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Construction Industry Trends: July 2019 Roundup
Construction Labor Shortage = Higher Worker Pay
The Associated General Contractors of America (AGC) in July released a report noting a 21,000 bump in construction jobs in June, while the industry has added nearly a quarter million jobs in the past year — a 3.2 percent increase. The unemployment rate also fell to 4 percent. One of the most intriguing stats noted by the AGC, however, is that the average hourly earnings by construction workers was 10.1 percent higher than those in the private sector. “Construction firms continue to go to great lengths to recruit and retain workers during one of the tightest labor markets many of them have ever experienced,” said Stephen E. Sandherr, the association’s chief executive officer. “Making matters worse, relatively few school districts offer the kind of career and technical education programs that signal to students that they should explore careers in high-paying fields like construction.” Keeping current workers and subs happy is a priority for construction executives with historically-low unemployment, noted Construction Dive in a recent article on the AGC’s report.
The Takeaway: This is good news for skilled construction workers; bad news for construction firms already stretched thin for quality employees. Jobs aren’t slowing down. In fact, demand for construction work is higher than ever. But if contractors cannot get the work done, valuable revenue and profit is being left on the table — and reputations can take a hit. That’s why many contractors are modernizing to meet demands. Moving to the cloud, automating processes through innovative construction software and embracing new and emerging technologies to streamline workflows and lessen the need for human hands on some aspects of jobs are how contractors are able to stand out from the pack.
Construction Tech Innovations Abound, But Investment Stream Slowing
Speaking of technology, several recent articles highlight the continuing impact that technology is having on the construction industry. Construction Dive reported on a new AI-enabled solution that uses drones and aerial photos through infrared thermography cameras to quickly spot bridge defects. The camera's infrared sensors can detect electromagnetic radiation and heat fluctuations that indicate areas of stress. Drone adoption in construction is significantly on the rise, as evidenced by a recent three-year agreement between PCL Construction and 3DR. The Denver-based PCL — the eighth-largest construction company in Engineering News Record’s Top 400 Contractors list — will leverage the drones and 3DR’s software platform for site documentation, quality control, progress reporting and more. Meanwhile, 3D printing is also beginning to find a much more impressive footing in construction. A New York-based 3D printer company (S-Squared 3D Printers) claimed to have just built the largest 3D-printed concrete house. While CNN recently profiled property developer Emaar’s plans to begin 3D printing of homes as part of a project in Dubai. Experts note 3D printing could be a $40 billion-plus industry by 2027.
The Takeaway: All of these technology innovations come as contractors are in the midst of modernizing their construction and business management operations to become more digital and efficient. Especially, in the wake of the deadly Florida International University bridge collapse, it’s nice to see technology being developed to identify problems quicker. There have been billions of dollars poured into construction technology advancements in recent years. However, a recent article by Crunchbase notes that the stream of investments in construction technology might soon be slowing. Funding of U.S. construction startups for the first half of 2019 has totaled just $196.5 million versus the $1.27 billion raised in the first half last year. Of course, this not welcome news with so much work still left to do to bring the industry’s technology capabilities in line with those in other industries. That said, the more contractors continue to adopt the innovations that have been developed, demand for future improvements will likely lead to a surge of new technology investments.
Promising the Moon…or Mars
Construction Executive recently ran an intriguing article, “The Future of Extraterrestrial Construction,” that envisions the potential construction market that could be created with exploration and colonization of Mars. Of course, there would be many challenges, including lengthy travel times between Earth and Mars, significant logistical issues in shipping materials and labor, ensuring safety of workers, foreign building environments and of course … costs. But the article points to advancements the aerospace industry has made with emerging and disruptive technologies, including making space travel possible in the first place. And scientifically thoughtful scenarios are presented in which the possibility of construction work on Mars could be possible in the not-so-long-term future.
The Takeaway: Ok, after you get your Total Recall jokes out of the way (can you imagine a foreman yelling “get your ass to Mars!?”), think about the possibilities here. This would be a historically significant opportunity for the right contractors tasked with building the first structures on another planet. And, it could represent one heck of a construction contract (where would you even begin with drafting those details?). The truth is though, the idea of building on lands beyond Earth might not be so far-fetched in our lifetimes. After all, we’ve already proven we can build and assemble space stations in the vastness of space. But any contractor considering a Mars mission should start planning now — and make sure their operations are running with the most up-to-date technologies today in order to best scale for the future.
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