The 6 trends to watch for in the construction industry in 2023
From new construction modes to continuous inflation, which trends are going to shape the construction industry in 2023? While the general market is doing relatively well, the increasing pressure of competition is putting everyone to the test.
To make sure your company remains at the top, here are 6 trends to watch for in 2023.
1. Continuous labor shortage
While labor shortage is nothing new in the construction industry, this trend looks like it is about to stay in 2023.
In the 2023 edition of Deloitte’s survey among American construction companies, 82% of the respondents have mentioned a tight labor market, revealing complex challenges. And it is no different in Europe. The pressure to attract and retain qualified workforce is stronger than ever, leading companies to rethink their employment strategy.
How to face this construction trend?
The first part of facing this trend would be to understand it. Why are workers more inclined to shift workplaces? Several factors need to be considered.
First, we live in a data-driven world that has made us more informed than ever. This is also true regarding other companies’ job offers and work conditions. Workers have more cards in their hands when looking for a better position elsewhere. Meanwhile, workers are paying more attention to the balance between their work life and private life. The emotional attachment to their company is not enough anymore. The construction industry is well known for its difficult working conditions, so there is a real challenge in retaining talents.
To succeed in this “talent war”, there are several keys to leverage. It is both about attracting new talents and retaining the ones you have.
Of course, a competitive salary is an absolute must if you want to retain your qualified staff. Facing inflation, workers may not have any choice but leave if the paycheck is not reflecting their skills. However, it is not the only factor.
Improving working conditions and safety in the workplace is also of the essence. Besides, investing in your existing staff through training is a great way to offer career perspectives while benefiting from a more qualified workforce.
When trying to draw in new talents, employer branding has a key role to play. If your business is innovation-driven and you provide fantastic career paths, you better make sure people know about it. Encouragement of inclusiveness in the sector is another important factor. Attracting women in the industry is now a priority and will continue to be one.
2. Inflation, rising costs and supply chain
More than the covid pandemic, the construction industry had to face another crisis this year. The explosion of material costs has been a real concern for the past few months, and it is far from over.
How to deal with this trend?
While companies don’t have any control over the surge of prices for critical materials, the inflation taught them a valuable lesson: “expect the unexpected”.
This translates in adapting bids and contracts with special clauses, aimed at providing wiggle room in order to stay in line with the reality of the market.
Adapting the final price cannot, however, be a stand-alone solution. More and more companies are improving their supply chain policies, working with multiple material suppliers, or making sure they are close to their main suppliers in order to reduce delivery times and the risks of delays.
This material costs crisis has reminded us of the importance of a strong bidding strategy, based on up-to-date data and a rigorous forecast of both productivity and expenses. It’s all about offering competitive prices while protecting your profit margin.
3. New construction modes
While the construction workplace is known for being more physically challenging than most, new construction modes can be part of the solution.
Modular and prefab construction allows for the structure of a nearly finished building to be built off-site, and then placed and assembled on the construction site.
Off-site construction is rapidly gaining in popularity, as the global modular construction industry is predicted to reach $141.80 billion by 2027.
Another game-changing technology for the building sector is 3D printing.
Due to the increasing global need for low-cost construction solutions, the technology is finally reaching its maturity and offers significant benefits for reducing labor and material costs.
3D printing has a bright future and is anticipated to generate $63.36 billion by 2026, growing at a CAGR of 29.48% between 2021 and 2026, from printing materials to producing whole buildings.
How to face those market forecasts?
These new construction modes show us how crucial is it to anticipate new innovations, especially those likely to improve on-site working conditions.
Whether you are directly involved in modular manufacturing or not, keeping your mind open to innovation is more essential than ever if you want to keep ahead of the game.
4. Digital technology expansion
Among new technologies, digital innovations have made a place for themselves among the construction industry these past few years.
Building Information Modeling (BIM) is one of the most renowned digital technologies. However, it is not the only one making a difference. From Virtual Design and Construction (VDC) to resource management software, digital technologies are making teams more effective, both on- and off-site.
Some innovations are pushed by an increasingly strict legislation. Controls over the respect of workers’ social rights are increasing worldwide, with the intent to fight against social dumping and unfair competition. In response, construction companies have massively invested in digital tools for on-site presence control, or the management of administrative documents.
Another incentive for going digital is the search for greater productivity. Because they reduce the administrative burden and rid employees of tedious tasks such as red tape, digital tools have created more space for added value tasks.
Resource management software has also seen significant growth. These platforms allow construction companies to manage their resources more efficiently, including personnel, equipment, and materials, by providing real-time tracking and analysis.
Whether it is by digitalizing time tracking or team planning, resource management software is all about one thing: visibility. By leveraging the power of efficient communication and accurate data, resource management software is transforming the way construction companies operate. They can now deliver projects faster, more cost-effectively, and with greater precision.
How to benefit from this current trend?
If digital tools have taken their time to break into the construction sector, over the past 10 years they have experienced a boom in investments. As a result, proven specialized solutions, adapted to the sector’s complexity, are now an established reality.
Knowing that, succeeding in your digital transition rests on two main pillars:
- Choosing specialized tools, both performant and user-friendly
- Having a real change management strategy, with a dedicated team and project managers
The worst enemy of change is fear. But it can easily be overcome with time, trust, and clear explanations along the way.
5. Green buildings and focus on sustainable
Whether we are looking at new constructions or renovations, the construction industry is more focused than ever on sustainability.
For “green buildings”, the energy crisis has been synonym with significant expansion. The idea behind “green building” is to better comprehend and manage the environmental impact of both the construction process and the building throughout its lifespan. The goal is to gear decisions towards what is more sustainable and to minimize negative consequences all along the building’s entire lifecycle.
Beside new buildings, the renovation market is expanding substantially and is expected to keep growing. Encouraged by new legislations and the energy crisis, renovation is now focused on making buildings more environment-friendly and cost-saving.
How to face this market trend?
This trend illustrates the shift in the construction industry as well as in our economic system, where there is an ever-growing awareness that the time to think and prepare for the future is now, because it will become our present sooner than we think.
For construction companies, this translates in the necessity to develop skills and expertise in all things sustainable, in order to address a generalizing trend in market demand. People are looking for advice and a trustworthy partner. It is only by having the right speech and the right offer that a company will be able to differentiate itself.
Far from setting aside the short term need for profit, this trend encourages both our society and the construction industry to put on sustainability goggles when thinking middle- to long-term, so it goes hand in hand with long-lasting success.
6. Increasing pressure on performance
The construction industry is caught between two trends. One is the increasing costs of both material and workforce, the second is the need for affordable housing and the necessity to stay competitive.
This puts the industry in a tricky situation for 2023, with the absolute need to protect one’s margins.
In response, the construction workforce is under scrutiny to perform better. But how can it be achieved without degrading the workers’ health – or mental health?
How to address this construction trend?
If people can’t just work harder, they can work better. And it all comes down to providing the right tools and implementing the right processes. For too long, the construction industry was reluctant to change, most of all when it came to digital innovation. However, well-conducted changes across the industry have proven how, with the right support from management, fears can be overcome.
Successful change management is now becoming a differentiating asset, leading innovative companies to outperform their peers, for the benefit of both workers and clients.
From construction trends to tomorrow’s new realities
While construction companies cannot avoid these trends, they can prepare for them. A risk can become an opportunity for those who are up to the challenge.
To good news is that the market is still full of potential and there is no end in sight. So despite an ever more competitive landscape, fast-adapting construction companies can still expect a bright future.
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