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Five Construction Industry Trends To Look Out For In 2017

For the last two years, the construction industry dominated the job market and had a lot of job diversity. Now in 2017, there is new hope for an increase in infrastructure spending, project collaboration, and a stronger foothold in the market. As the economy continues to grow, construction jobs in 2017 are also expected to grow.

Construction experts from different divisions predicted their expectations for 2017. While questions concerning the implications the new administration will have on development ruled the discussion, they weighed-in on the new advancements, and workforce administration patterns they hope to shape the construction business for 2017.

1. Collaborative project delivery methods will become more popular

The days of design-bid-build domination might be winding down, as experts expect collaborative approaches to become more common for projects. Design-build, public-private partnerships and integrated project delivery are three of the most often-cited methods that are altering the industry and are likely to gain ground in 2017.

“There will be a continuing and expanded trend towards project team collaboration. I call that moving from an art to a science,” said Sue Klawans, senior vice president and director of operational excellence and planning at the Gilbane Building Company. “The owner-architect-contractor, if we happen to build a good relationship, it’s an art. All the research and demonstrated achievements are coming from starting to organize thoughts about that and figure out what are the factors that allow a team to collaborate better.”

The design-build process consolidates the design and construction phases into one contract, while the less common IPD arrangement involves the owner, architect, contractor and other project stakeholders entering into a single contract in which they collectively determine project goals, costs, risk-sharing and compensation.

“Design-build is taking hold,” said Michael Vardaro, managing partner at Zetlin & De Chiara. “It allows more collaboration and gets you to the completed product much faster.”

On the public sector side, P3s involve a government entity hiring a group from the private sector to design, finance and build a large project. That group will then operate and maintain the facility for years before turning it back over to the owner.

2. The labor shortage will continue to plague the industry

One trend that the industry hoped would fade away is, instead, raging on. The skilled labor shortage is a major concern for firms across the U.S. as employers struggle to staff their job sites. “If the economy stays strong and there’s continued investment in infrastructure, I don’t see the shortage going away,” Klawans said.

This trend is lingering after a huge chunk of the construction workforce were forced to leave the industry for other jobs during the recession when their work disappeared. Between April 2006 and January 2011, the construction industry eliminated more than 40% of its work force, cutting nearly 2.3 million jobs. Unfortunately, a significant portion of those workers haven’t returned.

A lack of technical training in schools and less emphasis on the trades are also contributing to a smaller pool of workers entering the industry. Combined with an aging workforce, those factors are creating a struggle for construction firms seeking employees for positions ranging from skilled trades to managerial roles.

Aside from the long-term implications of a dwindling labor pool, firms are feeling the immediate impacts of the worker shortage, as it can lead to higher costs and longer project schedules.

3. The feeling of uncertainty will linger under the new administration

Last year was defined by uncertainty, as construction firms awaited the results of the presidential election. The next administration has the power to significantly alter regulations, taxes, labor policy and countless other aspects of business.

With Donald Trump winning the election, many firms were cautiously optimistic about his construction and development background, his promises to cut regulations and his massive infrastructure proposal. However, experts say the feeling of uncertainty hasn’t disappeared — and likely won’t in the months to come. That fear of the unknown could keep owners from starting or continuing new projects.

4. Offsite/modular construction will gain a stronger foothold in the market

Offsite construction, also called modular or prefab, isn’t new to the industry. However, experts predict the building method will grow in 2017 as quality, time and labor concerns make alternatives to traditional construction methods more attractive.

One obstacle holding offsite back from stronger growth has been the industry’s slow-to-evolve nature, but Julian Anderson, president of Rider Levett Bucknall, believes the method is starting to overcome that hurdle.

“It’s one of those things that people figured out would be a good thing to do. I’ve seen the problem being that no one wants to be the first to do it. If I’m the first and it fails, I’m an idiot,” he said.

Klawans noted that the first element of modular to take off in the industry are HVAC assemblies created offsite. Those contractors are finding that offsite methods allow them tom reduce hours onsite, improve efficiency and perform more subassemblies than in the past, according to Klawans. She said that as more firms utilize offsite construction, they will see the benefits, and other companies will in turn try out the method.

5. Construction firms are cautiously optimistic for a future infrastructure spending boost

Infrastructure spending saw major play during the 2016 campaign, with President-elect Donald Trump proposing a $1 trillion infrastructure plan over 10 years. Although light on details so far, the plan involves trading an 82% tax break for private equity investment in revenue-generating infrastructure projects.

That emphasis on rebuilding the nation’s infrastructure shone a spotlight on the construction industry, as a lack of steady federal funding has left many contractors uncertain about when their next projects will start. With a potential $1 trillion funding infusion, companies in that sector are optimistic about the years ahead — if Trump and Congress are able to agree on a path forward.

“When Trump says at his victory speech he wants to put $1 trillion into infrastructure and mentions public-private partnerships, that gets everybody excited,” Eliopoulos said. “His plan is short on details, so it’s difficult to tell exactly what he’s got in mind.”

The impact of such a massive infrastructure plan
goes beyond firms in the infrastructure sector, according to Meurer. “Anybody that does both might focus more on [infrastructure projects] and allow opportunities for the other projects to spread to the market,” creating a boon for firms in the vertical construction business, he said.

For more information on construction trends, contact USI online to find a branch near you. USI believes in excellence in every step of the process and ensures timely completion and quality of service, time after time.

Article Source: Construction Dive