Construction and Industrial Activity Remains Strong; AI Advances in Construction Marketing
Construction Activity Remains Strong
Construction activity and backlog continues to be a high levels in Carolinas and the national overall. The Associated Builders and Contractors (ABC) reported that its Construction Backlog Indicator (CBI) increased to 9.2 months in February 2023, up 1.2 months from February 2022. The Southern region posted the highest backlog among all regions. The Construction Confidence Index (CCI) for sales, profit margins, and staffing levels also increased in February, with all three readings above 50, indicating growth expectations over the next six months.
Despite a pessimistic economic outlook and high borrowing costs, contractor backlog and confidence continue to rise, reflecting the broader economy’s resilience against rising interest rates. However, ABC Chief Economist Anirban Basu warns that if economic momentum fades this year, as many forecasters predict, backlog and confidence may decline, particularly for contractors working predominantly on privately financed projects. In other ABC economic news, non-residential construction spending remained strong, while construction labor remained a challenge as construction job openings increased.
Industrial Real Estate Market Activity Remains Solid
Agracel’s Jason Vaughn, P.E. provided insights on the industrial real estate market (IREM) and its expected growth in 2023, albeit at a slower pace due to factors such as supply chain disruptions and the e-commerce boom. Supply is predicted to catch up to demand and outpace it in early to mid-2024, resulting in a correction of construction material costs and lease rates in some markets.
Interest rates, which increased significantly in 2022, have impacted project financing, leading to project cancellations and delays. Access to capital varies, with institutional capital flowing freely for strategic allocations, while bank financing for non-institutional-grade properties has become more challenging due to waning appetite, maxed-out lending caps, and stricter credit underwriting.
ABC Carolinas Salutes Top Performers
ABC Carolinas announced that 36 member companies were named to Associated Builders and Contractors’ 2023 Top Performers list, a national ranking that lists the association’s commercial and industrial contractor members that build long-lasting, high-quality construction projects, based on work hours.
ABC Carolinas’ Interim President & CEO Kristen Powell noted, “Our members have worked incredibly hard this year and we are impressed that 36 of these firms have made the list of Top-Performing U.S. Construction Companies. The people that make up ABC Carolinas remain laser-focused on their own companies (i.e., our member firms), all while supporting and volunteering at ABC Carolinas, which is why the Carolinas Chapter is so successful. We truly appreciate their engagement.”
ABC’s Clemson Student Chapter Places in National Competition
ABC Carolinas Chapter Clemson Student Chapter recently competed in the Construction Management Competition (CMC) held during the ABC Convention 2023 in Orlando, Florida, on March 16. This robust competition begins in mid-January, with the students putting together a bid package for a current project that is in progress.
Artificial Intelligence (AI) Tools Make Their Way to Construction
Construction marketers are increasingly adopting ChatGPT, an AI-based language model developed by OpenAI, to streamline their processes and enhance effectiveness. With over 100 million users since its November 2022 launch, ChatGPT is being used for various applications, including content creation, search engine optimization, customer engagement, lead generation, proposal support, content review, and competitor analysis.
ChatGPT’s key advantage is its ability to learn from vast amounts of data and generate natural language responses similar to human language. This enables faster and relevant content production, benefitting numerous construction marketing applications. Although still in its infancy, ChatGPT has significant potential to revolutionize interactions with machines and content generation in the architecture, engineering, and construction industry.
AI has been used in marketing for years, with companies like Google, Amazon, and Facebook leveraging AI for content generation and personalization. AI-powered tools are transforming the marketing landscape, enabling businesses to optimize resources, improve content quality, streamline efforts, and make data-driven decisions.
2023 GroundBreaker Nominations are Now Open
Each year, GroundBreak Carolinas recognizes those individuals that are positively impacting the industry through the annual GroundBreaker Awards. Previous winners have included several ABC Carolinas members. Do you know someone that is having a positive influence in the industry in North Carolina and South Carolina? Nominate someone today!
