3 construction industry trends in 2023

Written by LetsBuild

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New year, new trends, right? There are some unique construction trends in 2023, but we also have more of the same. The same issues plaguing the industry last year—labour shortages, supply chain disruptions, high material costs, lower profit margins, etc.—followed us into 2023.

Between those lingering challenges, high inflation, and continuously rising interest rates, developers and contractors are competing more than ever for their supplies, workers, and business continuity.

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Top 2023 construction trends shaping the future of the industry

Unemployment rates, skilled workers getting ready to retire, continuous supply chain delays, and the push toward digitalisation will challenge the construction industry this year.

2023 also brings more unpredictability for company execs and project managers, making managing schedules, budgets, and timelines challenging. These challenges will likely result in even smaller profit margins in the months to come.

But we also have the opportunity to make the most of these trends, strengthen our profitability, improve our workforce, and take back our profit margins with the right strategies.

Here’s what the top construction industry trends in 2023 look like:

1. Construction companies continue to struggle with a global labour shortage.

The shortage of skilled labour has been an issue for a few years in the industry, and it’s a trend that’s not going away anytime soon. And while this isn’t a construction-specific problem, our industry has been impacted by the ongoing worker shortage more than most.

In the US, this shortage is only amplified by an increase in residential and commercial projects, increasing the demand for labour and worsening the gap between supply and demand.

According to economist Anirban Basu, the construction industry will need close to 600,000 new workers this year—and that number will rise if construction spending continues trending upward.

And this problem isn’t just in the US; construction companies worldwide are looking for ways to solve their shortage of skilled labour. Last year, construction job vacancies in Canada were at an all-time high with no signs of improving in 2023. The UK, France, Germany, and countries across the EU are all in the same boat.

More to read: How technology can help you maintain your profit margins at residential projects

Construction daily logs importance | LetsBuild2. Construction firms fight to keep their profit margins through supply chain disruptions.

We know all too well about what’s been happening with the supply chain since the onset of the pandemic in 2020, but what can we expect in 2023? Unfortunately, it won’t improve nearly as much as we want.

Between supply chain disruptions, global inflation, and predictions of a decline in new construction, there’s more pressure than ever on our already slim profit margins.

And amid the high costs of construction materials, labour shortages, transportation costs, extreme weather conditions, and other world events, the supply chain disruptions we’ve been dealing with only look to be worsening in 2023.

These shortages have led many construction companies to pre-order their materials; however, this ties up their cash, implements new storage costs, and adds additional risk in an industry that’s already unpredictable.

Of course, the labour shortage affects our profit margins, too, and with one-fifth of the industry’s workers set to retire in the next few years, the need to spend more on attracting and training younger workers continues to rise. While this cuts into our profits today, it’s necessary for the future of our companies and the industry as a whole.

3. Construction organisations that fail to adopt emerging technologies will fall behind.

Our industry may be slow to adapt to new methodologies and technologies, but the longer we put off digitalisation, the more time it takes to catch up to competitors employing the latest construction technology.

Technology is transforming the construction industry, but organisations continue to rely on more traditional methods and paper processes, citing reasons like a lack of budget, labour, and awareness.

Companies worldwide are investing in construction software to improve both on- and off-site productivity. Mckinsey stated years ago that the majority of construction projects experience cost and budget overruns, and that statement still rings true in 2023.

Implementing construction site management apps can help organisations combat the problems associated with labour shortages and supply chain disruptions by streamlining their communication and processes to reduce rework—one of the most significant causes of productivity loss.

Further reading: 5 tips to improve construction workforce management

Stay ahead of construction trends in 2023 to protect your bottom line

The key to starting off strong in 2023 is preparedness. According to Deloitte’s latest industry outlook, one of the best ways to be prepared for the volatility we face is to increase our use of digital technologies like construction management software to improve our productivity and efficiency during the ongoing disruptions in the industry.

If you want to stay ahead of your competitors, the time to digitalise your processes is now. Don’t fall behind—book your personalised demo of our construction management apps to see how we can help you stay profitable no matter where industry trends take you.