One word you’ll hear a lot in the construction industry this year is “slowdown.” While many contractors are optimistic about most markets, such as water infrastructure, transit and surface transportation, they’re also concerned about rising interest rates weakening demand for multifamily housing, warehouses, retail buildings, offices and lodging, according to the Associated General Contractors of America. Additionally, there is added angst over domestic procurement requirements and how slowly money seems to be flowing from the Infrastructure Investment and Jobs Act. Labor also ranks as a high concern for contractors, with 69% of contractors expecting to increase headcount this year, according to a survey by AGC and Sage. However, according to two leading construction technologists, the anticipated economic climate and last year’s momentum in digital adoption also present opportunities for the industry to innovate. Here are five construction trends that will allow the industry to adapt and innovate in 2024.
According to a recent report by PlanHub, preconstruction is becoming a higher investment priority for contractors due to the increasing complexity of construction projects and an understanding that an organized preconstruction platform can help decrease rework, grow profitability and increase productivity. A separate 2022 survey from FMI and Procore supports this observation, with preconstruction ranking as contractors’ second-highest strategic priority.
PlanHub notes, however, that despite its growing importance in the industry, “preconstruction appears to be even more technologically underserved compared to other phases of the construction process.” Ro Bhatia, CEO of PlanHub, says some companies are still using sticky notes for vendor management. He adds that contractors are becoming frustrated with “one point solutions” and have difficulty finding the right information about a specific project because details are scattered across different Google Drives or different Dropboxes. The industry’s expected economic slowdown underscores the need for contractors to ensure projects remaining in their pipelines are running more efficiently.
“People are going to realize their backlogs are shrinking, and the labor shortage is still a big problem,” Bhatia says. “So what do we need to do? How do we prepare ourselves for what’s coming for us in the new world? I think that’s what’s going to push people to start adopting preconstruction technology.”
Bhatia believes subcontractors are missing out on an opportunity to combat their labor shortages by expanding their networks. He notes that PlanHub’s general contractor clients have indicated a strong willingness to initiate new working relationships with subcontractors.
“Previously, the thought process was that if I’m a general contractor and if I live in Palo Alto, Calif., and I know local subs around, I don’t need to interact with more subs because I’ve got my own crew and my go-to subs,” Bhatia says. “But things have changed.”
However, 55% of subcontractors surveyed by PlanHub said they rarely bid on projects from general contractors with whom they have not previously collaborated. Bhatia believes subcontractors will buck this trend in 2024 as more general contractors seek additional competitive bids for specialty work to keep costs down.
Togal.AI, a spinoff company from Florida-based contractor Coastal Construction, made 2023 a big year for AI in construction estimating. The company also made waves when it announced its integration with ChatGPT, allowing users to essentially talk to their construction plans and documents, eliminating hours, or sometimes days, of manual work.
It was also a big year for automating the building code research process, with UpCodes introducing Copilot – an AI-powered code research assistant that claims to offer tailored responses to code queries.
Kris Lengieza, vice president of global partnerships and alliances at Procore Technologies, thinks the contech industry will build on these achievements in 2024 with solutions that allow people on job sites to interact with construction technology in a manner akin to “texting their buddy” or “chatting with somebody on WhatsApp.”
“That will help us collect a lot more data,” Lengieza says. “It’ll also give us a lot more contextual data around the questions that are being asked, which will allow us to give even better responses back to those users.”
He adds that AI models have been getting better at consuming multimodal information, and interactions with that information are becoming “more tightly embedded inside of platforms.”
Democratizing contech through education
One of the biggest questions surrounding AI in construction is how vendors can help democratize it to make it useful and usable in all corners of the industry. Lengieza sees this happening broadly across the entire construction technology sector. He says one way Procore is doing that is through education for industry collaborators and non-paying users through its procore.org platform.
“Whether you are the buyer of construction technology or you are a collaborator of construction technology, being educated on how to use it efficiently and how it can add value to your day-to-day workflow will be critical for us to democratize it,” Lengieza says. “ If people are coming in and they’re intimidated, and they don’t know how to use it, it’s just costing them time, that’s costing them money for labor they don’t have, and that is going to be a challenge for them, and they’re not going to want to use it.”
A better grasp of carbon tracking
The world of environmental product declaration and carbon tracking can be mystifying for contractors, especially when the industry lacks centralized platforms for measurement. But many of the tools and data sets needed to make construction a less carbon-intensive industry already exist, Lengieza says. For example, building information modeling software can help contractors select construction materials with a lower environmental footprint. The growth of integrated project delivery models like design-build presents opportunities to get a better handle on low-carbon materials during the design phase of a project.
While Lengieza doesn’t feel there will be “massive” improvements in carbon tracking, there will be some.
“I think the biggest trend that we will probably see in 2024 is people will actually start to figure out how to track these things and measure them a bit more clearly,” he says. “As people better understand the things to look at, and the data that we can measure, I think we’ll see people put systems in place.”
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