February 2024: Construction Industry News Roundup

A lot has happened in the industry since our last news roundup.  

As we head into spring and prepare to say goodbye to winter construction conditions ahead of project backlogs slated warmer weather, here are some recent headlines to help you negotiate the dynamically changing industry.

Jump Ahead: 

1. Biden Administration Doubles Down on Infrastructure Projects 
2. BuiltWorlds: “Little Hope for Owners Seeking Signs of Lower Construction Prices”  
3. Industry Labor Shortage Is Global (Leading in Some Cases to Poor Work-Life Balance)  
4. Regulatory Change Could See Contractors Classified as Employees 
5. Construction Productivity a $40 Billion Annual Problem 
6. Bad Weather, High Mortage Rates Hit Housing Market Hard   
7. Initiative from Department of Labor Aims to Protect Workers from Silica Dust 
8. The ABC Releases AI Resource Guide for Contractors  
9. Sustainable Construction Projects (and Solutions) Surging  
10. Construction Technology News 

1. Biden Administration Doubles Down on Infrastructure Projects

Reported in Roads & Bridges magazine, President Biden and U.S. Transportation Secretary Pete Buttigieg announced in January that over $4.9 billion in federal funding would go to 37 projects through two major discretionary grant programs, the National Infrastructure Project Assistance (Mega) grant program and the Infrastructure for Rebuilding America (INFRA) grant program.  

Roads & Bridges Magazine highlights some of the major projects, including: 

• The Interstate Bridge Replacement Program - $600 million will go to this project. The goal is to update Interstate 5 with a seismically resilient replacement of the I-5 bridge over the Columbia River. 
• The Eastern Pittsburgh Multimodal Corridor Project - $142 million will make multimodal improvements in the I-376 (Parkway East) corridor of Pittsburgh. 
• The Sagamore Bridge Project - $371 million will go to this project to restore and modernize the nearly 90-year-old Sagamore Bridge in Cape Cod, Mass. 

Source Attribution: Roads & Bridges Magazine 

The full list of projects is also available.  

2. BuiltWorlds: “Little Hope for Owners Seeking Signs of Lower Construction Prices”

Our friends at BuiltWorlds released new data with an accompanying, sobering headline: “Latest Data Offers Little Hope for Owners Seeking Signs of Lower Construction Prices.”  

Despite a three-month decline, the Associated Builders and Contractors told a similar story with construction input prices surging by 1% in January compared to the previous month and up .4% when compared to a year prior – due in large part to energy costs. 

The team at BuiltWorlds summarizes some worrying statistics that unfortunately the industry is not ignorant to: 

• The news release contextualizes these pricing challenges, noting, the industry is “contending with higher interest rates and materials costs [...] increasingly frustrated by an industry that seems to be shrugging as it passes along cost increases at a rate that outstrips inflation.” Further, they signal issues the industry has long dealt with pertaining to talent:  
• “Beneath the good news around the resiliency of the construction industry” (i.e., the industry for the first time passing 8 million employees), unfilled jobs remain steady and “hourly wages point to a sector that is still very much struggling to meet demand.” In 2022, we offered a forecast on how the skilled trades talent market has been changing and offered advice on how to attract in-demand skilled trades outside of sheer monetary compensation (e.g., culture in construction remains a critical area to focus on shaping).  

3. Industry Labor Shortage Is Global (Leading in Some Cases to Poor Work-Life Balance)

Labor shortages are felt hard in U.S. projects. For example, while construction job openings reached their highest since 2022 in January, the ABC nonetheless reported that “Contractors continue to grapple with skilled labor shortages even as the demand for and supply of labor in the broader economy rebalances." ForConstructionPros highlights from the ABC that industry job openings decreased by 21,000 last month and are down by 39,000 from the same time last year, revealing a trend where “Construction Job and Labor Data Shows [a] Consistent Worker Shortage.” 

And these talent gaps are not isolated to the U.S. market. For example, CNBC reports that Israel, combatting a “dire labor shortage,” is recruiting Indian migrant workers to fill staff shortages, while UK-based Planning, Building & Construction Today reports that construction leave entitlement in the UK has dropped by 6.6% according to a report by AccessPeopleHR – due in part to “staff shortages and increased workloads, which has made it difficult for employees to use their full annual leave entitlement.”  

Further, the ABC reported that government-registered apprenticeship programs are not keeping up with industry demand, while they they’ve signaled to congress that expanding career pathways is vital to addressing the construction workforce shortage (a point we’ve similarly made that's vital to driving interest in careers in construction among young people looking to take advantage of high-paying apprenticeships and building not only lucrative but also rewarding careers). 

4. Regulatory Change Could See Contractors Classified as Employees

EHS Today reported on regulatory change from the Department of Labor (effective March 11, 2024) that could see contractors reclassified as employees within an organization for the first time. And misclassifying employees could come with serious consequences:  

“Misclassifying employees as independent contractors is a serious issue that deprives workers of basic rights and protections,” Acting Secretary of Labor Julie Su is reported by EHS Today in saying, urging contractors to assess their situation under the new change.  

Also compelling: CNBC reports that, under the new rule, workers could recover lost wages.  

5. Construction Productivity a $40 Billion Annual Problem

Back in October, Construction Dive reported on an FMI Corp report that measured construction productivity to be a $30 billion to $40 billion annual problem affected by planning, communication, and collaboration 3 in 4 times. 

I authored a thought piece in the Project Management Times on the heightened importance of project managers in the construction industry, perhaps those absorbed from big tech’s recent unrelenting layoffs, to curb these budget-bloating productivity issues through heightened project resource allocation, project coordination, and the implementation of construction technology (and technical debt planning) to drive greater efficiency, real-time data management, and rapid response in project management to dynamic project needs.  

6. Bad Weather, High Mortgage Rates Hit Housing Market Hard

U.S. News reported construction of new homes fell by 14.8% in January.  

As you would imagine, bad winter weather was partly to blame, disproportionately affecting areas affected by winter storms, such as the Northeast and the Midwest, where new starts dropped respectively by 20.6% and 30% month-to-month.  

“High mortgage rates [...] caused starts and permits to fall from December,” said corporate economist Robert Frick at Navy Federal Credit Union. “We know that builders are ready to ramp up when rates fall, which could be as soon as spring,” he added.  

7. Initiative from Department of Labor Aims to Protect Workers from Silica Dust

A recent development, ForConstructionPros reports comes from the Department of Labor’s Occupational Safety & Health Administration (OSHA) in the form of a new initiative that aims to protect workers against silica dust exposure, which is identified as “a health hazard for workers involved in manufacturing, finishing and installing natural and manufactured stone” and including “the man-made, engineered artificial or cultured types.” 

According to ForConstructionPros, the initiative will: 

focus enforcement efforts on industry employers to make sure they’re following required safety standards and providing workers with the protections required to keep them healthy. It establishes procedures for prioritizing federal OSHA inspections to identify and ensure prompt abatement of hazards in covered industries where workers face exposure to high levels of silica dust. 

As part of the initiative, OSHA is sending affected employers and stakeholders information on the initiative, including fact sheets on dust control methods and safer work practices for engineered stone manufacturing, finishing and installation operations. 

Source: ForConstructionPros  

Further, the Environmental Protection Agency (EPA) instituted a strict particulate matter (PM 2.5) standard affecting emissions including dust (via Institute for Energy Research). 

Dust has long been a problem in the construction industry, contributing to pollution and affecting worker safety. Construction sites in India, for example, have recently been subject to dust checks to curb pollution. Scholarly studies have explored the effects of particulate matter pollution from dust on construction sites as well as the efficacy of dust suppression technology in urban construction sites, while these byproducts have demanded manufacturers to deliver solutions – like the OSHA-compliant dust solutions from Milwaukee Tool. Regulations from OSHA previously reported in Equipment World saw OSHA requiring a reduction in jobsite crystalline silica in 2017. 

The new guidelines from OSHA represent a continued commitment to protecting workers against these hazards (and reduction of excessive pollution) from jobsite crystalline silica. 

8. The ABC Releases AI Resource Guide for Contractors

We’ve previously written extensively about the possible use cases of artificial intelligence (AI) in construction, the ethical implications, and have interviewed subject matter experts across specialties about how to implement generative AI in construction responsibly. Chief Information Officers (CIOs), for example, have overwhelmingly (9 in 10 CIOs) signaled worries about AI’s accuracy, Construction Dive reports.  

Off the heels of a Construction Dive report that revealed most employers lack guidelines for using AI (original report from Gallagher), the Associated Builders and Contractors (ABC) has taken AI guidelines seriously and a step further, announcing an AI resource guide for contractors. 

“[W]e must approach AI in construction as beneficial with a balanced view that includes continuous evaluation, developing ethical guidelines and increasing awareness about what AI can and cannot do,” said Matt Abeles, ABC vice president of construction technology and innovation. 

9. Sustainable Construction Projects (and Solutions) Surging

The shift to sustainable construction remains a critical imperative and there are multiple milestones to report. 

Construction Dive reports that, although the demand for EVs have dipped, “EV-related projects are continuing to help power the construction industry” with electrical machinery construction (including EV battery plants) reaching $35.2 billion in 2023 and accounting for roughly 47% of overall manufacturing construction.  

The Biden administration aims to reach net-zero greenhouse gas emissions by 2050, creating as part of this goal grant programs from the Federal Emergency Management Agency (FEMA) when rebuilding schools, hospitals, fire stations, and other infrastructure after a disaster. Construction Dive reports solar microgrids, heat pumps, and passive cooling among the eligible projects for FEMA funding. 

What’s more, to meet the needs of the solar industry, Milwaukee Tool’s controlled torque compact- and mid-torque impact wrenches have recently been announced and can be set up to deliver industry-leading repeatability (via proprietary machine learning algorithms and IoT sensors) to address the demanding needs of utility-scale solar installations that require a high degree of accuracy and compliance.   

10. Construction Technology News

Construction Dive announced the top nine contech deals of 2023, including EquipmentShare ($440 million); Boston Metal ($262 million); modular builder Gropyus ($109 million); property management SaaS startup Infogrid ($90 million); green concrete startup Carbon Cure ($80 million); cleantech startup Ubq ($70 million); software developer Percepto ($67 million); modular builder Mighty Buildings ($52 millions); and commercial contractor SaaS company BuildOps ($50 million). 

Furthermore, Construction Dive also reported that NASA has been testing autonomous construction robots. 

Bottom Line 

The industry faces existential threats from a business viability standpoint simultaneously as our planet faces existential climate concerns – but the industry is equally poised to address these needs through innovative technology and sustainable practices that help shape the world we all occupy.