2020 FMI Industry Report – we’ve summarized it for you.
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2020 FMI Industry Report looks at challenges in construction industry
The 2020 FMI Industry Report observes the top challenges the construction industry faces today and how firms are utilizing tech to combat them.
Who participated in the 2020 FMI Industry Report?
Seven hundred thirty-eight participants were involved in 2020 FMI industry report, mainly contractors. 42% were from the U.S., 22% from the U.K., and the remaining from Australia, New Zealand, and Canada.
Participants surveyed and their role in construction:
- General Contractor/Construction Manager: 334 (45%)
- Specialty Contractor/Subcontractor:299 (41%)
- Project Owner/Owner’s Representative: 94 (13%)
- Architect Engineer: 8 (1%)
- Other: 3 (0.4%)
These participants gave insight on the top challenges in the construction industry that they recognize.
What are the top challenges in construction project management?
- Labor Shortage:
In 2017, an FMI Talent Development Industry Study found that 89% of construction firms recognized a talent shortage in their industry. This was a rise-up from 53%, recorded in 2013.
While the construction population grows older, baby boomers continue to retire, with the majority of workers retiring within the next ten years.
When young adults (aged 18-25) in the U.S. were asked why there was little or no chance that they would be willing to enter the industry, the two main reasons for this were:
- Too physically demanding
- Too difficult
Perception might be part of the problem. It’s an industry that young adults don’t see as a worthwhile well-paying career.
2. Material and Labor Costs:
The lower the number of skilled workers, the more money they can ask for their service. Development projects could also take more time if the desired amount of skilled workers aren’t available.
Material costs also continue to rise.
For example, in 2018, material costs in the U.S. grew by over 10% compared to the previous year. The main reasons are due to a lack of resources after natural disasters and a significant growth in international construction activity.
3. Global migration:
This FMI report reveals that by 2050, the global population living in urban areas will jump from 55% to 68%. This means a rapid need for new housing, schools, and other buildings for over 2.5 billion people.
While demand grows and supply drops, costs will rise. Attracting and holding onto construction workers hired for this purpose is one of the top areas of improvement that surveyed workers had an interest in.
Challenges in construction industry that need to improve
Respondents said maintaining a safe job site was their top priority. Firms stated their biggest concerns were to improve these three primary areas:
- 66% want to preserve a safe job site.
- 57% want to attract and hold onto skilled workers.
- 52% want to maximize field productivity.
Other areas the construction industry reported wanting to improve:
- Meeting set project delivery schedules.
- Reducing the extent of rework.
- Staying in touch with project stakeholders.
- Developing insights out of data.
- Maintaining a safe job site (4.4) (top priority)
- Staying in touch with project stakeholders (3.6)
- Reducing the amount of rework (3.4)
- Meeting set project delivery schedules (3.4)
- Maximizing field productivity (3.3) (priority)
- Attracting and retaining skilled workers (3.2) (priority)
- Developing insights out of data (2.8)
Participants were asked which area of the business solving these problems would have the most positive effect:
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While over 50% of firms have already chosen technology as a method of dealing with safety issues, lower numbers use it to cope with the other concerns, such as meeting project schedules and retaining skilled workers. This can have a direct impact on areas such as financial performance and company reputation
Direct impact of technology in construction
The 2020 FMI Industry Report shows that the construction industry expects the direct impact of modern technology to have the most significant effect on:
- Financial performance/margins
Financial performance can be seen as the underlying objective, severely affected by the length of time a project takes to finish, or the reputation a company has developed. How easy do they find it to attract and hire skilled, experienced workers?
Access to data is also discussed in the 2020 FMI Report as having a positive effect on financial performance through technology automating data collection. Decision-making is felt to be more dependable, bridging the ‘deepening knowledge gap,’ explained as being the result of the industry’s changing demographics.
Why some construction firms aren’t adopting technology, the challenges in construction project management: 2020 FMI Industry Report
The 2020 FMI Industry Report identifies two main reasons why construction lags behind other industries in the use of technology in the workplace.
The first is a simple lack of knowledge, with technology not being easily accessible in the industry. In some cases, money is just not found to be available, with construction firms holding tiny technology and innovation budgets.
When software is chosen, it seems essential that workers are provided with an easy to use a method of making their current job an easier one. The speed that it takes to start and set up are issues that need to be recognized and were described as other important blockers.
The top reasons why firms were likely to be dissatisfied with construction software:
- Found challenging to use.
- It didn’t save the time expected by employees.
- Not easily integrated into daily work.
- Lack of mobile convenience.
How Contractors choose to invest in a technology partner: 2020 FMi Industry Report
With the different range of technologies available to use in the construction industry today, a long-term technology partnership is becoming a more accessible and effective option.
The top indicators of a good technology partner are listed as:
- Access to experts provided: 79%
- Complete understanding of your industry: 71%
- Incorporating customer feedback into product growth: 69%
- Effective educational tools/materials: 69%
- Customized and valuable training available: 69%
In this report, participants named the most important reasons for satisfaction through technology partnerships, as:
- Information available in a single place: 20%
- Easy to use:20%
- Good mobile accessibility: 16%
Types of software programs used by construction project managers: 2020 FMI Industry Report
Firms were asked the type of software programs that they already used and for what specific reasons. They answered:
- Project financials: 68%
- Project management: 58%
- Safety/risk management: 55%
- Equipment management: 48%
- Field/labor management: 47%
Software programs are in place by over 50% of firms to deal with project financials, project management, and risk management. Adopting equipment management at an early stage can help firms to maintain equipment from the beginning properly. Also, using technology to deal with labor-management can be an aid in keeping construction projects on time.
Reasons why software programs are lagging in these two areas, could be the tiny tech and innovation budgets mentioned earlier. Also, these firms aren’t aware of the technology that could be used and the benefits involved.
The main takeaway from the 2020 FMI Industry Report
This article has gone through the main points mentioned in the 2020 FMI Industry Report, and surprising figures have been uncovered and predicted, such as the growth of the global urban population by 13% by 2050. With the positive outcome that technology can have on issues such as cost reduction and company reputation, it is clear why more project managers should be encouraging their organizations to adopt tech and use it as a tool.
General Contractor of Commercial Construction in the Midwest U.S., who specializes in commercial and institutional construction, states:
Ten years ago, there was some technological advancement, but over the past five years, it’s been exploding. It’s taken the construction industry a while to embrace that change.