{"id":7204,"date":"2021-02-18T00:00:00","date_gmt":"2021-02-18T00:00:00","guid":{"rendered":"https:\/\/bxglobal.wpengine.com\/ca\/construction-industry-challenges\/"},"modified":"2022-06-16T21:55:44","modified_gmt":"2022-06-17T02:55:44","slug":"construction-industry-challenges","status":"publish","type":"post","link":"https:\/\/stage.buildxact.com\/ca\/blog\/construction-industry-challenges\/","title":{"rendered":"5 major construction industry challenges right now"},"content":{"rendered":"

Residential construction is a\u202fleading sector<\/a>\u202fin the U.S.\u2019s economic recovery following the impact of the COVID-19 pandemic.\u00a0While the pandemic halted or changed the way most industries do business, the construction industry, for most of the nation, was and still is considered essential. Construction projects were mostly able to continue.<\/p>\n

The construction industry today is facing many challenges.\u00a0We have outlined the top five\u00a0challenges\u00a0to watch now to\u00a0help you\u00a0prepare your construction company for success\u00a0in the short and long term and complete construction projects on time.\u00a0If we learned anything about this year is that\u00a0change\u00a0is\u00a0inevitable. How your business adapts to change and the challenges in the construction industry can\u00a0have\u00a0a real impact on construction companies everywhere.<\/p>\n

<\/b>1. Navigating the lack of <\/span><\/b>s<\/span><\/b>killed labor and labor shortages<\/span><\/b>\u00a0<\/span><\/b>\u00a0<\/span><\/h2>\n

Since the housing market crash and subsequent great recession, the construction industry faces a lack of skilled labor in the workforce. Many skilled laborers lost their job or transitioned out of the sector through job training programs leaving the industry with a skilled labor challenge.<\/p>\n

The\u00a0average age of the current skilled worker is 50 years old, and this is the second or third time they\u00a0have\u00a0experienced\u00a0a bout of joblessness. Besides, the\u202fCoronavirus Aid, Relief, and Economic Security Act (CARES Act)<\/a>\u202fmeans many workers\u00a0get\u00a0more compensation through unemployment benefits ($600 more, on top of each state\u2019s unemployment compensation), making returning to the job site less attractive at this time.<\/p>\n

The lack of skilled labor and labor shortages will need to\u00a0be sorted\u00a0by\u00a0doing more with less. Instead of bringing\u00a0on employees\u00a0that increase overhead costs, hire\u00a0contractors\u00a0with specific skills.\u00a0Now is\u00a0also\u00a0the time to bring on\u00a0new technology\u00a0to streamline\u00a0processes and increase productivity.<\/p>\n

Construction professionals need to get creative with existing construction methods to tackle the rising cost of materials and the lack of skilled workers. All of these challenges make it difficult to complete construction projects on time to make a profit.<\/p>\n

\u00a0<\/span><\/b>2.\u00a0<\/span><\/b>The increased risk of COVID-19<\/span><\/b>\u00a0on a crowded job site<\/span><\/b><\/h2>\n

As well as\u00a0the standard construction safety protocols, the Occupational Safety and Health Administration (OSHA) has also published\u202fguidance and recommendations<\/a>\u202ffor construction site \u202fsafety and health standards. Still, there isn\u2019t a formal COVID-19 construction industry outbreak tracker. The lack of a national tracking system in place for construction-related COVID-19 outbreaks means many go unreported.\u202f It is important to have strong safety programs in place to make sure small businesses are negatively impacted further by the pandemic. While some state and municipal governments have measures in place, it’s on each company to implement measures to protect employees.<\/p>\n

Once there is an outbreak on the job site, it runs the risk of a shutdown in an effort to keep workers safe. This can delay a construction project and lead to losses on the job. Other\u00a0industries\u00a0have the opportunity to work remotely, and in most cases, that\u2019s not an option for job site construction work. Project managers, general contractors and others, have to be at the construction site.<\/p>\n

While the construction industry\u2019s challenges include consistent workplace safety policies, now is the best time to\u202fadopt new technology<\/a>\u202fenabling a safer workplace\u00a0and\u00a0ongoing and timely communication. New technologies will help your team work smarter and faster. Inadequate planning in the implementation can lead to headaches.<\/p>\n

While younger workers might pick it up quickly, others might not. Ensure everyone is adequately trained on new \u202f\u00a0tools and procedures. Leadership should provide the proper training to make sure the team is completing projects on time.<\/p>\n

Now, more than ever, it’s important for the construction industry to monitor emerging technologies that can help boost productivity and profits. Technology adoption is vital to continued success and to navigate new challenges that may arise.<\/p>\n

Empower\u00a0your\u00a0employees and contractors\u00a0to stay on the job and\u00a0help\u00a0each other by developing\u00a0a simple safety program. Offer incentives for\u00a0following and staying safe on construction sites. For example, after 60 days\u00a0free of health or safety issues, bring in a food truck for lunch or an extra paid vacation day.<\/p>\n

Given the labor statistics, it is important to keep employees safe and happy a the same time. While it might be hard to offer many benefits, showing employees you appreciate them by bringing in a food truck or offering another vacation day can help construction workers feel appreciated, especially the younger generation.<\/p>\n

<\/b><\/b>3. M<\/span><\/b>anaging unstable m<\/span><\/b>aterial costs and\u00a0<\/span><\/b>rocky\u00a0<\/span><\/b>supply chain\u00a0<\/span><\/b>\u00a0<\/span><\/h2>\n

The pandemic caused\u00a0shutdowns in lumber mills<\/a>\u00a0this past spring\u00a0during\u00a0the rise in DIY remodeling and the booming housing market. As a result,\u202flumber prices skyrocketed\u202fonce they reopened, causing prices to rise on other building product materials.<\/p>\n

As\u202flumber prices continue to increase, dealers are stocking up.\u00a0The supply chain can cause people in the construction industry many headaches, so it’s important to always be prepared. Finding the required construction materials has been a challenge.<\/p>\n

Yet, as\u00a0lockdowns across the northern hemisphere due to the lingering pandemic\u00a0and\u202fdemand for commodities\u00a0decrease, we will likely see pressure for lowering\u00a0prices.\u00a0\u00a0Supply chains should start to see some relief as things start shifting back to normal.<\/p>\n

Still, this has caused many to think of ways to avoid a similar supply chain headache in the future that causes material costs to increase. Many hope emerging technologies can provide a solution.<\/p>\n

<\/b>4. Add technology to gain a competitive edge<\/span><\/b><\/b>\u00a0<\/span><\/h2>\n

One of the biggest challenges facing the construction industry has been the slow adoption of technology.\u00a0But this is changing. Customers are tech-savvy, and there\u2019s no better time to\u00a0bring on\u00a0new\u00a0technology while social distancing on job sites, communicating with customers more often, and navigating what\u2019s next.<\/p>\n

While the pandemic has fast-tracked the industry forward and\u202faccelerated technology adoption<\/a>, knowing what technology solution to choose can be daunting for the small builder, remodeler, and contractor, there are many solutions to choose from, and some are more powerful than others.<\/p>\n

Technology that fits your business\u00a0and is quick to learn\u00a0allows you to control how you propel\u00a0your\u00a0business forward. The things you\u2019re doing day in and day out\u00a0that take up most of your\u00a0time are\u00a0the same things you should be\u00a0doing\u00a0on a software platform, like\u00a0estimating\u00a0jobs<\/a>\u00a0and\u00a0managing\u00a0subcontractor\u00a0quotes<\/a>.<\/p>\n

<\/b>5. Make the money you deserve<\/span><\/b><\/b>\u00a0<\/span><\/b>\u00a0<\/span><\/h2>\n

Cash is king\u00a0and keeping an eye on your\u202fcash flow is critical<\/a>. One of the construction industry issues is that builders are not proactive in their cash flow management. It\u2019s essential to understand a few key points to make a profit: what is the breakeven point, what are the fixed costs, and how much is left over.<\/p>\n

Margins are getting smaller, and the opportunity to\u202fbuild and maintain relationships\u202fwith customers is becoming more challenging. Relying on video conferencing\u00a0instead of meeting face-to-face\u00a0makes it harder to make a deal in the construction business.<\/p>\n

It\u2019s vital to stay disciplined with bids and not bid work too low, especially considering increased costs of certain materials and difficulty finding labor.\u00a0Check out Leslie Shiner\u2019s\u00a0A Simple\u00a0Guide to Turning a Profit as a Contractor<\/em><\/a>\u00a0for support to get you on your way to making the money you deserve.\u00a0Leslie\u00a0is a well-known financial consultant for the building industry and is a partner in\u00a0The Shiner Group<\/a>.<\/p>\n

The right project management software can set you up for success<\/strong><\/h2>\n

The hardest part of being a successful builder and business owner is not the craft of building. It\u2019s the day-to-day running and growing your business. The issues facing the construction industry affect large and small companies alike, but\u00a0identifying the challenges ahead and how to navigate them will be key to your success:<\/p>\n

    \n
  1. Hire contractors with specific skills<\/li>\n
  2. Streamline your processes and increase productivity<\/li>\n
  3. Empower\u00a0your\u00a0employees and contractors with safety standards<\/li>\n
  4. Add technology<\/a>\u00a0to gain the upper hand and boost productivity levels<\/li>\n
  5. Manage your cash and make the money you deserve\u00a0moving forward<\/li>\n<\/ol>\n

    Knowing what\u2019s on the horizon can help you manage the problems you meet with your construction project management and successfully navigate the challenging times.<\/p>\n","protected":false},"excerpt":{"rendered":"

    This blog shows challenges facing the construction industry such as supply chain, accelerated technology adoption and proper cash flow<\/p>\n

    Industry insights<\/span><\/a><\/div>\n","protected":false},"author":1,"featured_media":4211,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25],"tags":[139],"contributing_author":[],"class_list":["post-7204","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-industry-insights"],"acf":[],"yoast_head":"\n5 major construction industry challenges right now | Buildxact CA<\/title>\n<meta name=\"description\" content=\"This blog shows challenges facing the construction industry such as supply chain, accelerated technology adoption and proper cash flow\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 major 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