No other industry has weathered a global pandemic, economic changes, and a decade-long shortage of skilled labor better than the construction industry. Over the past two years, our industry has seen modular and offsite factories come and go, builders and skilled labor leaving and not returning contractors and factory owners have shown they are a hardy bunch, adapting to supply chain disruptions, skilled labor shortages, inflation and more.
That doesn’t mean adapting came easy.
The construction industry mirrors many of the challenges we’re seeing in the larger economy, including supply shortages, labor shortages, and structural demand shifts. Inflation in the construction industry is currently running 5 points higher than the overall economy.
The construction industry lost more than one million jobs in March and April 2020 alone. But by May 2022 the sector saw employment exceeding pre-pandemic peaks in 32 states. Even so, the sector continues to face talent shortages as demands for housing and infrastructure grow. Job openings in April hit an all-time high, but the sector’s unemployment rate of just 3.8% highlights the scarcity of available experienced workers, according to the Associated General Contractors. Material and labor shortages have caused significant price increases along with project delays.
With the increased demand for new commercial and residential construction and upgrades and improvements to current U.S. infrastructure, the construction industry is poised to experience unprecedented growth, construction experts predict.
Even though demand has shifted away from commercial office and retail to more demand for warehouses, data centers, and rental apartments, residential building is also in great demand in many states as well.
Developers are building single-family homes, but not for sale, for rent, With Customers 20 years ago demanded to buy the house but the customer of today actually prefers to rent because of the flexibility, wanting to be able to move out in a year or six months and go somewhere else.
There was talk of Millennials wanting this build-to-rent option before the pandemic, but the pandemic accelerated it.
People didn’t love living with shared walls when they were locked inside their apartments for however long they had to quarantine, but at the same time … younger folks don’t necessarily want the responsibility of the single-family home, and 30-year mortgage or they don’t have the means to buy in this environment.
Never fear! Offsite construction will not only adapt to changes but soon will be the most sought-after way to build homes and commercial properties.
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