Emerging Construction Industry Trends and Challenges

The booming construction industry is seeing many trends taking shape in the global economy. Construction industry growth projections are looking as promising as ever — as the market is expected to reach USD 16.6 Trillion by 2025, growing at a CAGR of 7%.

Numerous construction sectors are expected to see rapid growth over the next five years due to emerging trends that are shaping a very promising future. Technology in construction is improving at a rapid rate, leading to innovations to enhance efficiency. For example, green technology in construction which aims to provide better effiency for HVAC products and water solutions, has been growing at a CAGR of 9% over the last five years and is projected to grow at an ever larger rate tover the next 5+ years, through 2027.

Other promising construction sectors witnessing stellar growth due to the demand for advanced digital solutions include the market for construction materials. This market which is expected to grow more than USD 1 billion between 2021-2025, is being driven by the rising development of smart cities. A similar trend can be seen with airports, as the demand for connected technologies in travel hubs has seen the global smart airport construction market grow at a CAGR of 10% over the last five years.

However, despite the massive potential for the future growth of numerous construction sectors, there are still various challenges ahead for many construction industry groups. One example affecting many construction sectors is a shortage of labor across the world, as it is a major concern for many building developers.

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In the following article, we will elaborate on some of the major trends and challenges expected to impact various sectors of the construction industry.

What is the construction industry?

Before we dive into the future trends and challenges of construction, it is important to define the industry. BizVibe’s platform contains more than 80,000 construction companies which are segmented into 10 categories. Each of the 10 categories belongs to one of five major construction sectors being residential building construction, non-residential building construction, utility system construction, land subdivision, and heavy/civil engineering construction.

Each category is being transformed by its own set of trends and challenges that will greatly influence the direction of construction companies in the future. Below we will discuss the trends and challenges of categories across the major construction sectors.

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Residential Building Construction Industry

Emerging Trend – Growing Use of Eco-friendly and Green Building Materials and Techniques

Residential developers are focusing on sustainable buildings under the influence of regulatory pressure as well customer demand. Using green building materials for construction and avoiding materials containing volatile organic compounds is becoming commonplace to minimize the environmental footprint of their residential building projects. The adoption of sustainable building technologies and certification is also increasing.

Major Challenge – Shortage of Skilled Operators

The shortage of labor across the world is a major concern for building developers. The unavailability of skilled labor is hampering construction projects. The main reasons for this challenge are the near-retirement age of the experienced construction workforce, lack of training programs that impart construction skills, and the unattractiveness of the industry for skilled professionals. Coronavirus pandemic has complicated the issue further with lockdowns and fear among workers.

Foundation, Structure, and Building Exterior Contractors Industry

Emerging Trend – Green Construction

Construction projects are focusing on sustainable infrastructure under the influence of regulatory pressure as well customer demand. Using green construction materials and avoiding materials containing volatile organic compounds is becoming commonplace to minimize the environmental footprint of infrastructure projects. The adoption of sustainable building technologies and certification is also increasing.

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Major Challenge – Prices and Tariffs of Building Materials

Uncertainty of raw material prices coupled with fluctuations and tariffs is creating operational difficulties for construction companies. Costs have been increasing for several types of building materials. Trade wars and protectionism are raising tariffs or creating uncertainty about the tariff regime for materials such as steel, aluminum, and timber. This is leading to a rise in the overall cost of non-residential construction projects.

Building Equipment Contractors Industry

Emerging Trend – Focus on Smart Buildings

Building automation is finding significant traction from builders and customers. HVAC, plumbing, electricals, and other components of a building are increasingly being automated and running through sensors or similar tech. Contractors are looking at building these tech capabilities to capitalize on the increasing demand for smart building components.

Major Challenge – Coronavirus-led Near-Term Distress

The overall property development market has taken a beating due to the coronavirus outbreak. Several projects are expected to face delays due to economic uncertainty, unpredictable demand, and liquidity. As a result, all services related to the real estate market are expected to face challenges in the short to medium term.

Construction Industry Companies on BizVibe

BizVibe’s platform contains more than 80,000 construction company profiles which are free to view. Each profile consists of in-depth company insights, comprising 50+ data points, including full industry trend and challenge analysis for 10 construction categories.

BizVibe company insights help provide answers to questions such as:

✓ How will industry challenges impact specific geographic regions?

✓ Which regions will emerging trends be the most prominent?

✓ What are a company’s major product and service offerings?

✓ Who are the company’s key executives and what are their roles?

✓ How is a company positioned financially?

✓ Who are the company’s major competitors?

✓ What is the risk level of doing business with a given company?

✓ What is the latest company news?

Additionally, BizVibe enables users to connect with construction companies and includes a feature that allows companies to send and respond to RFI/RFPs directly on the platform. There are construction profiles of companies from over 200 countries on BizVibe. Accessing these profiles to discover, analyze, and connect with construction companies is free to use.

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