It’s looking like the commercial construction industry ended 2013 on a high note. According to the U.S. Commerce Department the value of construction put in place for November 2013 was at an annual rate of $934.4 billion which is a 5.9% increase from November 2012 and a 1% increase from the previous month. This is the highest it has been since March 2009 and reflects the eighth straight month of increases. The employment numbers for November 2013 from the Bureau of Labor Statistics were also good with 17,000 construction jobs gained for the month and unemployment in the industry dropping down to 8.6% from 9% in October. That brings the total construction employment 5.85 million and marks the highest number of employees in the industry since August 2009. Numbers for December on construction spending and employment will both be available at the end of the week.
As we bid adieu to 2013 and say hello to 2014 I thought we’d break out the old crystal ball to see what trends will shape the commercial construction industry in this New Year. These predictions are based on what I’ve seen and read this year and there’s nothing too crazy or out there on the list. For example, I don’t think that robot construction workers are going to replace humans or that 3D printed buildings are going to dominate the industry in 2014. So without any further delay here’s the list in no particular order.
1. Green & Sustainable Construction
We’ve discussed in the past on this blog how green construction is no longer some fad being pursued by a handful of architects, contractors and owners. Green and sustainable construction has grown exponentially over the past couple of years and will continue to do so in 2014. Everything from the construction of NFL stadiums to retail stores are going green. I would hazard a guess that a majority of all construction projects will incorporate some aspect of green construction whether it’s using sustainable building materials, incorporating renewable energy or implementing water or energy efficiency solution. Not only will there be an increase in green construction for new buildings but there will also be an increase in greening renovations in existing buildings.
Other things to look forward to on the green construction front is the introduction of more green building products coming to the market with an emphasis on being sustainable, healthy and made from recycled materials as well as a battle for supremacy in the green building rating systems between LEED and Green Globes. The General Services Administration recently approved Green Globes as an alternative rating system to LEED and the Green Building Initiative, which runs Green Globes, recently named Jerry Yudelson as their new president. LEED certification has been all but banned from use in public state construction projects in places like Alabama, Georgia, Maine and Mississippi due to lobbying by the timber, plastics and chemicals industries because of LEED standards that place an emphasis on the component that go into building materials and how they are sourced. (Green Globes is much more lax in this department.) 2014 will definitely be the year we see the battle for top green building rating system heat up.
2. Modular & Prefabricated Construction
With projects like the Broadway Stack being completed last year and the Atlantic Yards B2 Tower starting to take shape modular construction is really going to take off in 2014. Already fairly commonplace in the United Kingdom and throughout Europe, modular construction has many benefits that are enticing to owners and developers. Construction costs and time of project delivery can be greatly decreased using modular construction. Modular units are constructed in a warehouse or factory in an assembly-line fashion similar to the auto industry and all building components can be integrated into the construction. They are then transported to the construction site and hoisted into place using cranes and the units are joined together. Constructing the modular units in a controlled environment eliminates delays caused by weather and also provide a safer work environment since it eliminates having employees working at height. Modular construction also has the added benefit of providing stronger and more durable structures since they have to be built to endure transportation to the site and being lifted into place. Modular construction can be applied to a range of building types from hotels and high-rise apartments to hospitals and office buildings.
3. Increased Technology Usage
Technology is going impact on the construction industry in a multitude of ways in 2014. Building Information Modeling (BIM) is going to have greater implementation not only from design firms but will also be utilized by more contractors during construction and by owners using the BIM for management of completed buildings. Mobile technology will have a greater presence on the jobsite. Expect to see a lot more tablets, smartphones and laptops being used on the construction site to better manage projects, increase productivity and keeping workers safe with mobile applications and software as a service (SaaS) using cloud technology. Thanks to the “internet of things” expect to see more in the way of building system integration. The implementation of building automation solutions that allow all building components to communicate with each other to provide better energy efficiencies and reduce waste will increase. Not only will these systems be able to gather and assimilate data but they will be accessible to monitor and control remotely from anywhere in the world.
4. Renewable Energy
Net zero energy buildings are going to be the next big thing in green and sustainable construction so renewable energy is going to be a major player this year. Solar energy will lead the charge but also look out for geothermal and wind energy to be more prevalent as well. Advances in renewable energy technology continue and allows for more cost-effective solutions to hit the market. The solar market is worth billions annually and that number will continue to increase year over year especially with costs continuing to fall. The Solar Energy Industries Association claims that solar panel costs have dropped 60% from the beginning of 2011 to about the middle of last year. Solar technology is being incorporated into all kinds of building materials from windows to shingles and a host of other building-integrated photovoltaics.
5. Continued Growth
The commercial construction industry will continue to recover as the country’s economy continues its recovery. Construction spending should continue to increase throughout the year with more construction starts occurring. Not all areas of the country will see the same levels of growth in the construction industry. Much like last year some areas will see gradual improvements while other areas of the country will see more rapid growth. The industry should continue to see the addition of jobs throughout the year with the unemployment rate continuing to decrease. This is not to say that there won’t be a hiccup or two like in 2013 where there were a couple of months with job losses. The one roadblock to the continued growth in the construction industry is the skilled worker shortage the industry is facing. When the recession hit a lot of workers left construction and found employment in other industries. As the construction industry continues to recover a solution to the skilled worker shortage will have to be found.
There are lots of good things to look forward to this year in commercial construction and I hope everyone has a successful and prosperous 2014.