The near-term future appears bright for contractors working in commercial and residential construction, according to a new study, 2018-2019 Vertical Market Series – Construction, released last month by the Equipment Leasing & Finance Foundation (ELFF).
The study provides an outlook on the U.S. construction market sector confidence, anticipated spending, and key developments and trends impacting this sector over the next couple of years. Prepared by ORC International, the study indicates that the all-time high in construction spending in 2017 will carry through in 2018, with predicted U.S. construction industry growth of five percent. It also examines issues impacting the sector, including labor shortages, trade tariffs, corporate tax rate reductions, equipment acquisitions, and technological developments.
The study draws from a wide range of sources to provide an outlook for the construction sector, including construction and architectural consultancies and trade groups, published industry forecasts, media reports, and analyses, most of which paint a future of continuing growth.
Given the recent reduction in the corporate tax rate, one unanswered question is whether construction firms will invest savings into creating incentives like increased pay to attract workers, spend it for new technologies to improve productivity or simply put in their pockets to improve their family’s bottom line.
On the negative side of the Trump Administration’s policy is the steel and aluminum tariff decision, prompting fearful responses from some construction and heavy equipment associations about rising costs.
Beyond the impact of tariffs, the study points out that while the construction industry is generally very conservative about new the technology, many firms are testing the benefits from emerging technologies, such as robots, drones, and autonomous construction equipment. These advancements in technology will continue to help contractors and builders solve some of the industry’s major problems: safety; productivity; and labor shortages.
New technologies are helping reduce the number of workers placed in dangerous conditions. Over the last year, ECA Magazine has reported on the changes coming to our industry. For example, drones are increasingly conducting site surveys and inspecting bridges. Autonomous equipment is coming to earthmoving and site work operations. Robots can handle repetitive tasks such as bricklaying or rebar tying. It is imperative that contractors and builders keep abreast of construction industry trends and developments to stay ahead of their competition.
We will continue to report on these and other challenges to what appears to be our bright future.
Download the full report at //bit.ly/ELFFConstruction. All foundation studies are available for free download from the ELFF online library at //store.leasefoundation.org/.
By Brandon Pensick, ECA President
Email: [email protected]