With every new beginning, it’s a smart idea to take a look at the forecast ahead. ESG discusses some of the prominent trends anticipated for 2017.

Collaboration Efforts Prove More Beneficial

In both the private and public sectors, the most traditional delivery method in the construction industry has been design-bid-build (DBB), in which the owner contracts separately with the designer and general contractor; the latter two working independently of each other and not contractually obligated to one another.

The newer trend in the industry, design-build (DB) has gained more traction with designers and builders actually working collaboratively for project delivery methods. The contractor is now the leader in design and implementation for a project for a more streamlined approach.

Integrated project delivery (IPD) is proving to be a successful new delivery method as well. IPD involves multiple parties on one contract, collaborating on different aspects of the project: project goals, risk-sharing, cost, compensation, and more. Generally, an IPD can involve the owner, general contractor, architect, and others if necessary.

These more collaborative methods are demonstrating higher efficiency, fewer change orders, and faster construction schedules with everyone able to work directly with each other and not have to wait for a ‘middle-man’.

Technology is Waiting to Revolutionize the Job Site

As with other trends and new developments, the construction industry has slowly adopted some newer technologies that can help monitor and collect data from the initial stages of a project through to its end. This collection of technologies is sometimes referred to as the ‘Internet of Things,’ (IoT) and can include employee equipment and tracking devices, wearables, drone surveillance, etc. In addition to extensive data-collecting, it can also help make collaboration and information exchange much faster and easier among all parties.

These technologies can also ensure employee safety and compliance, with wearables tracking workers out in the field and protecting them from any job site hazards. Sensors on the equipment can also signal whether repairs are required as well.

What firms are still struggling with, however, is finding the right technology that will take the aggregation of all the data collected from various devices and streamlining it to readable and meaningful information for human interpretation. Once a comprehensive system is tried and proven true, experts predict many companies will jump on board.

Virtual and Augmented Reality

One of the most exciting innovations to reach construction technology is the advent of virtual and augmented reality. As it suggests, VR and AR have a huge advantage in being able to lay eyes on a projected investment or a live job site. This can allow for greater collaboration among parties, as well as maintaining the safety of the job site by catching safety hazards or preventing costly mistakes before they happen.

One of the major setbacks at this juncture is that while VR and AR technologies would be a great investment, their expense and implementation is still quite costly. Still, they have major potential for the future.

The Industry Will Continue to Experience a Labor Shortage

The construction industry has been hit with a reduced workforce for about a decade now. Over 40% of the workforce was cut over a span of 5 years, beginning in 2006. About 2.3 million jobs were lost, and many of those workers just never came back to the industry. Today, those effects are still felt, as the industry continues to experience a shortage of skilled workers.

Additionally, there are not as many opportunities for people to obtain more technical training, as trade and other occupational skills are less focused on in schools anymore. Many of the highly-skilled workers that are established in the industry are now within the age range that may look to retirement soon. This combination of factors leaves companies and firms desperately seeking to fill those highly-skilled positions.

If the younger generation can gain access to proper training, they have a broad range of positions open to them in this industry. The perk being that they would also earn a higher-than-average entry salary since the demand is urgent.

Until more of the younger generation is funneled into these fields, the labor shortage will remain with us.

Uncertainties Remain with the Incoming Administration

With most of 2016 focused on the election and the highly polarizing political climate, there was an air of uncertainty in the construction industry. With a completely new administration, there are always concerns regarding changes in regulations, labor policy, taxes, as well as numerous other components affecting the business sectors.

With Trump’s election into the White House, some of the uncertainty has let up, with the hopes that his background in business and development will bode well for the industry. Still, few are 100% optimistic just yet, and it will likely take a while before firms are confident or at least have a better grasp of what the future holds.

Additionally, the U.S. economy could be hard hit with trade conflicts, thus raising the cost of materials imported from other countries, such as China. Changes in immigration policy would also affect the industry’s labor force as well.

These uncertainties across the board are creating a limbo period that can make owners apprehensive about starting new projects.

A Potential Boost in Infrastructure Spending Gives Cautious Hope

During his campaigning in 2016, one of Donald Trump’s proposed plans included a 10-year $1 trillion infrastructure program. This mostly privately-funded program would offer tax credits to investors that are willing to front an equity stake in large-scale projects.

These proposals are encouraging to the construction industry as a lack of funds have left contractors with unstable work. If these plans are able to get off the ground, it will give the industry a much-needed boost and the security to move forward.

Despite this encouragement,  the industry is still cautiously optimistic as we move into the next administration and see how the president and Congress proceed.

Offsite/Modular Construction will Finally Gain Ground

Though offsite/modular/prefabricated construction has been around for awhile, again, trends tend to catch on more slowly in the construction industry. However, with the horizon remaining unclear for the time being, there may be a shift that will allow offsite construction to grow and gain more ground.

Prefab construction even satisfies two crucial concerns in a development project, which are staying on schedule and reducing cost. Constructing a unit in a contained space allows for a more reliable prediction on time, as the project is sheltered from outside elements and quality control is easier to maintain.

Once more contractors take on prefab construction and realize the benefits in cost and time efficiency, others are more likely to jump on board as well.

Sustainability May Mean Adaptability

With many changes anticipated with the new administration, adaptability will be key in maintaining relevancy, especially with movements like sustainable construction.

In the past, green movements have marketed the benefits of sustainable construction in terms of energy efficiency, leaving less of a carbon footprint, and also contributing less to climate change. However, experts predict that in order to maintain a hold in the future markets, the sustainable construction movement will need to refocus their message to better underline the bottom line. The new political and economical climate, so to speak, is predicted to be less concerned with the environmental impact and moreso with cost efficiency and profits.

However, those within the green construction movement aren’t phased. Much of what they have achieved within the realm of sustainability have effectively cut costs with reduced energy plans, while creating jobs and building highly efficient buildings.

Stricter Enforcement of Safety Regulations

Safety violations have plagued the construction industry for some time, and experts are predicting a stricter enforcement of regulations for 2017. Criminal prosecutions are even expected to occur for past incidents that may have been classified as traditional accidents.

Construction companies should also be aware that a closer watch on fraud is expected as well, in particular, with regards to wages and billing.

Trusted and transparent companies should have little to no problem with these types of regulation enforcements; however, it is a reminder to us all to stay accountable and well-documented for everyone’s sake.

ESG can help keep you ahead of the curve in 2017 and beyond. For more information, explore our website or visit our contact page to reach out to us directly.