchmarks
  • Data from customizable, real-time reports so you can negotiate greater savings with hotels/airlines
  • Detailed information about unused tickets/travel credits, etc.
  • Device-friendly/easy use and easy/efficient implementation
  • Measurable ROI (return on investment)
  • Powerful dashboards, analytics/reporting
  • Flag employees that need travel policy attention/training
  • Request-a-call option to connect with a travel agent without “hold” time
  • Risk-management tools
  • Visibility to see how many employees are traveling at any time
  • Vital information in one place: job costing based on travel cost reports

Our building permit software saves time and money by streamlining your marketing potential. Contact Construction Monitor.

Construction Industry Disputes: How To Avoid Them

construction industry disputes

When the global consulting firm HKA released a report analyzing construction claims and disputes, many knowledgeable construction industry leaders were stunned. CRUX Insight is an annual publication and was released 3Q 2020. It reports “colossal costs lost to construction claims and disputes.”

Causes of Construction Industry Claims, Disputes

The analysis revealed “eye-watering sums of money and time being lost, as well as the patterns of root causes.” Information was obtained from the Americas, Africa, Asia-Pacific, Europe, and the Middle East. The leading cause of construction industry claims and disputes is design issues.

The report said “fast-track construction” is putting pressure on the design phase. The fast pace often compromises project control. “More investment in up-front planning, design and coordination is imperative, along with smarter procurement and more balanced risk allocation.”

Inadequate contract management might be contributing to design problems, according to Construction Dive. The top causes of claims and disputes in 410 North, Central, and South America projects were:

  • Access to project site restricted
  • Adverse weather conditions
  • Changes in scope
  • Claims – “Spurious, over-inflated, opportunistic and/or unsubstantiated.”
  • Contract mismanagement
  • Designs
    • Incomplete
    • Incorrect
    • Late
  • Failure to anticipate physical conditions
  • Installation failures
  • Subcontractor mismanagement
  • Supplier/third-party interfaces mismanagement
  • Workmanship deficiencies

The pandemic and shaky markets, trade tensions, supply chain issues, and the shortage of skilled administrative talent all currently challenge the construction industry. Internationally, change in scope, design, and poor subcontractor management were leading causes of construction industry claims and disputes.

5 Ways To Reduce Claims and Disputes

Construction industry writer/editor Julie Strupp offers five recommendations to reduce project claims and disputes:

  1. Allocate adequate design resources/set realistic timelines. 
    • Ensure stakeholders are involved in a design review process. 
  2. Assign risk management to appropriate personnel. 
  3. Develop/implement a project execution plan with buy-in from the client and supply chain. 
  4. Don’t rush Requests for Proposals (RFPs).
    • Wait until the design is reasonably advanced, so timeframe/costs are more reliable. 
    • Weigh factors such as experience/expertise, quality/price to gauge bidders’ true value. 
  5. Promote transparency among all parties.
    • Promptly communicate/resolve issues.

Ask questions to lessen mistakes in construction projects. When you know more, you make better choices. Construction Monitor is the best project lead-generating service. Ask us.

COVID Vaccine Mandates Problem or Protection?

COVID Vaccine Mandates

It’s confusing on its best day. The construction industry is promoting COVID vaccine policies for all workers. But the Occupational Safety and Health Administration is mandating vaccinations, and that isn’t sitting well with many construction companies. Employees must vaccinate or prepare to test weekly by January 4, 2022.

OSHA’s COVID vaccine mandate would make all businesses with 100+ employees face fines for violations. The proposed maximum penalty is $13,653/violation and “willful or repeated violations” at $136,532 or less per violation.

Most opponents contend the OSHA vaccine mandate:

  • Exceeds CMS’s (Centers for Medicare & Medicaid Services’) authority
  • Violates 42 U.S. Code 1395; “…to exercise any supervision or control over the practice of medicine…”
  • Violates APA (Administrative Procedure Act) and is “arbitrary and capricious” under the APA
  • Violates the CRA (Congressional Review Act)

Construction industry-related organizations, including:

  • American Road and Transportation Builders Association
  • Associated General Contractors of America
  • Signatory Wall and Ceiling Contractors Alliance

…filed a petition for OSHA to review the mandate. The contention is it will cause employers to lose employees in what is currently a labor shortage.

In addition to construction industry-related organizations, several states are filing suit. States protesting the mandate include:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • Florida
  • Georgia
  • Idaho
  • Indiana
  • Iowa
  • Kansas
  • Louisiana
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Hampshire
  • North Dakota
  • Oklahoma
  • South Carolina
  • South Dakota
  • Texas
  • Utah
  • West Virginia
  • Wyoming

November 2021, Georgia governor Brian Kemp said the mandate is an unprecedented and unconscionable use of power by a president that will cripple Georgia’s economy. Georgia Agriculture Commissioner Gary Black said, “If the rule of law prevails, Georgia’s economy will be stable.”

Construction Monitor Customers

Who uses the software services Construction Monitor provides?

  • A few power-hungry startups seeking alliances, partnerships, and competitors’ information receive weekly reports.
  • A food truck service mapping its citywide service to construction sites.
  • A small business in Ohio with fewer than 40 employees utilizes our mass-mailing service.
  • Some international organizations seeking to develop U.S. areas of opportunity use our real-time leads.

The fact is, if you’re in any business in the U.S.A., we likely have information that would benefit your company. Ask us. We’re marketing pros with ideas we’re eager to share. Contact Construction Monitor.

Construction Business Excavations and Underground Utilities’ Inefficiencies

Construction Business Excavations

In 2005, the Call Before You Dig awareness campaign officially adopted 811 as the universal number for consumers to call to request information about utility lines on properties. Construction business owners are diligent about this, but the system’s failures have come home to roost.

There are more than 100 billion feet of underground utilities in the U.S., which means there’s over a football field’s length of line per person.Pipesy.com

The Infrastructure Protection Coalition completed a study to determine issues and solutions to revamping underground utility systems. Clearly, the marking and reporting system isn’t working as-is.

The inefficiency and waste cost utilities customers and construction business owners a whopping $61 billion per year. This is in addition to the $30 billion annual out-of-pocket costs directly due to underground utilities’ damages. An underground utility line is damaged every six minutes nationwide.

“Surprise” is not a strong enough word.“Shock” is the appropriate word.
Mark Bridges, Continuum Capital

  • In addition to the monetary loss, the lack of efficiency in underground utility systems poses health and safety threats.
  • The location markers identification system is a big factor in mistakes made during underground excavations. Markers were often lost or destroyed.
  • Utilities’ personnel were frequently given poor instructions for projects that might or might not happen.

Over a 3-5 year timeframe, the solutions would cost $1.2 billion and save about $30 billion:

  • A third-party enforcement board will deal with issues.
  • All asset owners, operators, and other personnel must enroll in the 811 system with no exemptions.
  • All parties (asset owners, excavators, locators) will manage similar risks so the penalty structure is more balanced.
  • Dig laws revised so all underground utility damages must be reported.

The Ultimate Lead Source

Building and solar permit information drive our industry and every size construction business. Construction Monitor is truly the ultimate lead source for key project data to help suppliers, subcontractors, building professionals, and general contractors to better target and reach new customers. To learn more about developing a marketing program for your construction business, contact our professionals.

New and Improved Construction Industry Bidding

construction industry bidding

If you google “construction bidding,” you’ll get more software hits than Heinz has pickles. And that’s okay. Software is leveling the playing field for construction’s small business owners that want to win profitable jobs by making the most cost-effective bids.

But if you’re a drywall contractor, do you really need to use the same software as an electrician? You’re factoring the cost of gypsum plaster and plasterboard with a high R-value to meet contract requirements for a building with 120 studio apartments.

Often, by the time the project needs drywall, it’s already behind-schedule and over-budget. No pressure.

Construction bidding has to be more precise because material costs are more expensive and unpredictable. Try factoring unpredictability into a math equation and you’ll see why software is your best friend.

Contractors’ Construction Industry Bidding Software

It’s frustrating – for all of us – when your basic bidding software is already obsolete. But these are complicated times, and you need to be able to affordably and profitably price complicated projects.

Software Advice rates 57 construction bidding management programs. In order of recommendation, the top 5 are:

  • CoConstruct
  • Pipeline Suite
  • B2W
  • BuilderTREND
  • Contractor Foreman

One of these software companies added a bid management feature that allows you to sort project bids by phases. They say it’s “one-of-a-kind and exclusive.” The word “revolutionary” also comes to mind.

Your construction bidding software can:

  • Bid project phases
  • Conceal various subcontractors’ quotes
  • Dashboard prior bids or bid phases
  • Have separate bid dates per bid submission
  • Include trade-specific wording
  • List separate project contacts for each bid package
  • Rebid faster

One company’s example was:

Let’s say you’re sending a Bid Invitation with special invitation verbiage for electrical subs and different verbiage for others. And you have some files that you only want some Bid Packages and subcontractors to see. And you’d also like to assign a project contact for each Bid Package…in a few weeks, you want to rebid the whole thing in one click and track the history…No problem.

Construction Monitor’ blog provides information only. No software brand is recommended or endorsed (except our own). For information about the software that generates profits, contact Construction Monitor.