Happy New Year! 2018 is upon us and as we wave goodbye to 2017 we should reflect on the developments in the construction industry and look forward to some of the imminent changes we need to prepare for.
2017 marked another year of growth in the construction industry with a 2.8% growth in employment alone and US construction spending level surpassing 2007 metrics. Only in October did the architecture billings index fail to record an increase of billings from last year. The construction industry is growing. Maybe not at dizzying speed, but at a slow and steady pace that is poised to continue through 2018. With this constant growth, however, comes new challenges and concerns.
The continual expansion of the construction industry is spurred on by the nationwide focus on infrastructure and the growing demand for green technologies. Galvanized by Trumps initial promises for a $1 trillion infrastructure plan, local governments have seized the opportunity to propose a staggering number of new highway, transportation, and light rail projects. Foreign investment has also increased and has led to massive projects like Foxconn’s $10 billion investment in Wisconsin or West Virginia’s new $83.7 billion investment in its shale gas and chemical manufacturing industries. Renewable energies and technologies have been a large contributor as well with solar energy employment increasing by 82% over the past three years and solar employment skyrocketing by 100%. This explosive growth of renewable energy employment is largely due to the decreasing costs of the technology and a surge to complete construction before federal tax credits are phased out.
While this continued growth is great for the economy it is bringing with it some unforeseen challenges. According to the Associated General Contractors of America (AGC) 70% of all construction companies are having difficulties finding skilled workers. As the number of projects and funds available continue to grow the current construction workforce is beginning to retire and to date there is reduced interest within the Millennial and Gen X generations. This is largely attributed to a societal focus on attending universities and the current social stigma against blue collar work. Despite this, there is hope as nationwide trade school enrollment is beginning to rise and technology begins to play a more dominant role in construction. Currently, most companies are addressing their workforce concerns with more overtime, in house training, an increase use of subcontractors, labor saving equipment, and offsite prefabrication.
As we head into 2018, the greatest focus is on infrastructure and a new way of resistant building. With the devastating hurricanes that hit the Gulf coast this year and the raging wildfires to the west, a new focus has been placed on rebuilding the demolished infrastructure in a much more resilient way. We’re seeing damages of more than $180 billion from Hurricane Harvey alone and a commitment from cities like Houston to commit to a new RELI resiliency standard. Officially adapted by the US Green Building Council, this new RELi standard will tie closely in with LEED business standards as well and focuses for planning for 100 years of resilience instead of the current norm of 50 years.
With one of the industries key challenges being employment and the lack of skilled labor, many companies are focusing on new technologies to reduce their workforce. Some of the big-ticket technologies we will discuss in future articles are virtual reality and augmented reality, drones, 3D printing, self-driving vehicles, and massively innovative products like the Semi-Automated Mason brick laying machine.
Another way to improve your workforce and manage the growing labor crunch is focus on ways to automate your payroll and improve your benefits. Ensuring that the loyal workers you do have are paid on time and quickly as possible without any negative burden to their taxes are crucial. Services like direct deposit, pay cards, and accurate benefit tracking set your company above the rest and lead to much more loyal crew. Consider improving their benefits, if possible, as well to increase the longevity of your employees until new employees can be trained and replaced by the growing trade school graduates. To offer this direct deposit and improve your benefits with CE Payroll Services look below.
At the end of the day we can expect 2018 to be another year of growth for the construction industry. The focus on infrastructure and the rebuilding efforts from the many natural disasters that plagued the country in 2017 set the stage for explosive growth if you can find the employees needed to follow through with your projects. Keeping pace with technological developments and utilizing the local trade schools to sure up any deficits in your workforce will be a key factor of your success in 2018. This also means companies need to focus on their current employees and finding ways to improve satisfaction.
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