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Construction Industry Trends: January 2022 Roundup
Though January can seem like a slow month in starting a new year, it was anything but in the construction industry. Contractors gained some clarity on COVID-related health and safety issues, more new markets and projects are emerging, and confidence is the highest it’s been in two years. Here’s some of the stories we followed in January.
Vaccine Mandates for Large Employers Blocked by SCOTUS:
The U.S. Supreme Court in January ordered a stay against the Occupational Safety and Health Administration’s (OSHA) temporary emergency COVID-19 vaccination mandate for large employers. In the court’s 6-3 decision, justices in favor of the stay argued that there was no previous precedent for a mandate such as OSHA had proposed, and that the agency did not have the authority to require workers to be vaccinated or submit to weekly testing. Had the measure not been blocked, it would have impacted approximately 80 million American workers.
The court’s decision led the White House and OSHA to scrap the mandate plan altogether. The decision was met with mixed reactions in the construction industry, with agencies like OSHA and worker safety groups saying the decision will extend the pandemic and cost more lives, while industry organizations like the Associated Builders and Contractors (ABC) praising the move, calling the mandate something that would cause “irreparable harm to the construction industry.”
With the temporary mandate now effectively dead, it is up to individual employers as to whether they want to develop their own corporate mandate policies. That said, OSHA said it will continue to work toward a permanent vaccination or testing mandate.
The Takeaway: Regardless of where you land on this sensitive issue, the decision does at least provide some clarity for contractors as they move forward. Many large contractors already have stringent COVID safety protocols in place, including regular health checks, mask policies, and social distancing; and some have their own vaccine mandates. The pandemic is not going away any time soon, though, and contractors are realizing they need to find new strategies and technologies to work safely and efficiently.
Contractors Confident of a Better 2022
Despite the pandemic and a number of other industry challenges remaining (labor shortages, supply chain woes, rising material prices), contractors on the whole seem bullish on the future.
According to a recent survey from the Associated General Contractors of America (AGC), nearly three quarters (74%) of construction firms expected to expand hiring in 2022. Roughly two thirds (63%) of respondents were optimistic that infrastructure construction (especially roads and bridges) would take off with high-dollar contracts following the recent passage of the infrastructure bill.
The AGC noted that contractors responded optimistically in 15 of the 17 total categories of the survey. In the same survey a year ago, the majority of the responses had negative implications or expectations.
The Takeaway: These responses mirror what our own customers and user base of construction professionals are saying. In response to a survey in Trimble Viewpoint’s Network, an online user platform and community, 65% expected to see larger construction contract values and 64% felt we’d see more project starts and backlogs in 2022. Here, just over half (53%) said they expected their organizations to hire more in 2022, while 57% expected their company to spend more money. Yes, a number of industry challenges remain—and will for years to come, but the industry’s confidence right now could mean some very good things ahead.
Booming Market Opportunity: Warehouse Construction
Another reason contractors are bullish on 2022 is the sheer amount of high-dollar project opportunities available. In addition to a sea of potential infrastructure-related projects, hospitality and retail markets are adding a lot of new developments, and, as we noted in our November 2021 industry roundup blog, the booming e-sports and online gaming market is creating opportunities for new arena/convention space construction.
Add e-commerce and warehouse construction to the list of booming construction markets. As more and more retailers move to online operations, so too comes the need for massive warehouses and distribution centers. As Construction Dive noted in January, “major transportation corridors near large metropolitan areas such as San Francisco, Dallas, New York, Seattle, Miami, Houston and Chicago, continue to be hot markets for the distribution and warehouse space."
And there are expected to be several emerging markets for e-commerce and warehouse operations as well, including Las Vegas, Phoenix, Salt Lake City, Kansas City, Louisville, Ky., and areas of South Carolina and Central Florida.
The Takeaway: Let’s just say contractors are not going to have a shortage of available projects to bid on in the next few years. The keys for construction firms’ success, however, lies with how they A) assemble skilled workforces and project teams to tackle these projects, and B) modernize their operations through the latest technologies to meet increasingly demanding project demands and real-time reporting and compliance requirements.
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