What is the state of the industry?
Here’s a quick recap of some of the most compelling news stories we came across over the last few months.
Labor shortages have driven the industry into a state of panic.
As featured in Construction Drive, construction industry labor shortages have reached crisis levels, leading contractors to have to “battle for workers,” and the answer to winning over talent doesn’t just lie in higher wages, but rather the whole compensation package—opportunity for career development and training, flexible schedules, merit-based bonuses, and so forth.
Home Depot has launched a program in Houston and the neighboring area in an effort to help job seekers learn critical skilled trades: electrical, mechanical, plumbing, and carpentry. An intensive, 3-week program, it culminates with graduates being connected to participating contractors looking to hire workers.
Takeaway: It’s crucial to build awareness for young workers the advantages of pursuing a career in the trades. Partnering with technical schools and community colleges to create programs where real-world workers looking to enter the industry are found, and connecting real-world employers with the talent they desperately need, can help push projects forward in the short-term and start to revitalize the industry for the long-term.
As reported in Construction Drive, materials costs continue to rise, impacted in part by COVID-19 supply-chain issues; shortages in steel and roofing materials, for example, have hamstrung construction, with lumber prices soaring as high as 40% since mid-august.
Meanwhile, prices for steel mill products have risen 123% YoY in August, according to the Producer Price Index by Bureau of Labor Statistics, while copper and brass surged by 45.3% and plastics by 30%.
Skyrocketing materials costs and shortages will naturally hamstrung projects, and in some cases alternatives may be considered more viable. For example, increasingly American homeowners are turning to composite decking materials as lumber becomes so inaccessible.
To combat these industry-wide labor shortage challenges and soaring materials costs, process changes show promise.
In New York, a company called SQ4D has recently built the first 3D-printed homes in America. They report considerable cost and labor savings; for example, a 1,900-sq-ft 3D-printed home costing $9,000 to build (as compared to $100k for traditional construction) and taking 48 hours to complete (as compared to traditional construction taking 8 weeks on average). “With 3D printing, you not only have a continuous thermal envelope, high thermal mass, and near zero-waste,” Icon co-founder Jason Ballard notes, “but you also have speed, a much broader design palette, next-level resiliency, and the possibility of a quantum leap in affordability. This isn’t 10% better, it’s 10 times better.” Printing 3D construction can also help solve some of the industry’s most enduring problems, including narrowing talent pools.
In Mexico, a San Francisco-based nonprofit called New Story has built full communities of 3D-printed buildings in areas of extreme poverty in partnership with social housing production company Échale and Austin, Texas-based construction technology company Icon. In Austin, Icon has unveiled their first 3D-printed homes as a proof-of-concept.
Meanwhile, the market for prefab construction surges, expected to reach $153.7 billion by 2026, according to Yahoo Finance. Factors which drive adoption include fast-paced urbanization; rising real estate investments; rising customer attention to C02 emissions, green construction, and lowering waste; a desire to decrease time-to-completion, while maintaining more quality control, consistent with lean construction principles; cost savings, and so forth.
According to a 2019 World Green Building Council report, buildings account for 39% of all carbon emissions in the world. This consists of of 28% representing“operational emissions (from energy used to heat, cool and light buildings),” and 11% representing upfront carbon “associated with materials and construction processes throughout the whole building cycle.”
“[W]e have an opportunity to think about different materials, different kinds of concrete, different methodologies that make the process safer, smarter and obviously, from a carbon perspective, more efficient,” says co-founder and managing director of Taronga Ventures Avi Naidu in an interview with CNBC.
Sustainable construction methods and materials represent real opportunity, and the first step is building awareness. As Naidu notes, “There is a misconception in markets and particularly from landlords [that] it will cost more.” But in fact green buildings can bring with their initial investment considerable savings in energy, water, truly long-lasting economic advantages with justifiable higher rents (while drawing 4% more tenants than traditional buildings), on top of the positive environmental impacts.
Construction technology inventor funding has skyrocketed to $2.1 billion, reported in Construction Dive.
Emerging contech trends include: