According to McKinsey, construction is the largest industry in the world. And it makes up about 13% of global GDP. But it is also one of the slowest growing. However, new construction technologies are looking to speed up the rate of change. Read on to learn about some of the most important trends in the construction industry.
1. The Virtual Construction Market Sees Rapid Growth
The construction industry is increasingly adopting a variety of new technologies. Many of these technologies involve virtual design and visualization, ranging from Building Information Modeling (BIM) to Construction Management Software.
Virtual design and construction (VDC) describes the growing use of virtual environments to engineer and visualize the construction of structures before they’re actually built.
These virtual environments can be accessed via desktop and mobile devices, along with augmented and virtual reality hardware. And there’s no wonder why this is catching on. It’s estimated that reworks of faulty or incorrect builds account for nearly 30% of construction industry costs. Virtual design helps cut down on this by allowing builders to first build structures in a virtual environment.
Building Information Modeling (BIM) is probably the most popular VDC tool. It allows architects, engineers, or anyone else to generate a virtual model of a physical building or structure. As of 2023, the BIM market was worth $8.06 billion and is expected to grow to $9.43 billion this year.
The construction industry took somewhat of a hit during the pandemic but is expected to rebound over the next few years. North America is expected to be the market leader over this time period, capturing over 30% of the market.
The last decade, though, offers some hope: NBS’s 2020 BIM Report found that 73% of its respondents were using BIM as of 2020. Compare this to 2011, when almost half of all NBS respondents had never heard of BIM.
Combined with modular construction and prefabrication, BIM is consistently helping construction firms maintain budgets and keep tight construction schedules.
Construction Management Software (CMS) is also now an important tool for many major construction companies. Google search growth for “construction management software” is up 133% in 10 years.
CMS helps construction managers by allowing them to store and access data, blueprints, and documents all in one place.
The global construction management software industry is estimated to be worth $9.3 billion. It is expected to grow to $23.9 billion by 2031 (a CAGR of 10.2%).
Autodesk is the largest player in the architecture and construction software market. The company brought in over $1.32 billion in 2023 revenue. Its AutoCAD, BIM 360, and REVIT technology are basically the standard in virtual modeling — with its traditional AutoCAD software being used by 85% of the market. And it’s estimated that the company captures about 31% of the overall market. Autodesk’s software consistently ranks at the top of “industry best” lists.
Expected growth and market share of the North American BIM market between 2021 and 2025.
2. Prefabrication and Modular Construction Change How Structures are Built
Modular construction typically involves constructing at least 60–90% of a building or other structure before bringing it to the construction site. Search interest in “Modular Construction” is up 67% over 10 years.
Prefabrication, while technically part of modular construction, occurs when certain components of a structure are assembled or manufactured off-site. The prefabricated parts are then easily affixed to the building.
The global modular construction market was estimated to be $97.51 billion as of 2023. It is expected to grow to $120.4 billion by 2027. While it has been relatively small compared to the entire construction market, the modular construction industry has experienced rapid growth in the past few years.
The North American permanent modular construction industry is expected to reach USD $33.99 billion in 2024 and grow at a CAGR of 4.61%. Its share of new construction projects rose by 51% between 2015 and 2018. Over the same period, the industry’s total revenue more than doubled.
Increasingly, general contractors, architects, and developers are finding that prefabrication and modular construction help keep costs low, shorten the construction timeline, and reduce waste.
Because of this, roughly 90% of respondents to Dodge’s Prefabrication and Modular Construction Report said that prefabrication and modular construction methods were more beneficial than traditional construction.
Certain kinds of buildings do, however, lend themselves better to modular construction. Dodge found that, overall, healthcare facilities are expected to benefit the most from modular construction and prefabrication. Hotels and motels, as well as multifamily residential structures, didn’t trail far behind though.
As recently as 2020, hotels and motels led the pack as major beneficiaries of modular construction. According to Dodge, roughly 43% of architects and engineers and 29% of general contractors and construction managers said that hotels and motels were the fastest-growing industry for modular construction. This trend is only continuing.
Source: Dodge Data & Analytics
3. Smart Cities Change the Way Construction Companies Operate
One of the biggest trends affecting the construction industry is the rise of smart cities. A smart city is a city that is basically fully integrated with the Internet of Things (IoT).
The infrastructure and buildings all assist in collecting data to help everything run more efficiently. It’s estimated that global smart city spending totaled $189.5 billion in 2023.
IDC predicts that investments in smart cities will grow to $203 billion in 2024. Some estimates also indicate that the market will double again to over $676 billion by 2028. As this concept matures, it will likely change the way most of the construction industry operates.
More and more construction industry participants will have to start using tech advancements like IoT in their building materials. A recent study shows that about 60% of US building managers are familiar with IoT technology. And 43% expect IoT technologies to impact their business in the next few years. The construction industry will have to adjust soon, as large corporations and cities are making agreements to construct smart cities within the next year.
Toyota has announced a 2,000-person smart city outside of Tokyo, dubbed “Woven City”. It is set to break ground next year in the foothills of Japan’s Mount Fuji, about 60 miles from Tokyo. The company plans to test autonomous vehicles and “smart buildings” in an environment with actual citizens.
4. Green Building Helps Tackle Environmental Issues
Green building involves building environmentally sustainable buildings using an environmentally sustainable construction and design process.
As governments and regulatory bodies around the world focus on environmental factors in every industry, more construction and design firms are implementing green building methods. According to Dodge’s World Green Building Report, almost half of all construction and design respondents said they expected the majority of their projects to be green by the end of this year. A McKinsey study found that 90% of construction industry respondents believe that a shift toward environmental sustainability is imminent.
The green building revolution is doing particularly well in the residential building market. Over one-third of single-family and multi-family builders build at least half of their projects using green building techniques.
Energy efficiency is widely regarded as the top practice of home builders in improving green home performance. In fact, 96% of green home builders build their homes to be energy efficient.
This makes sense, considering building operations themselves account for the vast majority of greenhouse gas emissions in the construction and real estate sectors.
Because of this, over 90% of single-family residential builders said they used some kind of energy efficiency practices in the construction of at least some of their buildings. 69% claim they use it in most of their buildings.
5. Living Building Materials Go Mainstream
One of the most radical new trends in the construction industry is the use of living building materials. Searches for “living building material” have increased by 4,900% over the last 5 years.
This part of the industry is still very young, but there are signs of increased adoption. When looked at from an environmental standpoint, the decision to switch to this kind of material is clear. The entire construction supply chain accounts for 11% of global greenhouse gas emissions.
Embodied carbon (carbon released in the construction process) accounts for close to 30% of greenhouse gas emissions in the construction and real estate sectors.
The number of new buildings being built also isn’t expected to slow anytime soon. To accommodate growing populations, the global building stock is expected to double by 2060.
Cement is one of the main areas targeted by the living material sector. Cement production alone accounts for 8% of global CO2 emissions. And emissions will need to fall by 16% before 2030 for the sector to come in line with the Paris Agreement on climate change.
According to the BBC, if the cement sector were a country, it would be the third-largest carbon emitter, behind China and the US. That’s why new products like self-replicating concrete and self-mending biocement are being developed.
Biocement is grown using biological materials instead of created from non-renewable materials. And the process actually absorbs CO2 instead of emitting it. Innovations like this can allow “manufacturers” to grow building materials that self-replicate, making it much easier and more efficient to scale.
BioMason Inc. is one of the most interesting companies in this area. The company was founded in 2012, and it uses biological processes to grow biocement blocks.
Source: DroneDepoly
6. The Construction Industry Benefits Heavily from Drone Technology
Another way that the construction industry is becoming more efficient is through the use of drone technology.
Once thought of as novelty items, drones are now responsible for huge cost savings on major construction projects. It’s estimated that drone usage has significantly cut down on the annual $160 billion in waste that occurs on construction sites.
In fact, using drones to measure stockpiles of building materials in real time has resulted in a 61% increase in measurement accuracy.
Many are hoping drones will significantly reduce construction worker injuries and deaths. In the US, 20% of workplace deaths occur in the construction industry — an industry that only makes up 6% of the US labor force.
By using drones, construction companies are able to survey and inspect various locations without putting any actual humans in harm’s way. As a result of drone technology, the construction industry has seen a 55% increase in safety standards.
DroneDeploy — a drone cloud computing company — completed a study that found that the construction industry was adopting drone technology faster than any other industry.
The Kinetix suspension system is a high-tech way to protect construction workers from impact in the case of a fall.
7. Tech Solutions Improve Safety
Construction had the most fatalities of any industry last year. Both the number of deaths and the fatality rate increased: In 2023, well over 1,000 construction workers died on the job. Statistics like this are leading to a call for improved safety equipment using tech.
Hard hats have been one of the most prevalent pieces of safety equipment at construction sites for the past several decades. However, there’s now a “helmet revolution” taking place in the industry.
Safety helmets, like the ones you see people wearing while rock climbing, are becoming popular for a number of reasons. For example, because they have a chin strap, they stay on even if the worker falls. They also provide a greater field of vision and a more compact, ergonomic fit for the user.
Many of the latest developments in safety helmets focus on reducing impact in order to prevent injuries to the head and neck. One helmet from HexArmor features a Kinetix suspension system that’s able to absorb and direct impact out and away from the neck and spinal cord. When compared to other helmets, this system reduces 40% more of the impact force.
There are even some safety helmets, like those offered by twICEme technology, that integrate the user’s medical information, emergency contact information, and coordinate directly into the helmet.
Since twICEme technology works via NFC technology, no GSM, wi-fi, or 3G/4G/5G is needed for communicating.
Wearables are another example of tech-enabled safety equipment that’s becoming popular on construction sites.
Kenzen, a tech company focused on predicting and preventing industrial workforce injuries, has developed a continuous health monitoring program for construction workforces. Workers wear a small device on their upper arm to monitor core body temperature, heart rate, sweat rate, and activity level. The data feeds into an app that’s visible to the worker and to the manager.
8. Construction Firms Face Major Labor Shortage
The construction industry has been facing a labor shortage for the past several years. But in 2022, it reached “crisis level”, according to the CEO of the Home Builders Institute. In May 2024, there were 339,000 jobs open in the construction industry.
The shortage of workers is impacting project timelines and completion rates. In a recent survey, 89% of construction firms reported having difficulty in filling positions and 61% said they are experiencing project delays due to the labor shortage.
The Home Builders Institute says the lack of construction workers is a main factor in the shortage of housing inventory and affordability. Their data shows that nearly 42% of the construction labor force works in residential construction.
One industry analyst says there are 25% more unfilled positions than hired. He expects that “jobs that were predicted to cost $500 million end up costing $600 million because you’re going to need to pay people more”.
In addition to higher salaries, the industry is trying a variety of strategies in order to recruit and retain workers. Some are launching programs to reach kids as early as grade school and get them interested in construction jobs. Other firms are focused on diversity in hiring, attracting interest through social media, and offering retention bonuses.
One bright spot is enrollment in construction industry trades courses at community colleges is up.
9. Material Costs Soar as Shortages Remain
For many construction firms, certain materials are hard to come by. And, even if they can source the materials, the cost is soaring. In a recent survey, more than 90% of builders say they’re facing material shortages.
In that survey, builders were presented with a list of 24 materials and asked to specify which shortages they were experiencing. More than 70% of builders marked half of the items.
Steel is one material that’s scarce and expensive. During the last decade, the average price for hot-rolled coil steel was about $400 per metric ton. An executive from Tata Steel says that steel will cost $600 per metric ton in the coming years. More than one-third of contractors are seeing a steel shortage. These shortages and price hikes mean that many construction firms are worried about their bottom line.
In a recent Deloitte survey, 20% of E&C (engineering and construction) respondents reported that their operating profitability and industry margins are likely to get worse.
10. 3D Printing Use Increases
The construction 3D printing market is growing at an incredible rate. Reports show a CAGR of 100.7% through 2030. This type of 3D printing can use a variety of materials: concrete, geopolymers, fiber, sand, and others. Some innovators have even used biodegradable materials, like mud, soil, and straw in 3D-printed houses.
In most instances, only the frame and walls of a building can be manufactured with 3D printing. However, technology is advancing so fast that plumbing and electrical fixtures can also be integrated into the building via 3D printing.
The construction industry stands to reap several benefits from 3D printing. The first benefit is time-savings. Technology works faster than we do and California-based Mighty Buildings has the proof. The company built its Mighty Duo B, a 700-square-foot 3D prefabricated home, in just eight weeks. And it only costs $314 per square foot.
The company reports that its projects reduce construction timelines by up to 75%. The lower price is another notable feature of 3D printing in construction. Black Buffalo 3D, the provider of a large-scale 3D construction printer, says that using its machine to build a 1,000-square-foot space costs 40% less than traditional wooden frames that are built on-site.
ICON, a company that constructs homes using 3D printing, built a 650-square-foot home in 24 hours at a cost of $10,000. They say they’ll be able to get the price down to just $4,000 in the future.
Because of the cost-savings of 3D printing construction, Habitat for Humanity has been watching the trend closely. The organization built its first 3D-printed house in Virginia in late 2021. They have a second 3D-printed home in Arizona. The organization says nearly 80% of the 2,400-square-foot home is made with 3D technology.
11. Construction Robotics And Automation Enhance Productivity
Reduced waste, improved safety, enhanced productivity, closing the workforce gap — early adopters in the construction industry are achieving all of these goals by employing robotics and other automation strategies. Search volume for “automation in construction” is gaining interest, up 62% in the past 5 years. The market for construction robots is expected to reach $359 million by 2031.
A survey commissioned recently by ABB showed that more than half of construction companies are currently using robots and 81% expect to introduce robots within the next 10 years.
Construction firms are deploying robots to complete a variety of tasks on-site and off-site. The TyBOT, a device that ties rebar, is one of the most popular construction robots. Tying rebar without a robot requires workers to make repeated hand and arm twisting movements while stooping or bending at the waist. It’s literally back-breaking work.
TyBOT takes less than four hours to set up and ties rebar at a rate of 1,100 intersections per hour. That provides up to a 40% productivity boost compared to human labor. And it reduces the occurrences of worksite injuries.
TyBOT’s creator, Advanced Construction Robotics, recently released IronBot. This robot self-places up to 5,000-pound bundles of rebar. When used alongside TyBOT, the robots can improve productivity by at least 250%.
Another firm seeing success with construction automation and robots is Dusty Robotics. Search volume for “Dusty Robotics” has increased by 2,900% over 5 years.
The company’s FieldPrinter can autonomously mark layouts on the concrete slab of construction sites. The process usually involves workers manually measuring and using a chalk line to show where features should be in an interior construction site. The automated process is up to 10× faster than the traditional method.
It fully integrates with CAD and BIM models to mark specifications for all trades in a single pass. Only one operator and a tablet interface are required for operation. The FieldPrinter prints points, text, and lines directly on concrete, plywood subfloor, or asphalt.
Autonomous construction vehicles represent an even larger market than construction robots. In 2023, the market was valued at $8.8 billion.
Built Robotics, founded in 2016, develops software and hardware to automate construction equipment. The company’s Exosystem installs on late-model excavators in just minutes. The vehicle is then geofenced in a specific area and monitors itself with a 360-degree camera. One trained operator can start the machine and walk away. The system has a base cost of $3,000 per machine per month.
Conclusion
That’s about it for our list of important construction industry trends for the next few years. This article was reprinted with permission from Exploding Topics.
