Construction Technology/News

Construction Trends Shaping the Industry in 2023


It has been a challenging year for the construction industry. Despite a forecasted annual growth rate of 2.4%, firms have faced rising material costs, ongoing talent shortages, and increased legislative requirements.

However, being a software industry leader for more than 40 years, we at Trimble Viewpoint see a range of opportunities in 2023 for construction firms looking to take their business to the next level. Read on as we reflect on some of the construction trends of the last 12 months, and offer our forecast for the year ahead.

Construction Trends of 2022

Downfall of volume home builders

Ashley Smith is the APAC Sales Director for Trimble Viewpoint. Having worked in construction for over a decade, he notes one of the key construction trends of 2022 was a high level of industry uncertainty. This was largely due to “increased material costs and ongoing staffing shortages.”

“These conditions caused many volume home builders to close their doors and leave projects unfinished,” Smith says.

Industry statistics support this view. According to CoreLogic’s Cordell Construction Cost Index (CCCI) for Q3 2022, residential construction costs increased 11% over the 12 months to September.

But, as the old proverb goes, one person’s loss is another’s gain. Andrew Tucker, APAC Product Manager for Trimble Viewpoint, says the downfall has also been an opportunity for Australian operators to increase revenue.

“Contrary to market conditions, we saw more than 15% annual growth in our user base,” Tucker says.

“Many of our customers took on those abandoned projects –- one even tripled their revenue from doing so. We saw it as an opportunity to step in and help where we can.”

Increase in legislative compliance

It's predicted that regulations will tighten even further for 2023, especially for firms operating in Queensland.

Operating in Australia requires firms to keep up-to-date with a range of legislative compliance requirements. According to Tucker, this only increased in complexity in 2022 – particularly for Queensland construction firms.

“We saw an increase in compliance and compliance risk right across Australia,” he says.

“As an example, operators in Queensland are now required to meet new compliance regulations with project trust accounts. We expect these regulations will tighten even further in 2023.”

Adoption of software APIs

The construction industry historically has been slow to adopt new technology and innovation. However, McKinsey & Company recently highlighted the construction industry’s rapid uptake of integrated software platforms. Smith agrees and says companies are seeking to increase efficiencies and their bottom line.

“Construction is more complicated, but software is making it more automated,” he says.

“In the last five years, we’ve seen a significant year-on-year increase in API adoption by firms wanting to increase efficiencies, reduce risk, lower operating costs, and improve margins. We expect this will continue to increase in 2023.”

Shift to the cloud

Moving to the cloud not only makes things easier on you, it also helps protect your company from cyberattacks.

The COVID-19 pandemic saw many construction firms shift to working digitally. However, Smith says that despite the rapid increase in technology uptake, continued uncertainty meant many operators missed the boat in adopting new technologies.

“Many companies that survived the pandemic are playing catch up to bring their solutions into the cloud,” he says.

“This is for ease of access and use, but also for security purposes. With recent cyber attacks, there has been significant interest in cybersecurity and ensuring systems are secure.”

Construction forecast for 2023

Focus on connected data

A connected platform allows your company to connect the field and back office communication seamlessly.

Just as important as access to the right tools and materials is access to connected data. Now more than ever, firms see the value in access to the right data at the right time.

Tucker anticipates this construction industry trend will become more of a focus in 2023, with more software companies “offering connected data solutions to solve industry problems.”

“This will increase more as firms invest and experiment with their software partners to see what is possible,” he says.

“We will see more investments in software and the way customers are connecting.”

Connection of the digital and real worlds

Building information modeling (BIM) has increased in popularity in recent years. Firms using BIM enjoy benefits like cost and time savings, and improved asset management.

With the Australian Government promoting the benefits of BIM, Smith says that more operators will realise its potential.

“What we see is the connection of the digital world to the real world,” he says.

“For example, you can take a model and put it in the hands of people in the field. They can see an augmented reality view of planned pipework, identify any clash issues in real-time, and make adjustments to save time and increase project margins.”

Greater focus on efficiency

Productivity in the construction industry has not improved in decades, with 30% of its efforts wasted due to the structure of the industry, silos within the structure, and increasing service complexity.

Smith says that "operators looking to buck the trend and mitigate the impact of rising costs will need to be more efficient.”

“This means better material and project management –- using software to better understand what happens on-site to reduce inefficiencies.”

Greater interest in sustainability

As more governing bodies and businesses look to implement greener policies, sustainability has evolved into a global movement.

The construction industry alone generated 12.7 million tonnes of waste in 2018-19. With calls for a greater focus on sustainability echoing across the nation, the Australian Government has also put forward plans for banks and other big businesses to disclose their environmental practices.

“Public and larger operators are shifting focus to sustainability," Smith says.

“This is in part to improve their valuations. They are looking to improve their environmental footprint – and construction software can help them achieve that.”

Opportunities for construction firms

“For the companies who have their systems in place and are forecasting – now is a great opportunity to get ahead.”

Tucker says operators can leverage these construction trends, particularly the increased focus on compliance, by implementing construction management software.

“Companies should align themselves with software built for the Australian and New Zealand markets,” he says.

“Your software must have compliance built in as a standard. Keeping up-to-date with regulatory changes is also important. Otherwise, you will be spending time and money trying to get back on track.”

Smith says innovation should also be a focus for success-driven firms.

“There will be innovation opportunities –- and there are companies who have put themselves in the right position for it,” he says.

“For the companies who have their systems in place and are forecasting – now is a great opportunity to get ahead.”

Posted By

Nat is the marketing manager for Viewpoint’s Australian office. With fifteen years of experience in the software industry and a passion for construction, she delivers the best solutions to the industry and helps builders get the tools to get the job done.