Despite the threat of an impeding recession, construction industry experts such as the American Institute of Architects are expecting construction spending to increase by 6% in 2023. Coupled with the construction unemployment rate being at its lowest in nearly three years, the outlook for construction companies is trending positively. Yet, the industry is not immune to trouble and is still experiencing roadblocks and other hardships, leaving many wondering how they can meet demand and ensure success.
So, what are the current industry roadblocks and how are businesses responding? Like so many other industries, the construction world is still facing labor shortages triggered by the pandemic. Fortunately, the industry has minimized this issue by targeting high-school graduates and college-aged groups. The West Michigan Construction Institute, providing multi-trade construction education, is known for successfully recruiting these age groups and producing highly valued employees for several companies across the state. Regardless, businesses are still suffering from a lack of interest and talent.
The material shortage trend continues, with hordes of construction companies lamenting the lack of lumber and steel. Some have confronted this by buying materials well-ahead of a project so to have them once the team is ready to begin construction.
Unsurprisingly, the subject of sustainability continues to be a hot topic. Energy credits are a popular option, which incentivize construction companies to buy energy-saving materials and technology to then earn credit they can use for future purchases. Many businesses are also retrofitting existing structures, using surviving materials like lighting, HVAC systems and windows to save on resources.
Another industry trend, especially among the larger construction companies, is leasing fleet vehicles. As equipment is also hard to come by these days, renting out machines like forklifts and cargo vans allows business to retain the vehicles they need for longer periods of time.
The ultimate reasons why companies are currently acting in these ways are age-old—time and money. Materials today are expensive and in high demand. Labor, too, is at an all-time low and businesses are scrambling to find talented work to get the job done on time. Thus, companies are fixated on getting the equipment and employees they need at the cost of other internal, day-to-day operations.
This is where firms like Rehmann come in, offering outsourcing and advisory services. A huge time saver, outsourcing allows companies to focus on providing its services while enlisted professionals handle other day-to-day business operations like HR, IT or finance.
Cybersecurity is a popular department where construction companies—large or small—require assistance. As most businesses work with contractors and other third-party vendors, data is especially vulnerable to cybersecurity breaches which would not only affect employees but customers as well. Investing in a Chief Information Officer (CIO) leaves the IT needs—from security to everyday cloud management—to a trained professional who has expertise in both the area of focus and the industry.
Taxes are also a common place of confusion and stress as tax laws are continuously changing. CPAs can take charge of accounting needs while guiding you through the tax process, maximizing your tax return so you can use that money on other business needs. In extension, CPAs can provide auditing and assurance services, too.
Firms can even help with inventory management, helping your company build and execute a plan that will provide measurable results like the number of excess materials, ordering costs and quality of service from vendors. These results will identify where waste is and how you can save time and money in the future.
These are just a fraction of the services a firm like Rehmann offers to help your construction business succeed. Ultimately, stay up to date on trends and find an advisor who will not only help you grow, but one that can grow with you.