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March 08, 2022

Construction Industry looking to greener future

By Suzanne Beckham Squyres

Few industries went untouched by the pandemic, and the construction field was no exception. As companies asked employees to work from home, many workers decided they needed homes with dedicated office spaces, more room and larger backyards. Buyers overwhelmed the real estate market in pursuit of larger abodes and bidding wars ensued as builders faced shortages of workers and materials.

These shortages have taken a toll on the industry, which was at a 10-year high of $856 billion in 2019 but hit a 9% decline in 2020. The forecast is looking up, however. According to research from Dodge Data & Analytics LLC, construction starts are expected to rise 4% by 2022 — moving from $778 billion to $810 billion — before climbing another 8% by 2023 to $877 billion.

In the meantime, a number of issues will increasingly impact the industry.

Environmental and Efficiency Issues

The Associated General Contractors of America Inc. has launched an initiative that encourages the construction of environmentally friendly buildings. The group has called for increasing the fuel efficiency of construction equipment, reducing the amount of time equipment idles and using solar-powered jobsite trailers and lighting.

"You can’t wish for a greener future; you have to build it,” said Les Snyder, chair of AGC’s climate change task force.

He predicts that buildings will become increasingly multifunctional, integrating spaces that can be easily transformed into offices, classrooms, gyms, playrooms and "Zoom rooms” for remote meetings.

Other trends will emerge:

Reuse of existing structures. While many people and organizations have adopted a reuse-and-recycle philosophy when it comes to garbage, no such credo seems to apply to buildings and other large structures. "We quickly demolish buildings in the name of new, ‘green’ structures, rather than looking for the possibilities of how we can work with what exists. To me there is an inherent conflict in there, and I think we can do better,” said Kathryn Rogers Merlino, associate professor of architecture at the University of Washington. Tearing down buildings and "throwing away the energy and materials embodied in them” is contrary to the values of sustainable builders and environmental stewards of our community, she added.
Intelligence-led supply-chain management. Most construction companies have generally relied on the next link in the process to manage procurement matters, but the interdependence from top-to-bottom supply chain became obvious during the pandemic. Moving to intelligence-led supply-chain management that embraces direct relationships and collaboration with subcontractors will improve efficiency and transparency, reducing waste up and down the supply chain.
Off-site prefabrication has been increasingly used for several reasons. It offers greater quality control and efficiency and — thanks to the pandemic that prevented contractors from fully staffing construction projects — is a cost-effective method of making up for lost time and staffing.

Outlook by Sector

Residential construction is not the only field within the industry expecting major changes.
Thanks to the rise in warehousing needs, commercial construction is predicted to grow by 16% by the end of 2022 after dropping 24% in late 2020 and 2021.
Office starts fell by 22% in 2020 but are predicted to rebound by the end of 2021 and rise 10% in 2022.
Institutional building — recreation, transportation, dormitories, hospitals, religious — fell in 2020, but is expected to rise 8% by end of 2022.
Manufacturing will remain flat for the rest of 2021 and rise 8% next year.
Highway and bridge building fell 12% in 2020, but investment in public works is expected to raise spending in this sector by 6% in 2022. Many construction projects will go forward based on passage of the $555 billion Bipartisan Infrastructure Bill. Roughly $290 billion will fund transportation-related projects.