Key trends in the construction industry for 2022

2020 was quite the start to this decade. From the new normal COVID-19 brought to the materials shortages many contractors experienced, the 20s have brought a fair share of challenges. Looking forward, here are the key construction industry trends 2022 will bring.

Here we go! 

What construction industry trends should you watch out for?

1. The rise of smart, connected cities

The Journal of Urban Technology defines smart cities as “high-tech intensive” urban developments that connect people, data, and city elements to improve a city’s:

• Eco-friendliness.
• Economy.
• Quality of life.

As smart cities become more common, the nature of construction projects will, in turn, be more complex.

From pedestrian sensors to WiFi-enabled lighting, smart cities will require construction companies to increase their technical know-how.

How sustainability plays a role in the smart city

With two-thirds of the world’s population predicted to live in cities by 2050, the need for smart, sustainable cities is obvious.

A few ways that sustainability plays a factor in this construction industry trend is:

• An increased emphasis on public transportation. This includes using real-time data and sensors to monitor for accidents and higher passenger volumes to optimize bus and train schedules.
• “Smart roads” that reduce road vibrations and, in turn, fuel costs and emissions.
• Waste management. This includes using smart bins and data for more efficient garbage collection and less fossil fuel use.
• The internet of things (IoT). Connected sensors that measure air quality, traffic flow, noise levels, and energy use help make smart cities more efficient.

So in 2022, you will need to:

• Evaluate the skills and equipment smart city development requires.
• Plan for this shift in how cities are built.

How to overcome this key construction industry trend

The key to preparing for the rise of smart cities is education.

Early investment in skills training is a great idea for those looking to own this niche and will pay off in the long run as smart cities become the standard in urban development.

2. Increased pressure on the bottom line

Despite construction revenues increasing in previous years, net profits in the industry remain slim.

According to Deloitte, construction earnings before interest and tax (EBIT) account for 5.5% of a company’s sales — leaving little wiggle room when it comes to unplanned expenses.

“On average, construction earnings before interest and tax (EBIT) account for only 5.5% of revenue.”

— Deloitte, 2019

To make matters worse, the cost of building materials, such as concrete and brick, is set to rise.

With the price of goods increasing in 2022, construction companies need to look long and hard at areas that can be optimized to drive a better bottom line.

“Construction companies need to look long and hard for ways to drive a better bottom line.”

How to prepare for this key construction industry trend

Whether it’s negotiating prices with suppliers or automating sales workflows, construction companies need to prioritize efficiency and cost-saving opportunities to succeed.

To ensure profitability, you need to consider how fluctuating materials costs will affect your:

• Budgets.
• Estimates and quotes.
• Bids.

3. The development of new construction materials

To answer the need to maximize profits and sustainability, construction companies need to:

• Reduce building material costs.
• Source cost-effective, sustainable building materials.

As a result, the following building materials are currently trending in construction:

• Engineered Cementitious Composite (ECC) — aka bendable concrete. As the name suggests, ECC can be bent without breakage. ECC contains small, polymer-derived fibers that make it much stronger and crack-resistant than traditional concrete. The result is a material that uses less cement and has a smaller carbon footprint. ECC’s durability also means less time and money spent on repairing cracks and breakage.
• Engineered timber — this refers to timber products that are created by bonding several types of softwood. The result is a lumber material that is strong enough to be used as a replacement for steel and concrete. The benefits? Fewer emissions and less waste during the manufacturing of engineered timber than steel and concrete.
• Recycled materials — using recycled materials certainly isn’t new. But considering the issues discussed above facing construction companies, recycled materials are now being used to construct entire structures (small ones for now).
• 3D printed building materials — this includes concrete, walls, floors, and other essentials needed in construction. More on 3D printing and construction below.

Another strategy construction firms use to reduce material costs is modularization and prefabrication. By adding a module assembly yard to a construction site, materials can be fabricated and assembled on-site, reducing material and shipping costs. 

4. A declining workforce

As far as key trends in the construction industry go, a shortage of workers is nothing new.

While the demand for construction services has surged in recent years, the number of laborers has not.

Since 2014, Deloitte has found construction job openings to increase by 50% while the number of new hires trails behind at 14%.

The implications of this labor shortage pose significant risks to companies eager to take on new construction projects.

Without the laborers needed to meet deadlines and execute flawless finishing touches, customer satisfaction becomes a challenge.

For companies eager to get repeat customers it’s vital that crews have the laborers needed for seamless execution.

How to handle this key construction industry trend: Investing in human resources

With the number of construction workers steadily declining, companies need to do more with fewer laborers. Supplementing your team’s efforts with more construction equipment or workflow automation are sure-fire ways to maximize productivity.

Another way you can tackle this challenge is to invest in your team. Here are a few ways construction companies can do this:

• Creating training programs, certification programs, and apprenticeships.
• Offering bonuses and performance-based incentives.
• Paying competitive wages.

Following these recommendations has the potential to:

• Reduce employee turnover. In the construction industry, it’s at 21.4%, the highest of all industries.
• Help you recruit top talent. Bonuses and competitive wages will attract more skilled laborers.
• Identify and develop talent and future leaders. Investing in training programs gives you an up-close look at potential hires so you can train for your exact business needs.
• Better client relationships. Having engaged and committed workers gets noticed by clients. Clients also notice when there are delays and communication breakdowns when workers quit in the middle of a project, so it’s best to minimize this risk.

5. 3D printing having a bigger impact on the construction industry

As mentioned above, 3D printing continues to play a big role in construction.

While we aren’t 3D printing homes on a mass scale yet, there are examples of mansions and office buildings having been 3D printed — in record time, no less.

A more practical use for 3D printing in construction is for low-income and emergency housing. The current cost of an entirely 3D-printed home is around the $10,000 mark and there’s a possibility of that price tag being reduced even further to $4,000.

Currently, 3D printing of materials, building components, and parts for construction equipment is already in full swing.

The reduction in waste, turnaround times, and the ability to mass print custom designs without changing any machinery means 3D printing is a construction industry trend to have on your radar. 

6. The overall trend towards tech and digitalization in construction

Necessity is the mother of invention. With labor shortages and shrinking profits, tech in the construction industry promises increased productivity, efficiency, and safety.

Some of the influence that tech has had on the construction industry includes:

• Robotics like mechanical arms that perform repetitive tasks like brick-laying.
• Self-driving construction vehicles.
• Drones for inspections and land surveying. In fact, BigRentz reports that drone use has increased 239% year-over-year.
• The use of AI and simulations in collaborative building design.
• Wearable sensors to monitor worker safety.
• Smart project management like job scheduling and budgeting tools to reduce expenses and inefficiencies.

Tech has disrupted every industry, so it’s no surprise that the construction industry is following suit.

Construction industry technology trends

Just like many other industries, technological advancements are changing the construction sector. These include developments such as the Internet of Things and AI fuel construction growth. 

But what trends should you keep an eye on that will change the face of construction? Here are a few:

• High-definition surveying and geolocation ensures that construction locations can be surveyed at lightning speed.
• 5-dimension building information modeling utilizes AR to make it easier for companies to define numerous aspects of a project.
• Digital collaboration tools allow workers and managers to stay connected and work together, even when they’re miles apart.
• New building materials ensure construction projects are finished faster, safer, and better.
• 3D printing gives construction workers fast access to tools and equipment.
• Robots can work on repetitive, menial tasks so human workers can concentrate on the more important jobs.
• Wearable tech like GPS trackers and biometric sensors make construction sites safer for workers.

While all of these developments may seem difficult to learn and implement in your own business, they allow you to get more things done in a safer manner than before. 

It’s your responsibility as construction business owners to grow your business, embrace these new trends before the competition does, and deliver the best value for your customers. 

Residential construction trends in 2022

The pandemic has caused more and more people to realize the importance of being comfortable at home, resulting in an increase in personalized touches in residential spaces. 

Environmental issues and the looming specter of climate change are also driving construction industry trends across the world. 

To make sure you’re always ahead of the curve, here are some key trends in homebuilding for 2022:

• Energy efficiency: More and more people are concerned about sustainability. With green neighborhoods appearing all across the country, you need to know how to make environmentally-friendly homes. 
• Outdoor spaces: Being stuck at home for the past few years has inspired people to recreate natural settings at home. You may get more requests for livable outdoor spaces like an exterior living room or outdoor kitchens.
• Smart home technology: Smart homes are taking the world by storm. Expect more people to want programmable thermostats, clap-activated lights, and other smart appliances in their homes. 

Access to more home improvement resources and inspiration has also affected homeowners. Some important stylistic trends that are developing this year include:

• Shiny or matte black accents on windows, doors, and furniture.
• Requests for “biophilic design” featuring organic materials, with an emphasis on letting more sunlight and fresh air into the house.
• Maximalist designs with cultural touches that compensate for the lack of travel opportunities during the pandemic.

Commercial construction trends In 2022

As with residential buildings, there are plenty of developing trends in the commercial construction landscape. 

For example, new technologies have increased demand in certain areas of the construction business, and the rise of hybrid working environments has changed the way we see offices.

Some key trends you should keep an eye on are:

• Potential supply chain disruptions: Recent shortages in wood, steel, and lumber may lead to high material costs this year. Lock prices early so they don’t surge once your project kicks off.
• Skilled labor shortages: Many construction companies are still struggling to recruit skilled construction workers, causing delays. Scout trade schools and colleges to ensure you have a steady supply of labor. 
• Modular construction: Improvements in modular construction help contractors reduce waste and speed up projects. 
• Drone usage: Many dangerous tasks can now be done with robots and drones. This improves the safety of your construction workers. 
• Sustainable offices: Similar to residential trends, sustainable offices have become a priority for companies looking to build office space. Expect requests for more greenery and energy-saving measures.
• Multifunctional rooms: With more people working at home, companies are trying to maximize the space in their offices by implementing multifunction rooms and open working spaces instead of cubicles and individual offices. 

Construction industry trends FAQS

How big is the construction industry?

The construction industry is one of the world’s largest industries in terms of spending. In the United States, the construction industry is valued at 1.36 trillion USD and contributes 4.2% to the country’s GDP. 

As of November 2019, there are 10.2 million construction workers in the United States, making up nearly 8% of the entire U.S. workforce.

Experts estimate that the construction industry will be valued at 10.5 trillion USD by 2023 with an annual growth rate of 4.2%. 

Many factors drive this industry’s growth, like rising infrastructure needs and increasing housing demand due to population growth and urbanization. In the United States alone, there were 1.7 million new housing projects started as of early 2021.

The increased demand for green construction, smart buildings, structure rehabilitation, and advanced building materials is expected to influence the industry in the years to come. 

Construction companies should also expect residential construction demand to stay high due to lower interest rates and more people being able to afford homes.

How to get out of the construction industry?

Unless you’re retiring, getting out of the construction industry likely means you need to move into a new line of work. Depending on your age and experience, this can be tricky. 

To prepare yourself for a career change, you can:

• List your interests to start mapping out a new career path.
• Identify transferable skills that you picked up in construction but can be applied in other careers.
• Consider applying for an apprenticeship or have an experienced mentor take you under their wing.

If you’re shifting gears and changing careers well into your working life, you may face challenges such as:

• Fear of uncertainty, especially if you have a family to provide for.
• Lack of confidence because you only have experience related to the construction field.
• A feeling of having no direction because you haven’t looked into other options and careers aside from construction.

However, you shouldn’t be worried because career changes are possible, even if you’ve been working in construction since the start of your career. 

If you’re confused about what career to shift into after leaving construction, you can consider working as a:

• General contractor: Contractor work is a construction-adjacent job where many of your skills are transferable and useful.
• Project manager: The organizational and time management skills you learned in construction will serve you well in a project manager role, where you’re expected to keep track of deadlines and make sure projects stay under budget. 
• Real estate agent: Familiarity with construction and property development ensures you know the ins and outs of the homes you’re selling. As a real estate agent, you’ll likely have an easier time making a convincing case for buyers to purchase homes. 

Is there a concrete shortage in 2022?

Parts of America are going through a concrete shortage in 2022. The high demand for concrete in the construction sector coupled with low supplies results in high concrete prices. 

This concrete shortage may be attributed to factors such as:

• Interruptions in the supply chain.
• Carrier fleet service hour changes and loading restrictions.
• Limited capacity on cargo trains.

If your construction company is affected by the concrete shortage, you may need to lock suppliers in earlier or change your construction methods. 

Fortunately, this shortage is expected to be temporary, and supply should resume to normal in the second half of 2022.

Looking forward: Key construction industry trends to come

This review of key trends in the construction industry highlights the crucial role technology will play in the future of construction. Looking into this next decade, you can expect:

• Urban development to be more complex.
• Construction costs to increase.
• New materials to address concerns about affordability and sustainability. 
• More employee incentives to supplement a declining workforce.
• 3D printing to rise in popularity.
• Higher use of technology in the construction industry.

With the emphasis on rebuilding infrastructure, sustainable buildings, and smart cities, you can expect more opportunities for those construction companies that embrace the changing landscape of the industry.

As we progress through 2022, we’re excited to see how key trends in the construction industry will evolve.

See how a CRM solution can help you grow your construction business in 2022 and beyond.

Image credit: Yancy Min via Unsplash