“To boldly go where no one has gone before.” That famous line from Star Trek about venturing into new territory fits the rapid changes happening in the construction industry, particularly construction trends related to the overall landscape and construction management software.

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While the construction management sector witnessed a sunny start last year, current market dynamics suggest that the industry will see differentiated growth thanks to global supply chain disruptions and inflation.

Key Takeaways

• The construction industry continues to grapple with a shortage of skilled and quality labor.
• The Russia-Ukraine war and subsequent economic sanctions on multiple countries led to supply chain disruptions, a rise in commodity prices and global inflation driving up construction project input costs by 40.5%.
• The construction industry’s future will be green with efficient and sustainable building materials available at affordable prices.
• Smart cities will be high-investment projects with improvements in energy consumption, public safety, security and mobility.
• Modular and prefabricated buildings will remain in vogue due to lower on-site costs.
• The sector will see a push toward leveraging emerging technologies to reduce process inefficiencies.
• With consumers getting environmentally conscious, more affordable sustainable buildings are expected to hit the market.

Construction Management Trends: What Does the Future Hold?

Workforce Shortage

The construction industry faces skilled worker shortages due to a tight labor market. Perpetual labor shortages and turnover can hamper upcoming infrastructure and building projects. The workforce crunch is a result of dwindling interest, an aging population and talent demands in competing sectors like technology and trucks.

Surveys suggest that many workers, especially younger ones, want positions that are less physically intensive. As per Associated Builders and Contractors (ABC), there’s been an 8% decline in construction workers between 25 and 54 years old in the last decade.

Meanwhile, the Bureau of Labor and Statistics projects that the construction industry will employ 4% more workers in the 2021-2031 period.

About 167,800 openings for construction laborers and helpers are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.”

To retain talent, organizations should focus on offering purpose-driven work and customized career paths. As per a Deloitte report, encouraging workers to use cutting-edge tools, technology adoption, and innovation can help retain staff and recruit people with new talents, like data scientists.

ABC warns that the sector will continue to face a labor shortage. It emphasizes that companies should focus on vigorous training and retention programs to attract approximately 650,000 additional workers, apart from the usual hiring, to meet growing demand.

The industry trade association highlights this scarcity as a pressing issue. According to ABC Chief Economist Anirban Basu:

Since 2011, the number of entry-level construction laborers has increased 72.8%, while the number of total construction workers is up just 24.7%. More than 40% of construction workforce growth over the past decade is comprised of low-skilled construction laborers, who represent just 19% of the workforce.”

Amid shifting talent models, the Deloitte report notes that companies will prioritize addressing the tough labor market and exiting workforce this year. Targeting diverse talent groups can bring additional talent to the sector. It adds:

In 2021, only 11% of all construction workers were women, 6.3% were Black, and 2.1% were Asian. Diversity, Equity and Inclusion (DEI) hiring can help raise productivity, enhance organizational management, improve financial performance and increase innovation.”

As contractors adopt technology to automate processes, demand for skilled labor will continue to rise. Companies will continue to require quality labor to keep pace with technology while interpreting the data it produces.

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High Material Costs

Another trend that the construction landscape is grappling with is the rapid rise in construction material prices. Geopolitical unpredictability, transportation bottlenecks and COVID-19 exposed cracks in construction supply chains.

These factors increased material costs, constrained outputs and restricted freight movements. Rising expenses and shifting prices caused a shortage of resources, cement, paints, wood, plastics and electrical equipment.

Price volatility hampered projects, making planning and budgeting difficult. The cost of iron, steel, lumber and other essential components increased due to inflation. Input price fluctuations escalated overall building costs.

The Deloitte Report notes:

Prices of construction inputs increased 40.5% between February 2020 and August 2022. Persistent inflation could hurt contractors who have not bought large quantities of their materials at normalized prices or included appropriate price escalation clauses in their contracts.”

Though material costs are getting back to normal, construction material budget uncertainties are likely to persist. Unforeseen delays could result in higher final costs and longer lead times.

According to the Construction Inflation Alert report:

The construction industry is in the midst of a period of exceptionally steep and fast-rising costs for various materials, compounded by major supply-chain disruptions and a shortage of available workers—a combination that threatens the financial health of many contractors.”

The report advises project owners to adopt flexibility in cost-sharing and building designs for upcoming projects.

Contractors need, more than ever, to closely monitor costs and delivery schedules for materials and to communicate information with owners, both before submitting bids and throughout the construction process.”

New Construction Materials

The future of construction technology looks promising with the use of sophisticated and long-lasting building materials. With increased affordability, these alternate materials are viable and sustainable options for construction projects.

Graphene is one such example. This thin, transparent substance formed of carbon is stronger than steel. It can coat buildings and protect them from weather damage and other wear and strain. Its excellent thermal conductivity can increase energy efficiency.

Calcium silicate board is another innovative material. It’s formed from organic components like sand, clay, and lime and is pest, fire and moisture-resistant. It’s also non-toxic and sustainable.

There’s also a growing shift toward recycling construction and demolition (C&D) waste into aggregate and engineered wood. These initiatives reduce the overall amount of construction materials winding up in landfills while adhering to sustainable norms.

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Smart Cities

Smart and sustainable cities remain in vogue this year with tech giants like Microsoft, IBM and Cisco investing heavily. The global smart city market touched $1,226.9 billion in 2022 and is likely to register a CAGR of 25.8% between 2023-2030.

Several factors will drive the smart city market’s rapid growth. These include the need for efficient utilization and management of resources, growing urbanization, demand for efficient and fast transportation facilities, public safety concerns, and rising demand for a healthy environment and effective energy utilization.

Many cities are embracing sustainability and technological innovation to keep pace with the changing times. London emerged as the smartest city, followed by New York and Paris, based on factors like sustainability, livability and fairness.

According to TWI Global, a smart city’s value lies in its technology usage rather than availability.

The main goal of a smart city is to optimize city functions and promote economic growth while also improving the quality of life for citizens by using smart technologies and data analysis.”

The United Nations predicts that urban centers will become home to 68% of the world’s population by 2050, a figure that is 55% currently. In simple terms, urbanization will add another 2.5 billion people to cities worldwide over the next three decades, rapidly increasing energy usage and emission levels.

This will continue to put tremendous strain on cities’ social, economic, and environmental sustainability, struggling to keep pace with expeditious growth. Smart city initiatives provide a valuable framework for a sustainable future while optimizing energy consumption.

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Modular Building and 3D Printing

Modular or prefabricated construction is the process of building 60-90% of repeatable sections or modules offsite and delivering them to the intended area. These prefabricated sections are assembled on-site using inter-module connections to form a building. This method took off with large projects proving it can succeed.

This convenience makes it no surprise that the modular construction market was valued at $91 billion last year and is likely to grow at a CAGR of 5.7% to touch $120.4 by 2027.

Frederic Guitton, Chief Strategy Officer of RedTeam Software, says that a digitized industry is well on its way.

Managing and capturing critical information from the jobsite is a daunting task that digitization can help with. Technical progress is rapidly happening in things like modular construction and the continued expansion of prefab models.”

Builders and real estate developers have confidence that modular buildings are here to stay. Prefabricated contractors are increasingly targeting affordable housing segments in the U.S. and across the globe to reduce costs and boost delivery speed.

A related trend, 3D printing gained prominence due to faster turnaround time, waste reduction and mass printing of custom designs. It’s likely to witness mass adoption with more community and low-income housing projects.

This technology creates entire building structures with large printing setups capable of pulling from blueprints. These homes can be small, tiny-house-like cottages to larger, full-blown houses.

Tyler Riddell, Vice President of Marketing at eSUB Construction Software says:

Most [trends] are a carryover from previous years. There’s not going to be some big lightbulb that’s going to go off. It’s just greater adoption of technology.”

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Digitization and Tech Adoption

While the sector has been sluggish with digital adoption, the future of construction trends points to leveraging emerging technologies. With heightened competition, global supply chain disruptions, skyrocketing material costs and labor shortages, businesses had to leverage online technologies to reduce expenses and boost profits.

Digital technologies tackle process inefficiencies and increase visibility to turnaround projects faster. For builders, the technology innovations that boost overall efficiency will be the key differentiators this year.

According to the Deloitte report referenced earlier:

Construction companies will likely adopt digital technologies through two IIJA initiatives: advanced digital construction management systems (ADCMS) and the Technology and Innovation Deployment Program (TIDP) related to the transportation sector managed by the Federal Highway Administration. These initiatives will provide a total of $550 million to promote the use of digital technologies on government-funded projects.

TIDP comprises research and development (R&D) and other efforts related to highways and transportation, while ADCMS is part of the TIDP and was created to advance technologies such as BIM, 2D and 3D modeling and others.”

As more companies embrace technology, the holdouts will see their competitors using tech-enabled tools and realize they need to join the trend or get left behind.

Spencer Padgett, Director of Customer Success and Builder-in-Residence for CoConstruct Software, said that the industry is climbing the tech adoption bell curve, and it’s a freight train that keeps doubling down.

I talk to builders every week who construct magnificent homes, have great companies, and either have competitors who are using technology and they see it, or clients who are asking them why they aren’t using it or what they do use. It’s absolutely what’s happening.”

The following technological adoptions will gain prominence this year:

Digital Twins

Digital twins create real-time virtual construction models that support thoughtful decision-making. They simulate various scenarios for decision-makers to determine efficient ways to construct buildings while avoiding costly mistakes.

Contractors can also use this technology for maintenance and repairs post-project completion. They also improve simulation accuracies over time, boosting process efficiency and saving money.

Augmented Reality (AR)

Augmented reality in construction provides a data overlay that enhances perception of the real world. Using an AR-equipped smart device, construction team members can look at a job site with additional information on top of what they normally see. For example, workers can point their smart device at a wall to see that building’s blueprints as part of their physical surroundings.

For clients, steady growth in AR usage translates into efficient project staging and tangible preconstruction for tenants and buyers. For builders, AR helps with 3D visualizations of upcoming projects, affordable architectural simulations, automated building measurements, and safety and hazard training simulations.

Building Information Modeling (BIM)

Building information modeling (BIM) is a collaborative process that helps contractors, developers and other construction professionals plan, design, construct and visualize real-time changes in a single 3D model. It can also span building management and operations using owners’ data for informed decision-making.

It generates computer renderings of utilities and buildings to simplify data sharing for superior prefabrication of parts while boosting on-time project completion. Autodesk describes BIM as the holistic process of creating and managing information for a built asset. It adds:

Based on an intelligent model and enabled by a cloud platform, BIM integrates structured, multi-disciplinary data to produce a digital representation of an asset across its lifecycle, from planning and design to construction and operations.”

Construction Management Software

Comprehensive construction management software helps home builders, contractors and architects manage ongoing projects. Construction firms realize that these tools are vital to remain competitive and build valuable businesses while acing operational efficiency.

The best web-based construction management programs offer end-to-end solutions like data compilation, RFIs, seamless file sharing, document storage, budgeting, inventory monitoring, and HR and payroll capabilities. These programs track fragmented workflows, store documents, automate estimates, generate reports, prevent cost overruns and boost profits.

To Dustin Anderson, the industry is coming full circle:

I think where we’re going today is back to [a] best-of-breed environment. With cloud tools and the ease of integration with open APIs, what we’re seeing is that customers are picking the right tool for the right problem.”

This is thanks to technology’s quick evolution, ushering in a world of open tools.

Anderson goes on to say:

There’s development and little pieces of functionality that are very focused and very deep in what they do, and they’re great at it. Well, it’s hard for one vendor to go that deep and with that much expertise across all these functionality areas. So the concept of customer choice and best-of-breed solutions is on its way back.”

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AI and IoT

Another trend gaining prominence in commercial construction is the usage of artificial intelligence (AI) and the Internet of Things (IoT). Contractors are turning toward a combination of these tools to reduce losses and boost process efficiency.

These technologies standardize estimation procedures while allowing businesses to leverage lead practices to boost productivity and accuracy. Companies can also connect with cloud technology to improve stakeholder and internal collaboration.

IoT sensors and geofencing help site leaders manage the use of approved tools and machines at appropriate times to enhance worker safety. This approach thwarts theft attempts by issuing timely alerts.

AI and robotics applications assist in risk reduction while carrying out primary tasks like bricklaying. They speed up work and minimize injury risks.

Sustainable Building

With an increased consumer focus on sustainability and global attention on climate change, the construction sector can expect incentives for adopting sustainability into building processes, designs and projects.

The Deloitte report notes that some of the top priorities of construction companies to go green include encouraging the sustainable use of resources and new materials, promoting sustainable design, development and construction practices, and reducing energy consumption.

The industry is steadily shifting to green construction, which reduces a structure’s carbon footprint while optimizing resource usage. Apart from economic and social advantages, green buildings also have a positive physiological and psychological impact on residents through optimal use of natural resources.

Modern practices like greenscaping outfit rooftops with plant covers, and small parks are popular globally in urban centers. Green initiatives help construction firms reimagine some of their more extensive projects, like the landscraper.

However, the construction sector is highly fragmented, making the adoption of sustainable practices a challenge. Lack of integrated visibility in construction practices and contractors worsens the problem.

Digitization plays a key role in structural energy efficiency and demand flexibility. Smart infrastructure and buildings that converge IoT sensors increase data availability while tracking energy efficiency and tracking efficient practices.

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Next Steps

Technology will be the cornerstone for most construction businesses this year and beyond. In the backdrop of geopolitical troubles, inflation and global supply chain disruptions, the skilled labor crunch and rising material costs will continue.

Government regulation can get stringent with increased safety concerns and climate change issues. Construction businesses can reduce risks and achieve financial gains by streamlining processes and investing in new technologies and projects.

If you’re looking to take advantage of the benefits of construction management software, you can start on the right foot by grabbing our free requirements template.

What predictions do you have for future construction trends this year and beyond? Share your thoughts in the comments!

Contributing Thought Leaders