Are we still holding the market share to a shrinking pie? What are the challenges that a declining demand poses? When is it a painful reality and not a function of the business cycle? Margin erodes, markets diminish and the livelihood of your team gets tarnished. Ask Sears or any other major retailer, as they close brick and mortar locations while the “warehouse in the clouds” takes over the retail world. Shared economies like Airbnb and Uber disrupt business models, and the future of retail construction and transportation is in question.
If we have doubts, then imagine, how many parking garages will be constructed in the next 10 years when the demand for automobiles is going to be reduced. Consider the declining profits of automotive manufacturers and rental companies, as it’s a matter of time until we see consolidation and exits. If you suggest that population will drive the housing market, think again. The sense of ownership is a myth. Welcome to the era of KATERRA, which is disrupting the core business model of housing and retail construction. One could expect that rising housing prices will not sustain the business models that residential construction enjoys today.
There is a revolution coming. How can this productivity and cost revolution, enabled by the software technology, transition construction into the 21st century? Lowering costs and increasing productivity will be the core essentials for the survivors. Connectivity and sustainable solutions will drive consumer buying practices and social impacts will drive our habitats.
Augmented reality, data and predictive analytics and virtualization will play an important role in our industry’s future as we get disrupted. Procore, AUTODESK, Raxar, Trabajo and Symple are examples that show why our industry should embrace technology to be competitive and maintain our cost advantage. Structures will have to be built stronger and last longer to decrease service life cycle cost.
Another big factor is the shrinking labor force. With stricter immigration laws and scarcity of workforce, construction companies will need to rely on technology and automation. One might wonder how many I-Generation college grads will be looking for construction careers. How we can retain existing employees and attract new workforce will depend on building Better, Faster, Safer.
There has never been a better time to implement advancements of technology in the construction sector for Better, Faster, Safer.
Muneer Merchant is a vice president with Structural Group. Structural Group has offices around the world, including a TOPCOR Structural office in Charleston, S.C. he can be reached at firstname.lastname@example.org.