It’s a great time to be in construction. Private construction spending is higher than it has ever been, and there’s no sign of a slowdown coming any time soon.
However, construction problems have always existed, and an uptick in the market hasn’t magically made them disappear. In fact, increased spending in the private construction sector can even make some of these problems worse.
In other words, construction is great right now, but it isn’t all roses. We’re all dealing with our fair share of thorns, too. In this post, we walk through 15 of the most pressing challenges in the construction industry today. Read on to learn more.
Biggest Challenges Facing the Construction Industry
You don’t have to be in this business long to encounter some of the problems in the construction industry. If you’re been doing this for very long at all, you have more than likely encountered at least one of the following construction challenges:
The world is changing fast, and with it, laws and guidelines related to construction change. Adding to that, if you’re a cross-state or multinational construction company, you have to balance all kinds of competing laws and regulations that deal with construction to varying degrees.
It’s a lot to keep up with, and even if you have a lot of time and resources to devote to this particular issue, you can easily miss a notification about a change in the current laws or an entirely new rule. When that happens, you can get to the end of a project and be slapped with the shocking realization that you have just lost countless thousands of dollars because you’re going to have to go back and remedy the issue.
Scheduling is one of the most frustrating construction problems to date. Why? Because the advent of all kinds of automation and related technology has not solved the problem of getting people to show up when they say they are going to.
If you’re a general contractor, you know this well: You can’t have certain subcontractors on the site at the same time or you will risk work conflicts or injuries. Even when you get everyone to agree on a date and time ahead of time, you inevitably have a conflict or someone calling you saying they’re not going to make it.
And subcontractors aren’t the only thing you have to deal with in this arena. You also have to schedule your own people, who, thanks to a construction labor shortage, are already stretched thin.
Making matters worse, of course, are the supply chain problems that have halted key construction materials. Some days, everyone can show up on time but still not have enough to do because the materials and tools they need are floating on a container ship somewhere in the Pacific Ocean.
3. Technology adoption
For decades, the construction industry has been technology-heavy. That sounds like a good thing, but it’s actually one of the most acute problems in the construction industry. That’s because having technology doesn’t mean you have the latest technology.
It’s true — new tech comes out every year, and it is inevitably sold as “can’t-miss” innovation that will leave your company in the Stone Age if you don’t adopt it. As a prudent business owner, you can’t drop thousands of dollars on every new software or tool some salesperson calls you about. But if you say no to everything, you can be left behind.
It happens all the time. Construction companies are now known for being slow to adopt new technologies, many of which could cut costs and improve efficiency.
4. Communication problems
Communication is important in almost any industry, but in construction, it’s absolutely critical. That doesn’t mean, however, that it’s always done right on or off the build site. In fact, communication is one of the biggest construction problems most professionals in this industry face.
Communication problems can look a lot of different ways. Workers may be relying on word of mouth to communicate critical jobsite information, or they may be using apps or platforms to communicate that inherently leave particular staff members out of the loop. Meanwhile, communication between various subcontractors and general contractors is notorious for being difficult, if not sometimes impossible.
5. Managing documentation
Material orders, receipts, contracts, construction drawings, insurance confirmations and more — these are the files in the documents that cover most construction company managers’ desks. It’s a lot to manage, and failing to manage it properly can lead to extremely serious construction problems.
Here’s just one example: Let’s say a critical insurance document gets lost in the shuffle. Then, an accident happens at the construction site, knocking down most of the structure that was already built. The insurance wasn’t current, so your company is going to have to foot the bill for the fallout.
6. Available cash flow
Your subcontractors, vendors and suppliers don’t really care about when your clients pay. They want to be paid when they do the work or provide the service. That leads to one of the most stressful challenges in the construction industry: cash flow problems.
Compounding the problem is the fact that, by and large, construction company owners and managers didn’t come to the game with a background in finance and accounting — they bring real-life construction expertise to the table. That means that financial problems can look and feel a lot bigger to construction companies than they might to professional accountants.
7. The “blame game”
Every person on a construction site has 10 fingers on average, and you can expect most of them to be pointing at someone else when something goes wrong. The problem is that there are so many people to shift the blame to when you’ve done something wrong that causes a problem.
Executed a particular part of the flooring incorrectly? It’s not the flooring contractor’s fault — it’s because of unclear construction drawings. Of course, those unclear drawings were the result of a miscommunication between the crew and the architect. And that, of course, comes down to a problem with the client. As you can see, the blame game can take you everywhere except one place: a reasonable solution. And that creates major problems for many construction companies.
8. Labor/skill shortages
Blame it on the big push for everyone to get a liberal arts education or anything you like, but the problematic truth remains: There are not enough people to fill the open positions in construction in many countries. And even when there are enough people, there aren’t enough skilled people who can actually get the job done within spec.
This is a construction problem that creates ripple effects throughout the entire life of a construction project. Too few people means a delayed timeline. Not enough skilled people may mean hiring a separate contractor, inflating the budget. The list goes on.
9. Vandalism/theft on site
Since Ancient Greece and probably before that, people have been vandalizing things. And there is just something about construction sites that is particularly attractive to vandals who are looking to leave their mark. Graffiti and eve destruction of property can cause untold thousands of dollars of damage in a single night, and there’s very little many construction companies can do to stop it completely.
Perhaps even worse is the problem of theft at construction sites. Thieves have always seen construction sites as great targets — they have raw materials, expensive tools and little supervision after hours. And now that material costs have skyrocketed, the problem is only going to get worse.
10. Equipment management, upkeep, and replacement
There’s a lot to keep track of at the site of even a relatively simple and straightforward construction project. The tools involved are often irregular and astronomically expensive, and they require not only regular maintenance and upkeep, but relatively frequent replacement to remain up to code.
This is more than just a headache for construction companies. It’s a major expense that only gets much worse if you fail to keep up with it. Failing to do routine maintenance can lead to total failure, for instance, and that means a total replacement or a ridiculously expensive repair.
11. High insurance costs
Contractor insurance is a major expense, but that can be just the start if you’re running a full-blown construction company. You also have workers’ compensation insurance (depending on the laws of your state or province), as well as general liability insurance and a variety of other business-related insurance policies.
The problem, of course, is that you see so little return on your monthly investment in monthly insurance premiums. Even on the rare occasion that you do make a claim, you’re met with resistance from the insurance company at every turn, and your claim may even be denied or result in an unfairly low settlement.
12. Stagnant productivity
While technology and other workplace advancement have propelled productivity forward in a huge number of industries, productivity has turned into one of the major construction challenges builders face today. Productivity, for one reason or another, has stagnated in the construction industry, and that means building homes and other buildings is less profitable than it used to be.
It also means that construction timelines are often not in line with customers’ expectations. That means we’re dealing with overall lower satisfaction, and that is never a good thing in a customer-facing industry like construction.
13. Supply chain and materials
The COVID-19 pandemic was not kind to the global supply chain. With countless businesses shut down in every country on the planet, the timelines for shipping and sourcing materials have gotten longer and longer. Even now, when businesses have largely opened back up, construction companies are waiting for months to receive materials and tools that used to take mere weeks to source.
Meanwhile, the prices of goods have skyrocketed, meaning materials are not only in short supply and high demand, but their prices are in the stratosphere. This has become one of the biggest challenges facing the construction industry — an industry that already faced slim margins and logistical challenges before the pandemic struck.
Construction is consistently one of the industries that presents the highest risk of injury, and the reason why makes sense. You have a lot of people working on the same site, a place filled with heavy machinery and potentially deadly payloads. Injuries are bound to happen.
When they do happen, they are tragedies in and of themselves, but there’s a secondary disaster waiting to happen to construction companies whose employees suffer injuries: lawsuits and skyrocketing workers’ compensation insurance premiums. That’s not to mention, of course, the issue of scheduling when you’re short a few workers who were injured on the job.
Not all construction problems are about building or builders. Some challenges in the construction industry are about the customers. In fact, clients and homeowners can become a seemingly insurmountable problem for some construction companies for two key reasons: They forget to provide feedback or responses when the timeline dictates, and they change their minds often.
Dealing with those two issues on a daily basis takes a toll not only on your stress, but on your business’ bank account if you’re not careful.
The good news of all of this is that, for all of the construction problems we face, there are plenty of construction solutions to help. For example, Cedreo is a powerful, fast and intuitive floor plan software that can solve several challenges in construction.
For example, when you are dealing with indecisive and noncommittal homeowners, you can push them forward to the decision point by sharing photorealistic designs that stun them and create an emotional connection with the completion of the proposed project.
We’ve seen it work for countless construction professionals, and it can work for you, too. Try Cedreo today.