The start of the year 2020 has been very challenging for a lot of industries. Construction is especially at the brink of collapsing in some places in the world like in Dubai where a huge population of foreign construction workers was sent home. The common problems in streamlining construction crew management, labor shortage, and material costs are still a headache, but apart from those, there are new issues that the industry needs to tackle if it wants to make it through this year.
Of course, it is impossible to see the construction industry dying, but going on hiatus is a probable scenario.
It was projected earlier this year that the construction cost is likely to increase by 6.3% this year, rising from $1.341 trillion in 2019 to $1.486 trillion. And this serves as the main problem of the industry this year. The runner up goes to employment issues. The shortage of skilled workers is still lingering, and it seems to stay that way throughout the year. Robotics is helping fill the shortage in firms that are already using technological solutions. But it seems like this year, more firms will be more open in leveraging robots at the site now that the world is facing a new pandemic and it seems like it’s here to stay for a while. Otherwise, firms should expect to struggle in delivering their project on time and within the budget.
And like we said, there are more challenges to face and if contractors aren’t quick to come up with solutions, then they might see their businesses losing precious opportunities that will be hard to come by in the next months or even next year.
Now, let’s look closer at the problems that may affect the industry this 2020.
- Material Costs
Nothing is free in the world of business, and unfortunately, material costs in construction will keep rising. Despite another crisis posed to affect the industry, the price of raw materials will still have a higher price tag this year. Mainly because raw materials will be more difficult to process this year. Businesses are at a slow pace right now because of the health issue we are facing. That means, businesses providing construction materials are operating with limited people while paying higher labor costs. Consequently, they need to raise the price to make up for their operational costs.
And this makes it harder for construction companies with ongoing projects this year. The economy is staggered, making it difficult for some projects to afford steel, lumber, aluminum, and other high-quality materials. So, to complete the project, some would resort to using cheaper alternatives, or pause the construction until funds are bountiful once again.
On the other hand, fuel costs for equipment and machines have dropped by a great deal.
- Labor Shortages
Ever since the financial crisis in the late 2000’s that led to the great recession, the construction industry has been having a hard time finding new skilled workers to hire. Sadly, all those high-quality crew members laid off during the recession have already moved on to a different career before the industry could even recover.
And even of some of them are still willing to come back, these people are already 55 years old or older, so they might only be able to render a few years before they finally retire. Plus, the fact that they are no longer as strong as they used to be, which could be a disadvantage in an industry where strength is a worker’s main tool.
Now, the rise of technology is what is making it more difficult for construction companies to attract younger workers. Most millennials prefer going to offices than doing manual work. They’d like to work around computers and other innovative gadgets like AI, AR, VR, MR, hybrid cars, and so on. With people becoming more tech-savvy, they would continue to put construction work at the last of their options.
But it is also technology that the industry is using to fill in the deficit, where robots are the main alternatives to human labor. AI, big data, digital solutions like construction project management software, AR, VR, BIM, and drones are also used to improve the work quality of the existing crew members and also to entice young people who prefer learning trades than going to college to join the construction sector.
- Insurance Costs
No matter how well you prepare for your project or how expensive your safety accessories and PPEs are, the construction site will still remain a high-risk workplace. Unexpected things can happen anytime and that includes accidents. That is why insurance is an important part of the project.
Lately, insurance cost for construction has also increased. And of you aren’t keen in reviewing the coverage you might miss some hidden costs and hidden exclusions in the policy. Common exclusions that you actually need include:
- Defective work— we have emphasized enough in our previous blogs how errors can be very costly. Some policies will not cover these costs and if they won’t, then you’ll end up losing a lot of money to do a rework.
- Employer’s liability—most insurance policies for construction work will cover injuries met at the site. But this does not mean that you are already safe from lawsuits. And when lawsuits happen, you may lose control over your policy as well.
- Stagnant Productivity
The construction industry was found out to have stagnant productivity levels compared to other industries whose productivity rate increased by 15 times since the 1950’s. And there are several factors being looked at by experts that led to this poor productivity of the industry.
First, most companies are still hesitant to embrace technology at the site. Sure, they are using heavy equipment to make some work faster, but overall, the latest innovations that can boost productivity like BIM, automation, and construction crew management software are neglected. Good thing, these days, companies are already realizing the importance of using scheduling apps like Pro Crew Schedule to keep the workers updated with their daily tasks without having to wait for the project manager to arrive at the site or for spreadsheets to be printed and posted on bulletin boards.
Other reasons may include labor shortage, inefficient planning and scheduling, poor construction crew management, wasted time on idling around, and lack of communication and collaboration.
- Safety Issues
As we mentioned earlier, accidents may happen at the construction site by surprise despite all the planning you do and using the latest PPEs. In the previous years, OSHA declares construction work to be one of the riskiest workplaces with death toll and number of injuries continuously increasing.
But at the site, falling debris, slipping, and electrical hazards are no longer the main causes of accidents at the site. These days, overworking crew members can wear them off, hence causing them to lose focus and meet accidents. Lack of safety training and proper safety practices are also other causes.
Those said, you need to balance the work schedule of your members. See to it that they don’t work more than the required time (unless overtime is necessary) so they have enough time to rest and come back to work energized and focused the following day. Safety training should also be prioritized before the operation kicks off. Brief them on the construction plan and design let them know about the probable hazard zones that you detected from using BIM.
Put in mind that safety can help not just in eliminating risks of accidents but also in the prevention of errors, rework, and litigation so put it on top of your pre-construction to-do list.
- Technology Adoption
We have been mentioning in our previous blogs too how a lot of construction companies are still operating with traditional methods. Apart from machines and heavy equipment, they don’t seem to consider using new innovations that can help keep them on top of the computation.
Let us take BIM vs AutoCAD, as an example. AutoCAD has been a longstanding CAD software used in construction for drawing plans, but it could not offer life-like visualization of the project as BIM does. It cannot also predict probable issues using data from the plan like BIM. Overall, using BIM, which is a newer tech for drawing and design, can help the company make a more efficient plan and come up with better mitigation and contingency plans, while AutoCAD will still leave you guessing what issues may arise from the given design.
The same goes for manual project management versus the use of construction project management software. An app like Pro Crew Schedule minimizes site trips for construction crew management, allowing the project manager to attend to other important tasks. Project monitoring through construction project management software gives a more accurate measure of productivity rate than daily site trips.
Despite these advantages that innovations have over traditional methods, some firms would still stick with manual methods because they are not sure how to properly implement technology at the site. They are not also sure whether their crew members are tech-savvy enough to learn how to use the technology.
Therefore, most construction technology providers are improving their designs so that the tools they offer are some enough to use by construction workers.
- New World Crisis
It is unexpected but the new pandemic has a huge impact on the construction industry. While some projects cannot be canceled, their completion becomes slower.
The country had a lot of businesses pausing operation and construction is one of them. Others may still be working but because only a limited number of people can go to work, the productivity level of the construction team is decreased, and the schedule is extended. That means the budget is also affected. With no clear answers yet as to when this thing will be over, it might be possible to see another great recession in the coming months or year.
Sadly, construction’s only remedy to this is to use robotics and virtual collaboration through a construction project management software.
The construction industry is confronted with never ending concerns where labor shortage and material cost have been the longest standing enemies of most construction companies. There are indeed steps that firms can take to make it through these challenges, but there is also this new and scarier problem that it cannot easily resolve.
Overall, technology plays a big role in surviving these problems so firms should start embracing innovation. Using construction project management software, for instance, can help resolve labor shortage issues (through proper scheduling), low productivity rates, safety issues, and so on. So, start considering digital solutions like Pro Crew Schedule to help your firm get over construction challenges.