When the Great Recession hit in the late 2000s, the construction industry took one of the heavier blows as housing starts and remodeling projects dried up.

Now those days seem like a long time ago as the industry has started to pick up steam again with 2015 expected to be a year of dramatic growth.  But coming out of the bust season and into the boom brings with it some challenges for the industry.

Finding Talent is a Key Challenge

During the bust, there were tons of layoffs, many of those workers either retired or found new careers.  The Bureau of Labor Statistics reported that in January 2015, 39,000 construction jobs were added, a significant increase over the average job growth rate of 28,000 new positions per month.

Those workers that retired or started another career path are likely not coming back, which means the construction industry doesn’t have access to enough employees. Some 83 percent of contractors say they have had trouble filling craft positions.  Carpenters, roofers and equipment operators are some of the more sought after and difficult to fill positions.

Once they hire workers though, the challenges continue as employee wages, benefits, healthcare costs and taxes top cost concerns for contractors in 2015.  To enforce this worry, the Associated Builders and Contractors (ABC) reports compensation costs will rise more quickly per worker next year. Furthermore material price inflation is set to rise in 2015, leading to potential price increases close to 3 percent. 

Industry Growth is on the horizon

These challenges aside, the economic underpinnings of the industry are driving a return to growth. ABC forecasts that nonresidential construction spending will expand by roughly 7.5 percent, with the largest growth in power, lodging, office space and manufacturing.

One significant change is that instead of buying equipment, contractors may opt to save capital in 2015 by renting, with 62 percent of equipment distributors and rental companies reporting they are renting more equipment to contractors than a year ago, according to Construction Equipment.

Technology is Creeping into the Construction Industry

Outside of the rental and spending increases, another trend to watch for is the increasing impact of technology on the construction landscape.

According to the blog post by American Roll Form, three big technology trends are set to affect the construction industry in 2015:

• Big Data – Construction equipment can be outfitted with sensors and other data collectors to provide a wealth of new info on job site efficiency. Worried about gasoline usage on idling machinery? Data on this can be tracked and provide guidance on how to improve. Collecting and analyzing data about construction builds will help contractors better manage projects with better project efficiency.
• Cloud and mobile access – Ruggedized phones and tablets with high-speed 4G connections are allowing contractors to collaborate with experts, architects and other colleagues and to communicate status updates with the client.
• Cybersecurity – Remember the Target breach that originated from its HVAC vendor? No industry is safe from a cyber attack – so while big data and mobile will help the construction industry be more efficient and connected, it’s important to ensure the data is protected as well.

Make 2015 Count

$612 billion – that’s the projected total for U.S. construction starts for 2015, according to data from Dodge Data & Analytics. 

Turning that into a profitable business will take diligence and attention to trends in hiring and technology. But if done correctly, 2015 will be an excellent and very successful year.

Many construction companies work with BizX to ensure they’re keeping tight controls on their budgets and to maximize their resources and inventory. The BizX Marketplace is a place for those companies to network with other companies for the cashless exchange of services and materials.