New Year, New Drivers for Commercial Construction Industry

By Bud LaRosa

The New Year is here! Looking ahead to 2014, many constructors are feeling more optimistic than they have since 2008. As the construction industry heads further into 2014, there are certain factors that will shape and impact the industry.  

We expect more construction starts in 2014 than in 2013, though unfortunately not all areas of the country will see the same growth rates.   The “shale gale” states will see rapid growth, while other states will see gradual or incremental improvement in construction. Tocci is located in Massachusetts, and in Boston specifically, the construction industry is once again growing with increases in areas such as biotech, life sciences and healthcare.
Green construction is another trend running concurrently with this growth forecast. In 2013, green construction rose to $100 billion, compared with $10 billion in 2005. By 2016, it is expected to reach $250 billion.   Most projects now incorporate some level of green construction and this trend shows no sign of abating soon.

Delivery methods
Delivery methods are changing, as many companies have started embracing Lean construction and Integrated Project Delivery. Companies are beginning to combine lean, IPD and other collaborative methods to better align business interests of all parties.

Technology
Building Information Modeling will continue to become the standard work process for designers and contractors. BIM users are moving toward higher-end capabilities, such as modeling safety exposures and protection, improving installation sequencing operations and identifying opportunities for design optimization. More sophisticated users are starting to tie the model to billing for example: color coding what has been paid, not paid and needs to be completed. These advancements will gain wider adoption and spawn even more complex capabilities.

The price of technology continues to decrease while the ease of use accelerates. Tablets and smartphones are now the norm. These integrated tools allow for “paperless” projects such drawings, RFIs, CORs and compliance notifications, to be shared between the project site, all the trades, home office(s) and the client.

Additionally, more companies will move to the cloud, which allows contractors to seamlessly share files of any size with virtually unlimited power. Cloud-based solutions will help increase collaboration among teams and will improve efficiencies. The collaboration needed to deliver projects will also help facilitate the move to the cloud.

Labor
Acquiring skilled labor is going to be an issue in 2014. After 2008, a lot of skilled workers left the construction industry to find other employment and will likely not return.

Companies need to combat this skills shortage with creative ways to both retain existing employees and train their new staff. Many companies are starting to implement mentoring programs to start transferring knowledge from those with more than 30 years of experience to new employees.

Tocci uses individual development programs to work with each employee on his or her professional development goals. Other companies are implementing sabbaticals, wellness programs, or professional coaching to help with employee retention. It has been shown that positive company culture and employee appreciation are top factors that contribute to employee happiness.      

Prefabrication/modularization
Prefabrication has been happening for years — especially with mechanical and electrical trades. What's different now is the transition from prefabrication to multi-trade componentization and modular construction. Driving this is more collaborative delivery systems, including IPD, and various forms of design-build. None of this could happen efficiently without BIM — which allows greater coordination of design with construction.

The biggest driver is that modular saves time. Modular helps end users bring their projects online substantially faster. Modularization will also help address the impending skilled labor shortage.  

Repetitive design projects such as multiunit, hotels and hospital rooms are the likely candidates for prefabrication in the near term. As traction builds other industry segments will follow.

As the construction industry moves into 2014, we will be exposed to a lot of new opportunities and challenges. What we do to prepare for these opportunities will help determine success throughout the year. All in all, 2014 promises to be a good year for the industry.

Bud LaRosa is chief business performance officer at Tocci Building Companies.