The past few years have been nothing short of interesting for the construction industry. Supply chain shortages and other issues are just a few of the challenges faced since the beginning of the pandemic. And as we approach the halfway point of 2023, several construction industry trends continue to emerge.
Anticipate and adapt to these trends, and your business will be in a strong position for growth. To remain competitive, check out these top trends to watch for the rest of 2023.
1. Ongoing Supply Chain and Inflation Issues
While we expect shipping bottlenecks to ease this year, supply chain issues have become the “new normal” for construction and other industries. Inflation is an ongoing concern worldwide, resulting in higher material costs and more expensive construction equipment. Construction companies can overcome or minimize many of these issues by adopting a variety of strategic business practices:
- Adjusting contract terms — Negotiate contract clauses with customers and partners that limit the financial impact of supply chain delays and inflation.
- Modifying bidding strategies — Supply chain and inflation issues can turn a profitable project into one that threatens a company’s survival quickly. Reassessing pricing models may mitigate risk and protect your business against this.
- Changing supply chain policies — To prevent costly delays or shutdowns, work with multiple vendors and establish emergency agreements with suppliers.
2. Continuing Labor Shortages
The construction industry has been struggling with skilled labor shortages for years – a situation that’s projected to continue. According to a recent ABC report, the industry will require 590,000 new skilled workers in 2023 alone. Some of the ways your construction firm can attempt to fill these positions (and keep them filled) include:
- Diversifying the workforce — Instead of targeting young males, diversify your workforce by hiring more women, veterans, and recent retirees to fill open spots.
- Creating local partnerships — Find new ways to reach potential talent in your community, such as partnering with staffing agencies and building relationships with local schools and universities.
- Valuing your staff — When you have the right people on your team, appreciate them. Pay them competitive wages (and pay them on time). Payroll can be time-consuming, so consider outsourcing this part of your business.
3. Technology Advancements to Enhance Productivity and Safety
Construction industry technology trends are driving change and innovation. If your business can embrace these new solutions, you’ll be able to scale more quickly and outperform the competition.
- Internet of Things (IoT) — By gathering and using real-time data from safety applications, GPS devices, tracking labels, and wearables, your construction company can inject more visibility into its operations, boost efficiency, and improve safety.
- 3D printing — A recent study reveals that 3D printing in the construction sector is expected to experience an 87.3% growth rate over the next decade. This technology can produce structural and smaller items required for construction projects.
- Wearables — Wearable technology is becoming more common on construction sites. These solutions improve productivity and safety in a notoriously hazardous industry.
4. Increase in Modular Construction Options
Modular construction is making a comeback. Building a significant portion (as much as 90%) of a structure offsite before transporting the components to the property has become popular because it’s cost-effective for many applications.
With modular construction, companies can reduce waste, accelerate project schedules, lower costs, and improve worker safety. Dodge & Data Analytics reports that modular construction will see significant growth in hotels, healthcare facilities, and multi-family residential projects over the next several years.
5. More Virtual Innovation
One of the latest trends in the construction sector is the increased use of virtual design and visualization solutions. Examples include building information modeling (BIM) to improve construction management software and virtual design and construction (VDC) software, which allows engineers to visualize structures and share information with stakeholders before breaking ground.
6. Adoption of Green Building Practices
Due to increased consumer and regulatory pressures, more and more construction businesses are adopting eco-friendly practices. For example, builders might begin recycling as many construction materials as possible or offering solar panels to customers as an option.
An overriding goal of the construction industry is to reach net-zero status by 2050. Many are working on moving to lower CO2 steel and other building materials and adopting LEED building principles.
7. Importance of the Bottom Line
As companies become more mindful of rising costs and competitive pressures, the need for efficiency increases. Fortunately, technology has enabled businesses to improve cost savings and establish metrics that provide valuable data.
Focusing on your bottom line gives you more confidence in uncertain conditions. For example, depending on the circumstances, a firm might stockpile some materials while they are more affordable or invest in technology solutions to improve visibility and efficiency.
Contact New Lyfe for All Your Construction Accounting Needs
The construction industry will face both challenges and opportunities as 2023 continues to unfold. With the right strategy and professional partner, your business can take advantage of these trends and weather any issues. Outsourcing accounting is one of the best ways to remain focused, stay organized, and prepare for growth.
New Lyfe Accounting offers personalized financial services exclusive to the construction industry. The foundation of our offerings is our construction CFO services – a holistic financial partnership that provides the support you need to grow. Beyond our CFO services, we also provide supplementary solutions like project accounting, bookkeeping, and construction software support. Contact us today to discover how our services can make 2023 (and beyond) successful for your construction business.
