It’s been an interesting year for the American construction industry and an even bigger one for construction trends in 2015. The sector has seen one of the best growth rates in almost a decade, with total construction spending in the 12 months to the end of June coming in at $1.06 trillion, which is a 12% increase on a year ago.
Similarly, US Construction growth is expected to outpace GDP over the next ten years, by growing at an annual rate of 5.9% over the next decade. Despite this positive outlook, there still remains some headwinds for the US construction sector, like sluggish jobs growth due to a slowdown in China and fluctuating construction material costs due to an increase, then decrease, in construction projects. Let’s take a look at how economic, technological and regulatory trends will have an impact. Let’s look at Construction Trends 2015.
Economic Construction Trends
Let’s just say this, you can’t really predict the future of the US economy based on one lackluster jobs number. There’s no doubt about it, the September jobs report was quite disappointing. Although job growth grew by 142,000 throughout September and the unemployed number remained unchanged at 5.1%, according to the US Bureau of Labor Statistics (BLS) the number was wide below economists’ expectations and the employment within construction remained flat. However, it’s not all bad news for the construction industry as some commentators say the resilient housing and construction sectors can actually help keep the economy afloat. If you look closer at the numbers, the construction sector has been quite resilient in terms of new hires over the long-term, expanding in 36 states between August 2014 and August 2015. According to Eyeonhousing.com who cited BLS data, total employment in home building and remodeling stood at 2.46 million in August, which broken down adds up to 694,000 builders and 1.761 million speciality trade contractors. With this number in mind, Daniel Goldstein of MarketWatch said recent growth in construction and housing jobs is “generally attributable to the solid number of housing starts.” According to the US Census Bureau, new residential starts for August stood at 3.5% (1,1700,000), or 1.4% higher than July’s number of 1,130,000. Despite the recent numbers, the general outlook for the construction industry is quite positive and this is backed up by previous GDP economic data which has been increasingly resilient.
Similar analysis seems to correspond to this steady growth theory in all aspects of the US construction sector and GDP more broadly. A report by Dodge Data and Analytics, suggests the commercial construction sector will increase by 15%, institutional building by 9%, single family housing by 11%, multi-family housing by 7%, public works by 5% and construction of manufacturing plants by 16%. Finally, American construction firms should be aware of growth elsewhere, particularly within emerging markets and position themselves to take advantage of them. According to an analysis by Accenture, the global construction sector will expand quite robustly over the coming years, particularly within emerging markets like South America, Asia and Africa. This growth will pose a number of “challenges for construction companies”. The report says that in order to be prepared for this growth, construction firms need to learn to “better position themselves to manage the supply side and capture increased demand.”
Technological Construction Trends
The Rise of Mobile
The American Construction workforce is becoming increasingly mobile, and this is just one of many key construction trends in 2015. According to a report by EMA Contractors, 82% of contractors now use a smartphone, with 68% saying they use it throughout their workday on-site. Contractors are increasingly using mobile phones for making purchasing decisions relating to material (40%) and more than half (56%) say smartphones are the fastest growing technology device within construction, followed closely by tablets (20%). Smartphones are being used for a multitude of things, like organising projects, speaking to colleagues and increasingly utilizing mobile applications like time-tracking software to help with conduct business online by offering unique project management and resource planning tools. There are also tools aimed specifically at construction like Redtrac , which allows for GPS tracking and Geofencing, which allow construction managers to manage their payroll systems for contractors.
Move Away From Paper
There has been a significant shift within the American construction sector towards digital products, particularly relating to paper. Now new construction management software makes it easier for managers to look after project efficiency and deal with large amounts of documents. Procore and Clarizen seem to be two of the most popular applications used for the correlation of paper documents. Followed closely by BuildTools Construction Management, which allows construction managers to communicate efficiently with their subcontractors and on-site managers. This construction trend is only likely to get bigger.
BIM is Here to Stay
Building Information Modelling (BIM) has quickly become one of the biggest construction trends in 2015. The tool allows for the digitization of a construction project in order to give an overview of a project before the building process has begun. Its rise can be directly attributed to the shift to a more technological savvy culture where computer technology is being used to help with the formation of construction projects. The technology is also being used as a tool by safety managers to prevent on-site injuries. According to a piece in Construction Dive, an increasing number of construction industry safety experts are “encouraging the use of BIM as a tool to prevent job-site deaths and injuries involving falls and burns.” According to the piece, construction firms have used BIM to develop a “4-dimensional simulations of their planned work sites” to give them an idea of how workers could be exposed to safety threats from “open elevator shafts to the protections that will be needed for pedestrians passing by the job site.”
Workforce Management
Technology has also allowed the introduction of software tools which allow you to manage your contractor workforce, their documentation, qualifications and training. Increasingly, the old methods of face-to-face management are moving towards a more streamlined approach which may blend online tools with human interactions. GoContractor, for example, allows your orientation paperwork and custom training to be conducted through an online platform. Instead of spending copious amounts of time repeating yourself in a classroom environment, contractors can now self-register, upload documents and get fully orientated before they arrive on day one. The management dashboard allows you to easily manage your contract workers and organise the flow of workers on multiple sites. This construction trend in 2015 will only get bigger in 2016.
Regulatory
There are a number of regulatory construction trends impacting the industry in 2015. Firstly, the Occupational Health and Safety Administration (OSHA) has new inquiry reporting rules in place meaning companies must report a fatality within eight hours, report in-patient hospitalization of one or more workers within 24 hours and report amputations or eye losses within a 24-hour time period. In June, new rules were put in place to ensure all chemical labels and safety data sheets must conform to the “globally harmonized system of classification and labelling of chemicals”. OSHA, also require that you treat temporary workers the same as your existing employees. The enforcement of this rule has only increased with the shifts in the American workforce to more contingency workers, who make up for 40% of the US jobs market. According to OSHA guidelines, both the host employer and staffing agencies have shared responsibilities for the health and safety of temporary workers. For example “staffing agencies might provide general safety and health training and host employers provide specific training tailored to the particular workplace equipment and hazards.” Companies are also receiving higher OSHA citations and increasingly paying more fines, according to reports, with the average fine at $2,067 for 2014. The number of cases where the fines hit $100,000 also went up from 2013 to 2014, according to the numbers.
In the UK, new Construction Design and Management (CDM) Regulations 2015 were launched by the Health and Safety Executive (HSE) to safeguard the health and safety of construction workers. The document outlines the law for all construction projects and the responsibilities of each contractor in relation to compliance of appropriate health and safety methods. The HSE have also been quite forceful in outlining a clear plan for the construction sector, which is particularly relevant considering the recent pick-up in construction. According to the HSE’s Plan of Work document, research tends to suggest that when the market picks up there’s an increase in construction accidents and fatalities. “We want to make sure history doesn’t repeat itself so we are challenging the industry to be ahead of the game,” said the HSE’s Heather Bryant, the Chief Inspector of Construction. This is why in 2015, the HSE have been quite forceful in alerting construction firms to health and safety risks and have said that as pressures increase, and less “experienced workers are hired”, the need for efficient training couldn’t be greater. All of these construction trends impact greatly on the sector, giving us hope for even bigger construction trends in 2016.
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