Top 3 Trends in Commercial Building Construction to Look Out For

The year 2022 will see the construction industry emerge and expand after a rocky era of revising estimates and shifting expectations. Stricter rules help to limit margin for error and waste while rising construction prices and labour shortages continue to put pressure on the sector to come up with innovative, competitive new concepts.


The COVID-19 pandemic altered how the construction sector conducts business since last year, affecting everything from project scheduling and closure to employee hiring and client meetings. Future industrial trends will be impacted by the pandemic’s effects in a number of ways. The construction management site is constantly changing, new technology is making it easier to win jobs, and profit margins are rising. 


commercial construction trends


The roles of frontline employees and industry professionals are evolving due to trends and movements. Here are some trends to keep in mind for the latter part of this year. 


Top Commercial Construction Trends

1. Construction Put-in-Place Growth 

With $1.46 trillion in construction spending through November 2021, the year is on track to shatter new records for building put in place. We estimate that the total put-in-place for 2021 will be close to $1.57 trillion once the final figures are in, an increase of 6.8% over 2020.


The U.S. Census Bureau compiles construction put-in-place, which represents the estimated total dollar worth of construction work completed in the country.


You should anticipate a put-in-place rise of 6.6 percent to $1.67 trillion for 2022. Following two years of declining construction spending due to the pandemic, nonresidential construction should get back on track and grow 5.6 percent to $837 billion in 2022.


Although it won’t grow as quickly as it did in 2021, spending on the residential buildings should still be high, rising 7.7% from the previous year. In 2022, it is anticipated that residential put-in-place will rise to $836.8 billion, roughly equal to nonresidential building investment.


Infrastructure spending will be one of the main drivers of construction expansion in place by 2022. With the $1.2 Trillion Infrastructure Investment and Jobs Act, Congress finally enacted a long-term infrastructure package after years of stopgap measures and short-term spending bills.


$550 billion in new federal investments will be made over the following five years for the purpose of building new infrastructure and performing urgently required repairs on existing infrastructure. 


The proposed legislation would allocate $110 billion for road, bridge, and infrastructure projects, $40 billion for bridge maintenance and replacement, $39 billion for public transportation, $66 billion for passenger and freight rail, $65 billion for broadband internet, $65 billion for grid reconstruction, and $55 billion for improvements to water infrastructure.


The bill is anticipated to be a significant job creator for the construction industry over the following couple of years, in addition to providing much-needed repairs and enhancements to our country’s deteriorating infrastructure. The big question is, where will those workers come from?

2. Construction Employment & Labor Woes  

When the pandemic first broke out in 2020, the construction sector lost almost 1.1 million jobs in just the two months of March and April. According to the Bureau of Labor Statistics, the construction sector had brought back all but 248,000 of those jobs by the end of the year.


After a year that saw job growth that was largely up and down, the construction industry only added 160,000 positions in 2021. These modest advances resulted in a loss of 88,000 jobs in the construction sector from pre-pandemic levels. Starting from 9.4% percent in January and tumbling all the way down to only 5.0 percent in December of 2021, construction unemployment was reduced by almost half.


The number of open positions fluctuated in 2021 as well, from a low of 242,000 to a high of 453,000 in October. 307,000 construction jobs are available, according to preliminary data from November 2021.


According to BLS data, the average hourly wage in the construction industry increased by 4.61 percent for all workers in 2021. Nonsupervisory workers fared slightly better, seeing their average hourly wages rise by 5.26 percent last year. Construction companies still have a ways to go in attracting and keeping the next generation of workers as they attempt to increase the number of skilled workers on their payrolls, in addition to raising wages.


Since the Great Recession, the construction sector has struggled with a lack of competent workers. The problem then, as it is now, is that older workers are leaving the business at a higher rate than new people are entering. To meet demand, construction companies will need to step up their efforts to find, develop, and retain competent personnel.


There is a reputation associated with construction employment that all of its occupations are filthy, risky, labour-intensive, and low-paying. While some of it is true, there are many high-paying jobs available in the construction sector, as well as many opportunities for professional growth into lucrative positions.


Community college enrollment, which offers technical training for many skilled construction jobs, is down 9.5 percent due to the epidemic, which isn’t helping matters much either. President Biden’s initial infrastructure plan included spending $100 billion on workforce development to establish apprenticeship programs and offer job training; regrettably, this was omitted from the final budget.


To start attracting and offering training to a younger workforce, construction companies will need to step up their recruitment and retention strategies in order to boost headcount in 2022 and beyond.

3. Material Costs & Supply Chain Issues 

The skyrocketing increase in the cost of building supplies was another major development in the industry last year. Early in the year, prices for products such as softwood lumber, oriented strand board, particleboard, ordinary gasoline, and diesel fuel more than doubled compared to the previous year. Plywood, asphalt, and iron and steel scrap all saw significant increases in price.


Even though prices for some materials have started to decline again in recent months, the majority of building material costs are projected to fluctuate further in 2022. Inputs for new construction cost, excluding capital expenditure, labour, and imports, increased by 20.54 percent from a year earlier, according to the most recent data from November 2021.


The lead time for materials delivery is now two, three, or more times longer than it was before the epidemic, and it appears that this trend will at least partially persist through 2022. As long as there is a high demand for resources, supply chain concerns are expected to persist, and potential issues with the faster-spreading omicron form may lead to even longer lead times for some commodities.


In order to ensure goods are delivered on time and to keep track of the potential for significant fluctuations in material pricing, contractors must stay on top of their suppliers and place their orders earlier than usual as they sign new contracts and take on more work for the rest of the year.

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