工程設(shè)計和建設(shè)行業(yè)展望 engineering and construction industry outlook

2024engineeringandconstructionindustryoutlook

Sustainablepracticesandtechnologyadvancementsarelikelytoshapetheindustryin2024.

ARTICLE·18-MIN·DeloitteResearchCenter

READforEnergy&Industrials

Theconstructionindustryentered2023markedbya7%increaseinnominalvalue

addedanda6%increaseinnominalgrossoutputcomparedtothepreviousyear.'As

ofthethirdquarterof2023,nominalconstructionspendingmaintainedasteady

upwardpath.?However,iftrendsinrealGDPdatacontinuefrom2022,itis

importanttonotethatmuchofthetoplinegrowthislikelybeingdrivenbyprice

inflationversusvolume.Inadditiontograpplingwithongoinginflation,theindustry

isfacingvolatilityinmaterialpricesandincreasinglaborcosts.Anothersignificant

challengeistheongoingshortageofskilledlabor,whichcontinuestoimpactthe

sector.Moreover,highinterestratesandtighterlendingstandardsarealsoimpacting

constructionactivity.

However,lookingaheadto2024,therecouldbeaboosttoconstructionassociated

withmanufacturing,transportationinfrastructure,andcleanenergyinfrastructure,as

fundsfromthreekeypiecesoflegislationpassedin2021and2022-the

InfrastructureInvestmentandJobsAct(IJA),theInflationReductionAct(IRA),and

theCreatingHelpfulIncentivestoProduceSemiconductors(CHIPS)Act-are

expectedtoflowintotheindustry.'Assuch,constructionconfidenceremainshigh,withtheAssociatedBuildersandContractors(ABC)identifyingexpectationsforan

increaseinprofitmarginsandstaffinglevels,particularlyinthefirsthalfof2024.4

7

2024energy,resources,&industrialsoutlooks

ReadmorefromtheDeloitteCenterforEnergy&Industrials2024outlookcollection

AsE&Cfirmsplanfortheupcomingyear,therearefivekeyareasthatmayhelp

themcapitalizeontheprojectedindustrygrowthandtackleunforeseenchallenges:

·Heightenedfocusonsustainabilityandefficiency

·AdvancementofdigitalizationandgenerativeAI

·Differentiatedimpactofmarketuncertaintyacrosstheresidentialand

nonresidentialsegments

·Changeinoperatingstrategiestomanagevolatilityincosts,demand,and

customerpriorities

·Newworkforcenormstobridgethelingeringtalentandskillsgap

Keytrends

01

02

03

Sustainabilityisabusinessimperative

in

Digitalizationandgenerativeartificial

Marketuncertaintiesandbroadereconomics

constructionwhoseuptrontcostsmay

be

intelligencearelikelytobefoundationalfor

maydrivefurthersegmentationinthe

balancedthroughlong-termefficiencystrategies

valuerealizationintheconstructionindustry

ndustry,asthenonresidentialsegmentislikelytobebuoyedbyaninfluxoffederalcapital.

04

Engineeringandconstructioncompaniesmayemployoperationalstrategiestohelpnavigate

pricevolatilitywhileplanningforsteadywageateincreases

05

Theindustryislikelytoseeashiftinfocuso

workforcestrategiesfromtalentretentionto

talentattraction

Source:Deloitteanalysis.

Deloltte./us/en/insights/research-centers/center-energy-industrials.html

1.E&Cfirmsstrivetobalancesustainabilityandefficiency

Sustainabilitycontinuestobeabusinessimperativefortheconstructionindustry.

E&Ccompaniesfaceamultidimensionalchallengeonthisfrontastheyadaptto

evolvingmarkettrendsandenvironmentalregulationsandmeetcustomerdemandsforgreenerbuildings,whilealsopreventingconstructioncostsfromacceleratingtoo

rapidly.

AccordingtotheInternationalEnergyAgency,buildingsaccountfor30%ofglobalenergyconsumptionand26%ofglobalenergy-relatedemissions.'Withthegrowing

adoptionofefficientbuildingmaterialsandsustainableconstructionpractices,the

industryisexpectedtobebetterpositionedtoacceleratechangesandalignwiththeInternationalEnergyAgency'sNetZeroEmissionsby2050Scenario,whichrequiresallnewbuildingsand20%ofexistingstructurestobezero-carbon-readyby2030.6

AccordingtotheUSGreenBuildingCouncil's2023report,sustainabilityisatop

priorityformostsurveyedEXCfirms,asitalignswiththeirorganizationalmission

andbusinessstrategies.'Strategiessuchasreducingtheembodiedcarbonofkey

constructionmaterials,passivedesignprinciples,andtheuseofenergy-efficient

equipmentcanacceleratedecarbonizationbyminimizingtheoverallcarbondioxide

emissionsassociatedwithboththeconstructionandoperationofabuilding."

TheUSgovernmentisalsoprioritizingsustainableconstructionthroughtheFederalBuyCleanInitiative.Forinstance,theinitiativehasledtothespecificationofmore

thanUS$2billionfortheprocurementoflower-carbonconstructionmaterialslike

asphalt,concrete,andsteelforfederalprocurementandtheiruseinfederallyfunded

projects.ItalsoresultedintheallocationofUS$100milliontosupportstate,local

government,andpublicutilitypurchasesofbuildingproductsderivedfrom

convertedcarbonemissions.9

TheIRAincentivizesbusinessesforenergy-efficientimprovementssuchasinsulation,

lighting,andheating,ventilation,andairconditioningsystemsthroughfundingof

morethanUS$1.7billionontopofadditionaltaxcredits."Efficiency—thatis,

deliveringstructuresthatminimizeresourceusagewhileoptimizingoperational

performance—islikelytobecomekeytosustainableconstruction.Theupfrontcostsassociatedwithsustainableconstructioncanbeoffsetbyreducedlong-termlifecyclecosts.Suchreductionsincostsmaybederivedfromtheusageofhigh-performance

facadesandenergy-efficientsystems.

Furthermore,firmscanexperimentwithanarrayofpassivedesigntechniquesto

bolsterbuildingefficienciesandreduceenergydemand.Thesetechniquesmayincludeorientingstructures(buildings)toavoidorcapturesolarheat,designinggreenroofs

toreduceheatabsorptionandprovideinsulation,incorporatingenergy-efficient

fixturesanddaylight-responsivelightingcontrolstoreduceenergyconsumption,anddesigningbuildingenvelopesforeffectiveinsulationandmoisturecontroltostabilizeindoortemperatures.“Deliveringsustainablestructuresinacost-effectivemannerisparamountforE&Cfirmsindifferentiatingthemselvesinthemarketandsatisfyingcustomerpriorities.E&Ccompaniesarelikelytocontinueexploringinnovativeand

technology-enabledstrategiestobalancesustainabilityandefficiencyin2024.

Inadditiontobalancingsustainabilitywithefficiency,theincreasingoccurrencesofsevereweathereventssuchashurricanes,floods,andwildfireshaveraisedthefocus

onresilientdesign.AshighlightedbytheUSGreenBuildingCouncil,building

ownersandcustomersareshowinggreaterinterestingreenbuildingapproachesthat

addressarangeofresiliencedemands.Withsuchnewdemandsonboth

sustainabilityandresilience,theindustryispoisedtotakeadvantageofanincreasein

thedevelopmentofadvancedandemergingmaterialssuchasself-healingorhigh-

performanceeco-friendlyconcrete,electricalsteel,graphene,andcarbonfiber

composites.Thesenewpurpose-drivenmaterialsareengineeredtosurpassthe

capabilitiesofnaturallyoccurringmaterialsandofferbenefitssuchasdurability,

flexibility,circularity,stability,andefficacy.4Sustainablematerialssuchastreatedwood,low-carbonbricks,andsilicafumesmayalsoseeanuptickasE&Cfirms

worktoreducethecarbonfootprintofnewbuildings.

Regardlessofthemethodforachievingsustainability,E&Ccompaniesareexpectedtobeginprioritizingsustainabledesigntacticsandstructuralperformanceduringtheconceptualphase.Suchearlyplanningcanresultinsubstantialreductionsincarbonemissions.'6E&Ccompaniescanalsoincorporatecirculareconomyprinciplesearly

withinthedesignandconstructionprocess.Basedontheseprinciples,companies

mayengageinreusingmaterials,designingstructuresfordisassembly,andreducing

wastetoaddressenvironmentalconcernsandsupportbusinessgrowth.

Utilizingtechnologiesandtechniquessuchasoptioneeringpoweredbygenerative

design,simulations,andbuildinginformationmodeling(BIM)canallowcompaniestomodelabuilding'sperformanceandcarbonfootprint,andestimatebothcostand

schedulepriortoconstruction,therebyenablingseamlessprojectdelivery.These

technologiescanalsoimproveefficiency,increasedeliveryconfidence,andhone

resourceallocation,ultimatelyloweringprojectexpensesandrisks.Furthermore,

applicationsofBIM,IoTsensors,dataanalytics,andenergyoptimizationtechniques

cancontributetoreducingemissions.

2.E&Cfirmstounlocknewvalueby

leveragingdigitalizationandadoptinggenerativeAl

Inrecentyears,theExCindustryhasgraduallyadopteddigitaltechnologiestohelpimproveprocessesandefficiencies.However,withtheriseofgenerativeAIandother

disruptivetechnologies,thesectorisnowseeminglypoisedtorealizeimprovements

inprojectdesign,scheduleoptimization,costcontrols,siteinspection,safety,

compliance,andqualityassurance.

TheDeloitteAIInstitutedefinesgenerativeAIas“asubsetofartificialintelligenceinwhichmachinescreatenewcontentintheformoftext,code,voice,images,videos,

processes.…”17

Industryleaderscontinuetoprioritizetechnologyinvestments,aimingforefficiency

improvementsinordertomitigateongoingworkforce,cost,andsupplychain

challenges.TheriseofgenerativeAIcouldmarkapivotalmomentintheindustry'sdigitaltransformation,buildingonthemomentumgainedduringthepandemic.BothE&CfirmsandconstructiontechnologycompaniesareactivelyexploringgenerativeAI'spotentialforenhancingefficienciesandareworkingonsolutionstoharnessthis

technologytosuittheirbusinessneeds.!9

InarecentDeloittesurvey,55%ofchiefoperatingofficersindicatedthatthemain

barriertocreatingbusinessvaluewithartificialintelligencewasidentifyingtherightusecases.?“Additionally,topofmindforExCfirmsareconcernsaroundcyberrisk,datasecurity,andlackoftrust.2'Developingcomprehensiveriskmitigationstrategies

canhelpaddressconcernsascompaniesexploregenerativeAIapplications.

Figure1presentssomeusecasesthatE&Ccompaniescouldconsiderleveragingin2024andbeyond.Thesescenariosillustratethediverseapplicationsofgenerative

AIacrossvariousconstructionstagesthatcanhelpcompaniesachievebenefitssuch

ascostreduction,enhancedbuildingperformanceandsafety,andgreater

sustainability.

Figure1

EngineeringandconstructioncompaniescanleveragegenerativeAlapplicationsforvaluegenerationin2024

Valuerealization

Isecase

Application

Projectmanagementproficiency

Generationofoptimizedsiteplans

Developsiteplansbyautomatingcertainaspectsofthedesignprocess

Projectscheduling

Optimizeschedulebyanalyzingresourceavailabilityandvariousotherconstraints

Contentsummarization

Extractkeyinformationfromtechnicaldocumentsandsynthesizefieldreports

Designandengineeringadeptness

Efficientbuildingautomationsystems

Recommendthedesignofefficientandsustainablebuildingautomationsystems

Generativedesign

Createnew3Dproductdesignbasedoninputsandconstraintsto

visualizemultiplealternativesofaparticularindustrialcomponent

Generativematerialsdesign

Utilizescientificprinciplestocreatenewmaterialswithoptimizedproperties

0perationalefficiency

Processoptimization

Organize/reorganizeprojectactivitiesbasedonstatusandnotifyorprepareacontingencyplan

Smartsummariesfordronesurveys

Summarizelargevolumeofdronefootageandenablequeryingforvariousapplications

Enhancedsafety,riskmanagement,andcompliance

Qualityassurance

Generatesyntheticimagesrequiredtotrainmachinesandgenerate

preventivealgorithmsalignedwithautomatingsiteandqualityinspection

processes

Ensuringcompliance

Automatecompliancecheckingofbuildingdesignsagainstlocalbuildingcodesandregulations

Source:DeloitteAlInstitute.

Deloitte.|/us/enfinsights/research-centers/center-energyindustrialshtml

WhilecompaniesexperimentwiththepracticalapplicationsofgenerativeAI,they

cancontinuetoaccelerateadvancementsinvariousotherAIandemerging

technologies.Thesetechnologiesmayincludedrones,autonomousguidedvehicles,robotics,BIM,IoTsensors,andothersthatarebeingdeployedtohelpdrivevalue

realization.Forinstance,withfoundationaldigitaltechnologiesalreadyinplace,

dronesandautonomousguidedvehiclescouldbeusedinarangeofscenariosatconstructionsitesfrominspectionandworksitemonitoringapplicationstotask

optimizationinareassuchasmaterialdelivery,surveying,andinstallations.

Theseemergingtechnologiesandtheirapplicationscanimproveprofitmargins,

fosterstrongerpartnerships,helprelationshipsbetweendifferentstakeholdersand

functionaldepartments,andimproveintegratedprojectdeliverythroughtransparent

andtrusteddata-sharing.ExCfirmscanleverageadvancementsintechnologynot

onlyforincreasedproductivitybutalsotoexplorehigher-levelopportunities,

includingnewservicesorbusinessmodelsthatmayhavebeenuneconomical

previously.23

Itisimportanttorecognizethatthesetechnologiesdependonhumanintelligenceand

oversight.Regardlessofadvancementsinconstructiontechnology,industryleaders

areexploringahuman-in-the-loopconceptthatrequirestheinvolvementofhighlyskilledindividualstocarryouttaskssuchasfact-checking,in-depthanalysis,and

understandingthecomplexdetailsneededforeachconstructionprocess.24

Furthermore,fortechnologyinitiativestogainwidespreadadoptionandscalability,

companiesshouldhavestrongecosystemalliancesandpartners,"including

technologyproviders,operationsvendors,contractors,andautomationvendors,

amongothers.

3.E&Cfirmstonavigatethevariedeffectsofongoingeconomicuncertainty

Afterayearofrisinginterestratesandhighinflation,therehasbeenfurther

segmentationinthemarketsincelastyear'sE&Cindustryoutlook.Theconstruction

industryisexpectedtofacethelingeringeffectsofeconomicuncertaintyforyet

anotheryear.Thefederalfundsinterestraterecordeda22-yearhighinSeptember2023at5.3%,anda108%year-over-yearincrease.Additionally,theconsumerpriceindexforallurbanconsumersinUScitiesincreasedby4%yearoveryearin

August2023.?"FurthertighteningofmonetarypolicybytheFedcouldtrigger

concernsofaneconomicdownturn,evenasinflationcools.?

Broadereconomics,monetarypolicy,andoverallmarketuncertaintyhavehadvaried

impactsacrossdifferentsegments.TotalconstructionspendingstoodatUS$1.98

trillioninAugust2023,a7.4%increasesincethepreviousyear.Thistotalspending

wasprimarilydrivenbynonresidentialconstructionspending,whichrecorded

growthat17.6%year-over-yearincreaseinAugust2023.Bycontrast,residential

constructionspendingdecreasedby3%forthesameperiod,underscoringtheoverall

weaknessinthehousingmarket(figure2).2”

Figure2

Totalconstructionspendingwilllikelycontinuetogrowin2024,drivenheavilybythemanufacturingandinfrastructurecategories

Shareofresidentialandnonresidential(USStrillion)

………Tot

1.5

1

0.5

0

20192020

Nonresidential

Residential

2023

2022

2021

Nonresidentialconstructionspendingbycategory(USSbilion)

450

360

Commercial

realestate

270

180

Institutional

Infrastructure

Manufacturing

90

0

20192020202120222023

Note:Commercialrealestateincludeslodging,office,andcommercial.Institutionalincludeshealthcare,educational,religious,publicsafety,andamusementandrecreation.Infrastructureincludestransportation,communication,power,highwayandstreet,sewageandwastedisposal,watersupply,andconservationanddevelopment.

Source:DeloitteanalysisofdatafromUSCensusBureau.

Deloitte./us/enlnsights/rtesearchcenters/center-energyindustialshtml

Fortheresidentialsegment,theperformanceofthehousingmarketin2024dependsonbroadereconomics.FromJanuarytoAugust2023,totalhousingstartsdecreased

by13%comparedtothesameperiodofthepreviousyearlargelyduetoarisein

interestratesandinflation.0AccordingtoBureauofLaborStatisticsdata,housing

inflationinUScitiesroseto5.7%yearoveryearinAugust2023andwasa

significantcontributortotheincreaseincoreconsumerpriceinflation.Giventhe

segment'ssensitivitytoeconomiccycles,continuedhighinterestandmortgagerates

willlikelyaffecthousingaffordability,reducedemand,andrestrainthesegment's

activity.Deloitte'sUnitedStatesEconomicForecastpredictsonlymodestgrowthin

housingconstructionthroughthenextyear.}1

Thenonresidentialsegment,ontheotherhand,islikelytocontinuetogrowsteadilyasfederalfundsflowintotheconstructionofchipfabricationplants,biotechnologyfacilities,EVbatteryfactories,andothercleanenergyprojectsin2024,andasseveral

high-valueprojectsbreakground."Manufacturingconstructionspendinghadthe

largestannualincreaseinconstructionspendingof65.5%asofAugust2023.

Manufacturingconstructionislikelytogrowfurtherin2024,buoyedbyfundingofmorethanUS$52billionfromtheCHIPSActandclosetoUS$152billionfromthe

IRAandIJA.33

Furthermore,withIJAfundsflowingintoprojects,transportationinfrastructureconstructionspendingincreased9.4%yearoveryearinAugust2023.Goinginto

2024,therecouldbeamoreprominentimpactofIJAfunding,"witharound

US$58.8millionearmarkedfortransportation,broadband,climate,andenergy

constructionprojects.”Substantialinfrastructureinvestmentsfromstateandlocal

governmentsarealsolikelytodrivegrowth.36

Finally,theIRAhasalsocreatedopportunitiesfortheconstructionindustrythrough

taxcreditsandenergyincentivesfortheexpansionofcleanenergyinfrastructure,

suchasrenewableenergygenerationfacilitiesandelectrictransmissionfacilities,with

variousfundingopportunitiesavailablethroughlate2024.”

Despitetheflowofpublicfunds,marketuncertaintywilllikelyinfluencevarious

aspectsofconstructionprojectsinthenonresidentialsegment.Projectdeliveriesmaybedelayedduetofinancingchallengesanddisruptionsinthesupplychain.Marginscoulddiminishasthecostofmaterialsandlaborfluctuatesinresponsetoeconomic

uncertainty.Financingcouldbecomemoreexpensiveasinterestratesfluctuateand

impactthefeasibilityofcertainprojects.Finally,backlogsinthesegment—whichcanhelpE&Cfirmssustainoperationsthrougheconomicuncertainties—maybereducedifambiguityintimelinesandfinancingofnewprojectspersistsinthecomingyear.As

ofAugust2023,backlogsinthenonresidentialsegmenthadincreasedto9.2

months3andareexpectedtosustainthesegmentgoingintonextyear

Ascompaniesdecideonthenecessarynextstepstonavigateuncertaineconomic

times,theindustrymayexperienceanincreaseinmergersandacquisitionactivity.

BetweenOctober2022andSeptember2023,theindustryrecorded184M&Adeals,

withatotalestimatedvalueofcompleteddealsatUS$3.7billion.39Manyofthese

dealsarelikelyaimedatstrategicexpansionintonewmarketstobetteraccess

additionalrevenuestreamsorathorizontalintegrationtohelpachievecostefficiency

andenhanceresiliencetomarketfluctuations.Theindustryalsorecorded84M&A

dealsfromprivateequityinvestors,withatotaldealvalueofUS$4.5billion.40M&A

activityfromprivateequityinvestorsmayincreaseastheycontinuetoinvestin

infrastructureassetsandcapitalprojects.

E&Ccompanieswilllikelyneedtomakestrategicdecisionsbasedontheir

capabilitiestoovercomeambiguitiesinthemarket.Someconstructioncompanies

maychoosetofocusontheircorebusiness,deepeningtheirexpertiseandaverting

risk.Ontheotherhand,somemaychoosetoreinventorexpandbymakingtargeted

investmentsinbusinesstransformationand/ornewM&Aactivitytoreapgreater

rewardswhenthemarketregainsstability.

4.E&Cfirmslikelytobemorestrategictonavigatepersistentcostvolatility

USconstructionfirmshavebeenfacingsignificantcostpressuresdriveninpartby

frequentfluctuationsinlaborcostsandmaterialpricesinthelastfewyears.Cost

fluctuationscancomplicateprojectplanningandpromptdeliberationsoverpausing

orterminatingprojects.Severalfirmshavecanceledorchangedthescopeoftheir

projectsduetoincreasingcosts.Managingcostvolatilityisatoppriorityforfirms

andcanslowdownconstructionstartsifnotmanagedclosely.

Theaveragewageratesinconstructionhavebeenrisingsteadily.AccordingtoBLS

data,averagehourlywagesincreasedby5.2%yearoveryeartoUS$36.70inAugust

2023andaround17%sincethebeginningofthepandemiclockdownsinMarch

2020(figure3).43Constructionwagesareexpectedtoexperienceupwardpressurein2024aslabordemandcontinuestooutpacesupply.Thissituationmayaffectsmaller

firmsmoreandrenderthemmorevulnerableagainstlargercounterpartscapableof

offeringcompetitivesalariestoattracttalent.Risingwageratescanalsohavean

impactonprojectexecutionandprofitmargins,especiallyiftheelevatedcostscannot

betransferredtoclients.

Pricevolatilitycontinuedin2023despiteamoderateabatementinthepricesofkeyrawmaterialsinthefrstfewmonthsof2023(fgure3).Thethirdquarterof2023hasonceagainseenariseinprices.Thesepriceshavenotreturnedtoprepandemic

pricelevels,affectingtheprofitabilityofmanyprojects."AsE&Cfirmsworkto

navigatecostvolatility,theyshouldconsiderseveralkeysforpricing:

·Theoverallpriceofconstructioninputsincreased0.1%yearoveryearinAugust

2023.4Moreover,priceshaveincreasedby40.7%sinceFebruary2020.

·Pricesofrawmaterialssuchasironandsteel,lumberandwoodproducts,

softwoodlumber,andsteelmillproductsdeclinedinAugustbutremainwellover

pre-pandemicprices.47

·Constructionmachineryandequipmentcostsincreasedby6%yearoveryearinAugust,andbyover26%sinceFebruary2020.Similarly,concreteproductspricesincreasedbyover8%yearoveryearinAugust,andbyover32%sinceFebruary

48

2020.4

Figure3

Constructionfirmswilllikelyhavetonavigatecontinuedpricevolatilityandplanforsteadyincreaseinwagerates

Monthlypercentchangeininputprices

5%

2.5%

Monthlypercentchange

0%12-monthmovingaverageofmonthlypercentchange

-2.5%

-5%

20192020202120222023

Averagehourlywagesinconstruction(USS)

40

35

19%increase

since2019

30

25

Q1Q2Q3Q4Q1Q2

20192020

Q3

Q4

Q1

2021

Q2Q3Q4Q1Q2

2022

Q3

Q4

Q1

2023

Q2

Source:DeloitteanalysisofdatafromUSBureauofLaborStatistics.

Deloitte.|/us/en/insights/research-centers/centerenergyindustrials.html

Thesepricelevelscouldincreasethebidpricesandprojectcosts,affectingthe

profitabilityofE&Cfirms.Asconstructionequipmentpricesincreaseandastoolsmanufacturerscontinuetheirrecoveryfromrecentsupplychainchallenges,ExC

companiesmayincreasinglyturntoequipmentandtoolsleasingandfinancingin

2024.Althoughpricesofrawmaterialscouldstabilizewithinthenextfewmonths,machineryandequipmentpricesarelikelytoremainhighasleadtimescontinueto

prolongdeliveries.

In2024,E&Ccompaniescouldconsiderthefollowingoperationalstrategiestohelp

recovercostincreases:

·Discussingandestablishingfixedpaymenttermswithcustomers,asirregularor

inconsistentpaymenttermscanimpactthecompany'sfinancialperformance

·Implementingsupplychainstrategiessuchascategorymanagement,strategic

suppliercontractnegotiations,andstrategicprocurement

·Applyingadisciplinedcost/overhead(i.e.,operationsnotchargedtocustomers)

managementapproach,asbacklogsmaynotremainsustainable

·Engagingwithcustomersearlyintheprojectlifecycleforbetterdecision-making

andplanning,therebyexpeditingdesignchoicesandenablingadvanced

procurementofrawmaterials

·Monitoringandanalyzingcostdatatostreamlineoperationsandpinpoint

optimalprojecttypes

·Leveragingprefabandmodularconstructionmethodstohelpkeepmaterialcosts

down,reducelaborcosts,andshortenprojectschedules,therebycurtailingbudget

overruns.

5.E&Cfirmslikelytoadapttonewworkandworkforcenorms

TheE&Cindustrycontinuestograpplewithfillingopenworkforcepositionsandis

facedwithasignificantlaborgap.InAugust2023,jobopeningsinconstruction

totaled350,000,a1.4%increaseyearonyearandmorethan13%higherthanprepandemiclevels.Atthesametime,thequitrateisstillhigherthantherateof

ayoffsanddischarges—highlightingthevoluntaryexitoftheworkforce.4"

Asmentionedinlastyear'soutlook,theriseofremoteworkandgreatercareer

flexibilitycontributedtoretentionissuesintheE&Cspace.?°Itnowplaysa

significantroleintheincreasingnumberofjobopenings.TheABCrecentlyreported

theE&Cindustryneedsmorethan342,000newworkersin2024.'1Theriseof

wagesacrossmultiplesectorsisdrivingpotentialworkerstooptforsafer,less

physicallydemandingpositions—forexample,thoseintheserviceandIT

industries."2Furthermore,thepipelineofworkersisdiminishingassupportforthe

tradesinmanyhighschoolshasgivenwaytoemphasisoncomputerlearning.

Thisunavailabilityofskilledworkerscandirectlyinfluenceacompany'scapabilityto

meettheircommitments.Duetoalackofavailablequalifiedcandidates,68%of

constructionfirmssurveyedarestrugglingtofllopenpositions."Inordertomeet

theincomingdemandforwork,69%ofsurveyedfirmsexpecttoincreaseheadcount

inthenextyear.55

Movingfromastrategyfocusedonretention,asoutlinedinthe2023outlook,toa

strategyforfillingthetalentgapcreatedbytheabovechallenges,isfurther

complicatedbyaretiringandagingworkforceinExC.Overone-fifthof

constructionworkersareolderthan55yearsandoftenrepresentthemostskilled

workersonajobsite.Inhiring,firmsstruggletofindyoungerworkerswith

comparableskills.AnABCstudyfoundthatamajorityofsurveyedexecutivesare

extendingtheiroutreachtoincludehighschoolgraduates,communitycolleges,

veterans,andpeoplewhoarereenteringtheworkforce.Su