Numbers Reveal Construction Industry Trends & Issues

Construction industry statistics from 2017 reveal future issues and trends to watch.

A picture is worth a thousand words, but statistics are also compelling — especially in an industry that’s driven by numbers. The following numerical data, as reported by Construction Dive, are based on a recap of 2017; they are noteworthy in billboarding the near future for construction.

$1.6 trillion — The opportunity cost, according to McKinsey Research, of the construction industry’s hesitation to adopt new technology. While new technologies are making inroads in the construction market – drones, and high-tech, virtual reality  & AR wearable devices – the industry remains somewhat old-school and slow to adapt, thus missing opportunities to grow the market.

$200 billion – According to Moody’s, the estimated damage from Hurricanes Harvey and Irma that ravaged Texas and Florida this year. The stat is a strong argument for resilient design and planning for extreme weather events and rising sea levels.

Key West, Florida, underwater.

$5 billion — The amount of money Amazon is planning to put into its second headquarters (HQ2) building, location TBD.

1,200 — The number of concrete buildings that fall under Los Angeles’ seismic retrofit ordinance, which is the first of its kind in the country. Another tale of governmental policies that are shaping the construction industry and driving resilient design standards to ensure public safety, while protecting property owners’ investments.

76 — The percentage of U.S. construction companies that indicate the tight labor market will stay the same or worsen throughout the year. This statistic, unveiled by the Associated General Contractors of America, bodes well for next-generation practices such as off-site construction, prefabrication and modular assembly, that have proven to help mitigate the industry’s persistent skilled labor shortage.

56 — The average age of the more than 90,000 dams in the U.S. The Association of State Dam Safety Officials estimates the necessary work on the country’s non-federal and federal dams would cost more than $64 billion.  Now there’s a construction market opportunity!

3 — The number of months it took to 3-D print a 26-foot-long concrete bridge in the Netherlands comprised of 800 layers of reinforced, pre-stressed concrete material. 3-D printing and comparable new technologies are changing the building industry.


Construction Trends for 2018

More offsite construction and increased use of modular components are two trends anticipated in 2018.

After a robust 2017, commercial construction companies are anticipating an even stronger 2018. Trends for this year, include a continuing rise in offsite construction as well as increasing reliance on technology. Another emerging phenomenon is the increased focus on resilient design following the most destructive hurricane season on record and devastating fires and mudslides in California.

Other trends that will likely shape construction this year revolve around federal and state policies, the ongoing labor shortage and anticipated mega projects such as Amazon’s much-ballyhooed HQ2. Construction Dive identified what the editors see as the top eight trends for the coming year, and here they are:

Resilient Design

The focus on strengthening structures is driven by the disastrous weather events of the past year. Hurricanes, heat waves, cold waves, flooding, tornadoes and wildfires took their toll, with a nationwide financial hit estimated at $400 billion.

Rather than constructing duplicate replacement structures, more property owners will likely demand resilient site and structure features, heeding the advice and support of organizations such as the U.S. Green Building Council. New projects are likely to mimic resilient construction that is already underway, such as re-evaluating building codes and redefining flood zones in Florida and Texas and fire-resistant construction in California.

Labor Shortages

The construction industry will continue to grapple with a tight supply of skilled craft workers as younger individuals shun construction as a career option, baby boomers retire and the federal government reverses the tide of immigrant labor from Mexico, Central America and the Carribbean. With industry groups continuing to lobby lawmakers for funding for trade education programs to help create a construction industry labor pipeline, these efforts could pay off and help ease the problem.

Meanwhile, the industry is turning to alternative construction methods to compensate for the shortage of skilled labor. Offsite construction and prefabrication, for example, are helping mitigate some labor issues, often reducing labor demands by as much as 50%.  Increased use of modular construction in 2018, could also reduce the need for additional workers.

Offsite Construction

A growing number of U.S. contractors are partnering with prefab companies to incorporate offsite construction into their operations. Suppliers, too, are building up offsite capacity and developing products to help streamline operations. With companies like Google, Autodesk, Marriott and Starbucks embracing offsite construction, so are investors who hope offsite will improve construction industry productivity and returns.

As offsite components increase project speed, they are leading to greater collaboration between general contractors and offsite fabricators. With large companies like Turner Construction and Gilbane adding project manager roles for offsite, this delivery method is projected to gain momentum.

Transportation Investments

Cities are making big investments in transportation, integrating it into other public infrastructure upgrades. Nashville, TN, for example, proposes to spend $5.2 billion on an infrastructure and transit plan. Minneapolis’s $1.9 billion Southwest light-rail and Boston’s $2.2 billion overhaul of the area’s Green Line light rail are two other notable investments in transportation systems. In addition to traditional rail and bus systems and tunnels, high-speed maglev trains and hyperloop systems are also trending.

Technology and Automation Advances

Automation and related technologies such as 3-D printing are changing construction practices dramatically. Consider Europe’s first 3-D printed building in Denmark, a 3-D printed concrete bridge in the Netherlands, and the 3-D print concrete turbine towers planned in California.

According to Construction Dive, construction technology was the “Trend of the Year” in 2017. It’s not going away; in fact it looks to be ramping with factory-based construction automation and standardizing design and construction, creating a continuum of services.

New Policy Regulations

New policies at the federal and state level will continue to shape the industry. New York City now requires construction workers to undergo at least 40 hours of safety training. Los Angeles instituted a new seismic retrofit ordinance that will impact an estimated 1,200 older concrete buildings. As always, policies and politics will impact the construction business.

Large Companies with Large Construction Projects

While last year saw the addition of new, high-tech campus facilities at Google and Apple, a second new North American Amazon headquarters complex will likely fuel increased momentum for similar expansions in 2018.

Microsoft is slated to begin a multi-billion-dollar redevelopment of its existing Redmond, WA, campus later this year; Marriott and General Electric are also expected to break ground on new headquarters developments.

As more firms continue to expand their facilities, many are also likely to add infrastructure needed to support their operations. Data center construction is an especially fast-growing sector, as companies amass unprecedented amounts of information. By the first half of 2017, data center investments had already doubled those made in 2016, coming in at $18.2 billion.

Augmented & Virtual Reality — Wearables and Drones

With mixed-reality headsets, such as Microsoft’s HoloLens, and wearable devices, such as Triax’s  Internet of Things-enabled sensors, high-tech wearables and both augmented and virtual reality will continue to make inroads, transforming job sites. Two of the greatest benefits these technologies offer are safety and efficiency — areas where the construction industry has struggled in the past.

Beyond the innovations and investment in con-tech, it’s also possible that technology will help attract younger workers who are captivated by the technology in-roads impacting construction, such as the increasing use of drones on survey sites. One thing is certain: the industry buzz can’t hurt.


The ROI on Mobile Construction Apps

Mobile construction apps are emerging as a valuable resource offering a significant return on investment in terms of benefits to overall productivity, risk mitigation, as well as savings from labor costs, downtime, and schedule acceleration.

We all know that technology is trending in every sector of the construction industry with companies deploying a wide range of cutting-edge technologies across a project lifecycle. Drones and building information modeling continue to be the rage, but mobile construction applications are the latest tech revolution in the industry.

Although technology and software are prevalent in construction, the industry continues to suffer from persistent challenges, such as skilled-labor shortage, fragmented teams, high competition, tight margins, and increased risk—all of which can be mitigated by increasing productivity. Traditional construction software has not solved the industry’s productivity problem however, whereas mobile technology software tackles some of this challenge including saving time on labor and rework issues.

A new ebook — “The Dollars and Sense of Mobile Construction Apps” — published by PlanGrid, provides insights into this fast-emerging digital transformation. It provides an overview of the bevy of mobile construction apps that can not only reduce risk, but help construction professionals maintain their bottom line while facilitating communication and document sharing with teams in the field and the office. There is a mobile app for just about everything now, from productivity to project management, reporting, and on the job safety.

The book is a valuable resource with strategies to encourage adoption of new mobile technology into your organization, as well as how to calculate the return on investment construction companies can expect from mobile technology. Like what could a team achieve with 5 extra hours a week? Or how much could you save by finishing a project early?

While mobile construction technology is an expense, the potential return is huge in terms of benefits to overall productivity, employee/client satisfaction, and risk mitigation, as well as a tangible return in savings from labor costs, downtime, and schedule acceleration.


Sto EIFS & Element Music Row Featured by EIMA

The new Element Music Row -- a luxury apartment high rise in Nashville -- used StoTherm ci Essence to ensure the building's energy efficiency.

One of Sto Corp’s signature exterior insulation finish projects is now being featured as a case study on the EIMA website.

Last year, working with Southern Wall Systems and Humphreys & Partners Architects, Sto helped incorporate a continuous exterior insulation system, and a continuous air and moisture barrier with high-performance finishes to protect the new Element Music Row highrise in midtown Nashville. The $100 million luxury apartment complex, is a 19-story, 431-unit building located in the heart of the country & western music capital of the world. The upscale new residence offers commanding views of downtown Nashville and easy access to all the shopping, dining and entertainment on Music Row.

StoTherm ci Essence – a decorative and protective exterior wall cladding that combines superior air and weather tightness with excellent thermal performance and durability – was the wall system of choice for the new structure, ensuring the building’s energy efficiency, aesthetics, and air-moisture control. Because of the inclusion of Sto products and other energy saving efforts, the developers are showcasing the building as a model “green living” environment that is, in fact, LEED certified.

The Element is located on Demonbreun (pronounced de-MUN-bree-un) Street in Nashville – an area that has become a symbol of urban revitalization for the music capital and a favorite venue for the city’s young, plugged-in professionals.  Private development is booming in the area, and developers like Element’s Childress Klein out of Charlotte, N.C. are looking to build upscale living spaces, Class A office buildings and tourist destinations.

For more information:

 


The Changing Face of Construction Engineering — Part Three

Panelization is revolutionizing the construction and engineering landscape today, saving time and money.

In this final post of our blog series, we reiterate and summarize the benefits of prefabrication and specifically the rise of panelization. We also offer an overview of what to look for if you want to incorporate these “manufactured” panel solutions into your construction and engineering plans.

Pre-Fab Manufacturing Can Mean Faster Build Times

A systemized approach to panelized construction can offer many benefits over traditional precast panels, including speed, value and superior performance. There are lightweight, energy efficient, durable panels available today from panel producers from a network of panelizers/fabricators such as those associated with Sto Panel Technology. These are available in a wide variety of aesthetic options for new construction or renovation.

Building envelope installation-time can be greatly reduced using prefab wall panels. The reason? Fast-track, systemized panel manufacturing can occur simultaneously with site prep and construction, with fewer delays due to weather and faster installation times.

Reduced Project Costs

By eliminating scaffolding and other complications of working at high elevations, prefab panels can also help reduce jobsite labor requirements and crew sizes along with the associated risks.  Lightweight panels can also lower structural requirements, drywall furring, boxing, strapping and various costs related to doing it “the old-fashioned way.” Since the shortage of skilled labor is one of the biggest issues in commercial construction today, any labor-saving innovation such as reduced on-site craft work can add value.

Ensure Quality Control, Compliance and Energy Efficiency

In pursuing a panelization solution, make sure your vendor’s output is in full compliance with codes for testing, building and energy efficiency. Sto panels for instance, have ISO-engineered components and offer superior fire, and thermal performance with industry-leading warranties. If you’re adopting this technology, look for products that offer extensive architectural and finish options. With the factory application of materials, you can count on a consistent, high quality finish that will last.

The beautiful, new Aloft / Element Hotel in downtown Austin, Texas was a StoPanel project  with panels engineered and manufactured by Baker Triangle Prefab in partnership with Dri-Design. The 34-story building represented a design and construction challenge due to the restricted access to the site and non-existent lot-line. The results speak for themselves.

The beautiful, new Aloft / Element Hotel in downtown Austin, Texas was a StoPanel project with panels engineered and manufactured by Baker Triangle Prefab in partnership with Dri-Design. The 34-story building represented a design and construction challenge due to the restricted access to the site and non-existent lot-line. The results speak for themselves.

Over the past few years, leading building material manufacturers, such as Sto, have partnered with regional affiliates (leading contractors and fabricators) that are independently owned and operated, ensuring high-caliber products and solutions in every major construction market. Sto, in particular, has a network of 24 affiliates (19 in the US; 2 in Canada; 3 in South America) that are developing common processes and best manufacturing practices while adding panel components that put Sto Panel Technology on the leading edge of building design.

By specifying a single, versatile prefab panel with the option of utilizing virtually any desired finish — from brick and natural stone to the most modern, light-weight energy-efficient coating systems — owners and designers now have the freedom to choose the look they prefer while meeting the schedule and performance requirements the GC/CM desires at a price every owner will find attractive.

Exterior insulated wall systems that are engineered, fabricated, shipped and installed can be a competitive differentiator, saving time, adding value and improving quality. These prefab solutions and other offsite building processes are in fact transforming the construction industry and promise to continue doing so.

 


The Changing Face of Construction Engineering—Part Two

A primary benefit of offsite work or pre-construction engineering is that onsite construction can take place concurrently; with more fabrication accomplished offsite, the more time can be saved on site.

In this three-part blog series, we are continuing to explore how design and construction processes are changing and how prefabrication solutions are increasingly being adopted in commercial construction. This is primarily because in today’s labor-constrained construction environment, prefab helps reduce costs and meet demanding construction schedules.

Glossary of Terms

Three terms are typically used to describe structural components that are not built on a traditional job site: offsite, prefabricated (prefab) and modular. They are similar, yet, in some ways, different.

Offsite: Offsite construction refers to any building process that takes place away from the ultimate point of installation, and the term includes both prefabrication and modular construction.

Prefabrication: The term prefabrication refers to the practice of assembling building systems and components before incorporating them into a structure. Window and wall assemblies have been prefab construction staples for quite some time. Panels such as those manufactured by Sto and its affiliates are gaining traction. More recently, MEP (mechanical, electrical, plumbing) racks, have been the rage. These are corridor-length panels that are pre-wired and pre-fitted with ductwork and piping to make connections neater and faster for the relevant trades.

 Modular: Modular construction is a form of prefabrication and most often refers to complete rooms or sections of a building — such as bathrooms, kitchens and hotel rooms — that are built in a factory.

One of the primary benefits of offsite work or pre-construction engineering is that onsite construction can take place concurrently. The more fabrication that can be accomplished offsite, the more time can be saved on site.  It is estimated that working offsite with other subcontractors to assemble multi-trade racks can reduce onsite skilled labor requirements by as much as half.

Industry at a Tipping Point

Aside from the advantage of being able to work parallel to ongoing job site processes, prefab and modular construction can allow for:

  • A safer process. Common job site dangers can be diminished on a controlled, well-supervised factory floor.
  • No weather delays. Offsite construction is usually performed inside, so work doesn’t have to stop because of inclement weather.
  • Consistent quality. Working in a centralized location allows for closer supervision and quality control.

As previously noted, offsite construction may also mitigate the skilled labor shortage currently plaguing the construction industry nationwide. An Associated General Contractors survey at the beginning of 2017 found that 73% of construction companies anticipate having trouble finding enough skilled workers and yet that same 73% also expect to have more work this year. Any offsite construction processes that can take the pressure off contractors, who are scrambling to find enough labor to manage current loads, could offer some relief.

It would appear that prefab solutions can in fact impact a project’s bottom line and can be a competitive differentiator. Those who embrace it may be best-positioned to excel in the built environment of today and tomorrow. To learn more, be sure to read Part 3 of our series next week.