4 Economic Trends Impacting Construction for the Next 5 Years
Published on by Tyler Noel in Construction
Declining health and growing data are two of the four major economic trends that will shape the construction industry over the next half-decade, according to a new report by construction research and consulting firm FMI.
In “The New Economy Versus the Old Economy: Winners and Losers in Tomorrow’s Built Environment” FMI pros outline the four macro trends, driven by the way people are living and working in the post-pandemic world.
The Four trends
Urbanization –80% of Americans live in an urban area. They do most of their shopping online, including groceries. This means that logistics and cold storage facilities will continue to be in demand.
Declining Health – 60% of American adults are on daily prescription medication and patients are getting caught up on routine exams after a decline during the pandemic. Healthcare facilities will continue to be in demand though there’s some concern about the lack of medical staff that may inhibit providers from building.
Growing Data – A 50% increase in data center spending is projected in the next five years. This is driven by the continued evolution of technology along with the trend toward remote work. Pre-pandemic, just 5% of U.S. employees worked from home while 50% do today.
Power Distribution – Natural disasters have caused record power outages in recent years and are forcing the U.S. to invest in its energy infrastructure. The recent Inflation Reduction Act has multiple energy incentives that will drive producers to strengthen the power grid by investing in renewable sources.
Where we’ll feel the impact
Southeastern states are expected to see the biggest benefits from these trends with labor and business flowing into those areas while western and northeastern states are seeing a contraction in their local economies, particularly in the labor market.
Additionally, these projects are expected to be larger and more complex, many of them considered “megaprojects.” Projects at this scale tend to require additional cooperation between contractors to properly integrate various complex phases – they also require tight timelines, which will highlight the industry’s labor shortage woes.
New challenges mean new opportunity
While there are challenges present in the market, there is also opportunity. Knowing where to position your company in the market can be crucial to success.
If you’d like to talk about how these trends may impact your construction business, or want to find a better, more efficient process or improve your bottom-line business results, contact us for a free consultation with one of our top construction industry pros. As always, we’re here to help.