US Construction Market Report 2Q 2023
Trends and opportunities
As the construction industry continues to battle many headwinds — including labor challenges, cost escalation, viability pressures and wider economic factors — it is adapting to improve efficiency and project outcomes. It is also responding to meet changing societal needs and challenges such as the climate emergency.
Some examples of trends and opportunities for the US construction industry include:
Investment in digital technologies
Adopting digital technologies allows companies to make better use of resources, boost profits, increase the speed of construction and enhance the quality of project execution. Dustin Stephens, vice president of Construction and Real Estate, Sage, said, “Technology plays a critical role in delivering successful and profitable projects. Utilizing the right technologies can help lessen the impact of current challenges and put construction firms in the best position to thrive.”
Data analytics can help to improve decision-making. Responding to real-time project data, as well as that from historical projects, gives opportunities to understand risks better and improve performance.
Generative design augments the designer’s ability, making design time more efficient and focussed, as well as highlighting mistakes or omissions.
Robotics can alleviate onsite challenges by reducing labor requirements and improving productivity. They can also operate in extreme environments, helping to improve health and safety.
There is increasing adoption of other technologies such as 3D printing, tech-enabled safety equipment, collision avoidance systems and drones.
AI will further enhance industry tools and ways of working. PBC Today emphasizes that models such as ChatGPT and GPT-4 could benefit construction industry stakeholders through automation support, task planning and management, knowledge sharing, error detection and security and privacy.
Environmental, social and governance and sustainability
ESG is an urgent priority for many companies as customers are ever-more sustainability-conscious, expecting developers to lower the carbon emissions associated with the built environment.
The US General Services Administration (GSA) recently launched a pilot of new requirements for procuring substantially lower embodied carbon construction materials in GSA projects funded by the IRA.
The IRA provides $3.375 billion for GSA to invest in federal buildings to reduce carbon emissions and catalyze innovation, with $2.15 billion to procure low embodied carbon materials for construction and renovation projects. The significant investment will use the federal government’s buying power to help stimulate the market for lower embodied carbon construction materials.
Research from McKinsey & Company stresses the importance of using circular business building and circular technologies, indicating that they could help to decarbonize roughly 80% of total cement and concrete emissions by 2050. It anticipates that the demand for cement in future decades will likely remain consistent, meaning that we need to find alternatives to cement production rather than traditional approaches to decrease costs and carbon dioxide emissions.
Smart cities
Grand View Research estimates the global smart cities market will reach $6,965.02 billion by 2030 thanks to favourable government initiatives and emerging technologies such as AI and the Internet of Things (IoT).
The increasing adoption of electric vehicles has created demand for charging infrastructure. The smart cities market is also witnessing high levels of investment in smart security, smart metering for utilities, integrated traffic management systems and smart mobility.
Some innovative cities use IoT platforms to monitor infrastructure, traffic flows, parking, water management and air quality. The data collected enables longer-term decision-making for sustainability and investment.
The sector is seeing the formation of strategic partnerships with technology providers. For instance, electric utility company E.ON SE partnered with telecom company Vodafone Group Plc to develop smart water, gas and electricity meters.
Modular construction growth
Expectations are that the global modular construction market will be worth $97.51 billion in 2023, reaching $199.11 billion by 2033, according to Future Market Insights.
One of the key drivers of growth is increased demand for affordable housing and infrastructure solutions. Adopting modular construction on a project, where appropriate, helps realize quality and performance benefits. It can also help to reduce waste and make better use of resources. There are benefits of using modular construction for remote sites or those with access difficulties and where high labor costs or issues with skills availability arise.
Despite promising prospects, there are some challenges for the modular construction industry to overcome including the perception that it is not as durable or high-quality as traditional construction. In addition, to ensure viability, a committed and predictable pipeline is required due to the high level of fixed factory costs.
