The construction industry is always changing and evolving. Today, the industry has a lot of upsides as well as some concerns. According to Construction Dive, U.S. contractors have their plates full. While the supply shortages of the post-pandemic still exist, it is far better than it was in 2021 and 2022. Rising inflation is also a concern, with prices going up and profits going down. The industry is still experiencing workforce shortages, so projects are taking longer than anticipated to complete.
Let’s not forget our increasing interest rates, as we’ve seen a 3.5% interest rate go up to 7.5% in a year. This rapid rise in rates has increased the costs of mortgages and forced a slowdown since some homebuyers can no longer afford to purchase a new home.
The 2020 Recession
The 2020 recession was short, but we are still feeling the impact on the U.S. economy and numerous industries, with the engineering and construction industry getting hit the worst. However, things are looking up in the following ways:
- Construction spending has increased; July 2021 recorded a record high.
- Workers are going back to work. Nearly 9 million of the 1.1 million workforce are back working.
- Those in the construction and building industries are looking for new ways to do business that enable them to keep their costs down.
Construction and Building Industry Look for Cost-Saving Measures
Many construction companies are working together to share ways to reduce overhead and make a bigger profit, just like many other industries. Here are some of the cost-saving measures many construction and equipment companies have instituted:
- Shop around for the best deals on equipment: This is no easy task when you consider all the different materials and equipment used in a simple building project. Many have used the same suppliers for years but are now looking for new sources.
- Repairing instead of replacing equipment: Many owners are looking for resources like crane repair services in St Louis, MO, instead of purchasing a new crane. More and more companies are offering repair services when previously they were a sales-only business.
- Group purchasing: Many business owners are joining group purchasing organizations. They are usually made up of builders, equipment vendors, suppliers, and other manufacturers that choose to work together for better discounts.
- Purchase quality products: Many are forgoing lower-quality tools and choosing high-quality tools that will last a long period. If a job is held up due to broken tools and equipment, it takes more time on the job, reducing profits. In addition, in some cases, you can find that your current equipment may be able to handle another function. By finding this out, the owner can reduce costs on a 2nd piece of equipment.
- Reduce waste: Being cognizant of waste is good for the environment, but reducing construction waste can also help save money. Some post-construction materials that usually end up in landfills can be reused or recycled. Saving money for the business owner and lessening our footprint.
- Take care of employees: One of our most important assets is people. There has been a big workforce shortage since the pandemic, so it is important to take care of employees and keep them happy. You should have an open-door policy that listens to the needs of employees and pays them a good wage. Good workers are hard to find.
As the world continues to rebound from the pandemic, savvy business owners are taking proactive steps to keep their businesses running efficiently. Whether it’s purchasing good equipment or getting other heavy equipment repaired instead of replaced, there are many ways industry leaders stepped up to the plate and tightened up their wallets.