Very few people could have guessed that the past few years would be so interesting. But, despite the tumult, supply shortages, unrest, and other challenges, construction is still one of the fastest-growing industries in North America. All across the U.S. and Canada, construction crews continued to build while other industries were at a standstill—albeit, not all at the same pace.
But what does the future hold for the construction industry? And what does it mean for the future of construction software? Let’s find out!
Where the Industry is Heading
As a whole, the construction industry is heading toward continued growth over the next few years. Government spending on infrastructure projects is helpful, but the majority of the growth will come from the effort of the residential industry. In fact, residential construction deserves most of the credit for the industry’s bounce back after the 2020 recession.
But how much will it grow moving forward?
With so many entities performing market research on the construction industry, the estimates regarding growth vary. However, most researchers believe that the industry will grow at a compound annual growth rate (CAGR) between 4.8 and 8.4 percent over the next few years. While that might seem to be a drop in growth rate from 2021’s numbers (roughly 12 percent), it’s still within a healthy range for most industries.
Trends to Watch
One of the best ways to understand the direction of the construction industry is to look at current trends. While they may be temporary, they can steer the direction of the ship.
Residential is paving the way. While the commercial and municipal construction sectors slowed (crawled, really), residential construction experienced a boon. Despite the rising costs of materials and lumber, new home construction and renovation made up the majority of the industry’s growth.
Some construction firms saw the writing on the wall and pivoted from commercial and residential outfits to residential-only. Many downsized their workforces but were able to keep the doors open by building new homes or remodeling existing homes for folks fleeing big cities.
Commercial and industrial projects are likely to continue crawling moving forward for the next year or so, leaving the emphasis on the residential sector. However, both of these industries are expected to bounce back shortly after.
Labor is still an issue. Finding skilled workers has always been a challenge for the construction industry, and it’s an issue that isn’t likely to go away any time soon. But, it’s not just the ironworkers, carpenters, and electricians that are hard to find. It’s also a lot of the clerical and office staff. In fact, the number encompassing all positions lost during the pandemic is just shy of one million jobs.
Many folks chose to stay home from work for a few years, while others transitioned into other industries that were more work-from-home friendly. Whatever the case may be, there just aren’t enough experienced, qualified workers to keep up with the industry’s demand.
Companies are doubling down on technology. Despite the industry’s resistance to technology and the changes it may bring forth, companies are investing heavily in connected construction. The hope is that by investing in technology, these companies will be in a better position to answer the call for smart cities, climate change programs, and Urban Air Mobility initiatives.
Along with positioning themselves to take advantage of big-spending bills and government programs, the companies within the industry can now realize improved efficiency, accuracy, reduced costs, and larger margins.
Supply chains are far from fixed. Supply chain issues plagued all industries in recent years, but they’ve really held the construction industry back. Between not being able to get certain materials or basic materials doubling (or tripling) in price, materials availability and affordability have been an issue.
This issue is likely to play out over the next few years before it comes back to the center. Some materials are still difficult to find, and then getting them to the job site can be even more of a challenge. Until other countries open completely and everyone heads back to work, this is an issue that won’t go away any time soon.
How The Construction Software Industry Will Respond
While there may be good things on the horizon for the construction industry as a whole, the construction software industry must adjust accordingly. In general, this means developing new technologies or adapting older tech to modern trends.
1. Adapting to Residential Contractors
Most construction software programs are designed for large contractors tackling commercial and industrial projects. However, with the current trend showing residential work to be the shining star of the construction industry, software companies will have to adapt.
Adapting to residential construction won’t be difficult for most software developers. However, a greater focus on making estimates easier to understand, making forms easier to customize, and simplified invoices will help those working in the residential industry.
2. Better User Experience
With such a shortage of skilled employees to choose from, growing construction companies will often rely on less-experienced personnel to see the job through. In fact, some employees may go right from the slab to the office, and they need to adapt quickly.
In this case, making construction software easier to use will help those lacking experience adapt to the new system. Also, these systems will help to reduce the number of mistakes or errors caused by inexperience—something the industry may come to rely on in the coming years.
3. Cloud-Based Access
With so many folks working from home these days, cloud-based storage systems and real-time reports will become critical. While the actual building happens on-site, plenty of the clerical and administrative roles can transition to a remote commute. And, companies will have to start offering these WFH positions if they want to attract the right people.
For these roles to work, however, they need reliable access to the company’s construction software program as well as the drawings and files that it may contain. Software companies will have to partner with strong cloud service providers to pull that off.
3. Improved Flexibility
As supply chains continue to work themselves out, modern construction software needs to be nimble and flexible. It should allow for easy changes it can also track through the system, adjusting the appropriate values automatically as it goes. There’s no way to predict how often this could happen during the lifetime of a job, and streamlined automation will help.
Construction software should allow for the easy production of change orders should a particular material become unavailable. These change orders should operate on customizable workflows so everyone who needs to see it and approve it can do so. With these features requiring minimal input from the contractor, there will be fewer errors and less downtime, helping to keep projects on track.
Growth on the Horizon
Between the construction industry and the software that supports it, the future looks like growth. While certain sectors might struggle to keep up, the overall industry is poised to grow over the next few years, and savvy construction software creators will adapt their programs to go along for the ride, including yours truly, Premier Construction Software! Amidst the market shifts, one thing Premier and the team behind the brand can do is adapt. We will ensure your business can benefit from a system like ours.
See how we can help you structure your business for success, schedule a demo today.
Tom Scalisi has over 15 years of experience working in the trades. Since moving to full-time freelance writing, he has developed a passion for helping construction companies grow. He enjoys teaching contractors how technology can streamline their businesses and educating them about their rights during payment disputes.