State of the Construction Industry: September 2018 Roundup


Don’t miss this month’s top construction news headlines, including net-zero buildings and rising material costs.

Fall has arrived, and with it another monthly construction news roundup. We know many of you have had a busy summer, so it’s a good time to take a breath and see what’s been going on in our industry (like rising material costs), as well as what’s on the horizon (like more green building).

19 Mayors Pledge to Make All New Buildings Net-Zero by 2030

In most cities, buildings are responsible for over 50 percent of greenhouse gas emissions. Curbed reports that to improve that number, a group of mayors from countries around the world have pledged to ensure all new buildings in their cities are net-zero by 2030, meaning they’ll produce as much energy as they consume. Some cities in the United States have already experimented with net-zero construction, and if this pledge is any indication, we’ll likely see more cities doing so in the future.

The takeaway: News like this suggests if contractors aren’t already aware of green construction trends, they ought to familiarize themselves with them. Understanding net-zero, LEED, BREEAM and other topics, as well as local regulations, will likely be a non-optional part of construction in the not-too-distant future.

Construction Input Costs Rise 6.2 Percent Through August

Since August 2017, construction input costs—for fuel, metals, asphalt, gypsum and more—have jumped 6.2 percent, according to the Associated General Contractors of America. The prices contractors are charging for nonresidential buildings only increased 3.4 percent, though, indicating contractors aren’t passing along all the input cost increases to owners. Combine this with the fact that labor costs are increasing amid the construction labor shortage, and you end up with a situation that’s putting pressures on many contractors.

The takeaway: Many contractors have already begun to see the impact of material cost increases, but if you haven’t yet, you’ll likely want to begin planning for how to handle these costs. It’s also a good time to assess your labor force and employee retention practices to mitigate the costs of hiring a lot of new employees.

Seizing Opportunity in Today’s Construction Technology Ecosystem

A new study from McKinsey & Co. examines recent construction technology trends. It found that many technologies are developing around specific use cases in construction. For example, tech for 3D printing, robotics, analytics, artificial intelligence and supply chain optimization are all expanding. The study also looks at what areas of construction technology have matured and which are poised to grow, offering interesting insights into what’s coming for the construction industry.

The takeaway: Construction technology is growing rapidly, and that’s not something contractors can ignore. McKinsey recommends construction businesses think about investing in talent and skill building, since as companies increase their use of technology, they’ll need employees who know how to make the most of it.

Using Root Cause Analysis to Solve Common Problems

At Construction Business Owner, Gregg Schoppman explains the importance of getting to the root of common construction problems rather than jumping to conclusions and treating what’s actually the symptom of a problem rather than the problem itself. His root cause analysis examples offer helpful guidance on how to get to the bottom of what’s actually causing issues like going over budget and running behind schedule.

The takeaway: Before assigning blame for a problem, construction business owners should stop and perform a root cause analysis. Doing so will likely resolve problems faster, since you won’t waste time making adjustments that don’t actually correct the issue.

Learn about root cause analysis.

When an issue arises, perform a root cause analysis to identify the source of the problem.

Wearables’ ROI Is in Safety and Insurance, Expert Says

Wearable devices that have thus far been used in the healthcare field might have practical applications in construction, Construction Dive reports. Wearables that monitor worker health data can lower a company’s insurance premiums and provide employees with information that could prevent a safety issue. Beyond monitoring health data, many other innovative devices could help increase safety in construction including jackets that detect toxins, shoes that detect when someone is carrying a very heavy load and helmets that monitor wakefulness.

The takeaway: Wearables haven’t been widely adopted in construction yet, but most organizations that have begun using them report they’ve had a positive impact on jobsites. For contractors looking for ways to increase safety, construction wearables may be worth exploring.

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