13 Jun General Contractor Industry
Posted at 19:38h in Business, Challenges, company, Construction industry, General contractor
TOP 5 CHALLENGES FOR GENERAL CONTRACTORS IN 2018
- The lack of skilled labor has been a significant issue for the last few years. The industry is trying to bring new talent to construction by increasing wages across the board. The average pay rate in construction increased by 3.2 percent over last year compared to an average increase of 2.5 percent for private industry as a whole. Despite efforts to entice new talent, the shortage remains.
- Construction is going high tech, and fast. Building Information Modeling (BIM) software, mobile apps for managing projects in the field and drones that document projects from every angle are a few of the new tech tools streaming into the market. They’re helping project teams move faster and with greater precision. But finding the best solution and deploying it across a small team or large organization requires technical resources and investments of both time and money.
- New building designs are becoming increasingly complex. The finished structures are visually dramatic and energy efficient. But creating these buildings requires experienced tradesmen that can execute quickly and with great precision. Meanwhile, managing project timelines, resources and budgets has also become exponentially more complicated. GCs taking on projects in 2018 will spend more time managing projects that in years past.
Top general contractors on the challenges facing the construction industry
- The construction industry is continuing to grow and evolve. According to the 2019 Dodge Construction Outlook, total construction starts will rise to $808.3 billion, up from $806.8 billion in 2018. At the same time, it’s in the midst of increased technology adoption. Achieving this level of growth and change creates challenges, from recruiting and retaining employees to digitization and communication.
- The biggest challenges construction faces are the time crunches, labor shortage, and construction budgets. More and more people are being told that they need to go to college, so we have fewer people joining the labor force. This is creating a whole mess of issues. At the same time, we need to cut costs and shrink our schedules. As an industry, we need to find tools that help us do that because right now construction is lagging in the tools that we have.
- The construction industry is facing a lot of different challenges. It’s what you would call a dinosaur industry. We haven’t changed a lot in the last couple hundred years, but I think the tide is turning and we’re starting to see technology come in and influence new people and younger faces. People are going to college to get degrees in construction. Everything is starting to turn, and construction is becoming more efficient and more dynamic.
- Construction projects are mass collaboration, so one big issue is always communication. There are challenges across the board to make sure that it’s open and free communication, from the subcontractors, owner, client, and architect to ourselves and the contractors.
7 Biggest Challenges Contractors Are Facing
- Many contractors are seeing geographical challenges as the main aspect holding them down from expanding their business. The problem is: differences in costs and regulations between the states are so extensive that most contractors don’t bother dealing with then. This is not a long term solution, but a way to bury your head in the sand.
- The biggest issue contractors have to deal with is finding skilled employees to commit long-term. In the fear of passing a project deadline, contractors see themselves being forced to hire low-cost seasonal workers.
- If you’re not online, you don’t exist – that’s a common phrase emphasizing the main mistake most contractors make who underestimate the power of online marketing.
- Good quality comes with a price. Many contractors go the slippery slope by trying to snatch clients with a cheap price. To keep their company profitable, they must get cheaper materials and find employees who settle for a lower paycheck.
- Without a doubt, competition is heavy and as a contractor starting up their journey it might be terrifying stepping into the spotlight, bidding against “heavy lifters” who are already recognized and trusted in the market.