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State of the Construction Industry: September 2020 Roundup
Construction work is ramping up, but health and safety challenges remain; and don’t expect this new normal to change much in the months or even years ahead. Here’s a look at some of the stories we were following in September:
Construction Starts Back on the Rise
Total construction starts rose 19% in August, according to a Sept. 16 report from Dodge Data & Analytics. All three major building sectors saw increases: residential building climbed 12%; nonresidential building construction gained 16%; and nonbuilding construction saw a significant 40% increase. For the year, though, the first eight months were still down 14% overall from the same period in 2019, showing the obvious impacts from the COVID-19 pandemic. “Construction starts continue to make up ground following the nadir in activity in April,” said Richard Branch, Chief Economist for Dodge Data & Analytics, adding that the last few months of the year could provide deeper challenges. The expiration of enhanced unemployment insurance benefits and small business loans that were provided in the CARES Act, the budget crises facing state and local governments, and the impending expiration of the FAST Act on September 30 will all have a dampening effect on starts.”
The Takeaway: The increase in new construction starts is welcome news, though it’s clear we’re not out of the woods just yet. The COVID pandemic has been both a wakeup call and catalyst for contractors across the globe to modernize to meet changing operational and business continuity landscapes. Moving software and processes to the cloud, leveraging stronger data management and analysis solutions to better understand projects and reduce waste, and expanding real-time collaboration, workflows and safety measures are helping contractors not just weather the current storm, but scale their operations to effectively protect their businesses from future disruptions.
Check out these business continuity toolkits we’ve developed for different construction verticals:
The ‘New Normal’ Here to Stay for Construction Processes?
A compelling article on ForConstructionPros.com authored by Peacock Construction CEO Kyle Peacock, takes a look forward in time for the construction industry and which processes, solutions and workflows enacted during COVID might just become permanent. Peacock noted that any return to pre-COVID construction work environments is at least six months away, if not significantly longer. Once it does, some things like the use of masks on jobsites, technologies like site cameras, drones and more for live safety tracking, and real-time software and collaboration platforms are all very likely to stick around, Peacock said. He also noted that new technologies like robotics, automated building processes and more will become more prevalent — especially as skilled labor shortages continue.
The Takeaway: Peacock’s article is pretty spot on. Things have not only changed, they’re going to continue changing. Even before COVID, the construction industry was undergoing a significant technology and data transformation, with thousands of contractors doing away with manual processes and disconnected software in favor of cloud-based, integrated construction solutionsthat deliver real-time information and workflows. And the cloud is driving the next waves of construction innovation, including robotics, data analytics, machine learning and more.
Wildfires, COVID Violations Among New Safety Concern for Contractors
Building projects safely has always been a key issue for contractors. That has usually meant providing protective gear to prevent on-the-job injuries like cuts or falls, closely watching weather conditions and making teams aware of environmental concerns or other infrastructure on jobsites. Now, with COVID-19 and a flurry of new health and safety regulations, safety practices are being updated regularly to keep workers safe, and those not keeping up could be putting not just their employees, but their businesses at risk. Agencies across the country are scrutinizing contractors’ COVID protocols. A recent Construction Dive brief, for example, noted that the Michigan Occupational safety and Health Administration recently issued more than $50,000 in fines to 19 of the state’s contractors for not following COVID protocols at their jobsites. And contractors are facing more health and safety issues as wildfires continue to ravage western states. Many contractors had to stop work as Air Quality Index levels jumped to dangerous levels. Michael Zisa, partner at construction law firm Peckar & Abramson, told Construction Dive that contractors may have legal exposure if a worker were to become sick at work during unhealthy or hazardous air quality days.
The Takeaway: These new health and safety challenges are even more reason for contractors to adopt modern construction HR management and safety management solutions to communicate with teams and facilitate project pivots in real time. Many contractors moved to integrated, cloud-based collaboration tools during the early stages of COVID in order to ensure business continuity, and they’re helping meet other challenges and demands head on, keeping them in compliance and their teams safe.
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