Return to Reality

by Bill Tepe, President of NBIS

As we turn our attention to a new year, we hope to leave much of the disruption of the past few years behind us. Indeed, the challenges of the pandemic years have also created a new business landscape — with its own opportunities, as well as risks. But moving into 2023, it’s to our advantage to remain focused on the fact that, through it all, the construction industry hasn’t wavered. In fact, the industry is better positioned to take advantage of the work that’s coming its way than it has been in quite some time.

A key component of that positioning is revenue growth, and the global construction industry’s future looks very promising. With opportunities in the residential, non-residential and infrastructure sectors, the global industry is predicted to reach $14.41 trillion by 2030 with a CAGR (Compound Annual Growth Rate) of 7.3% from 2022–2030 (GlobalNewsWire). Growth being what it is, we must not assume that current labor challenges are just going to vanish in the face of opportunity.

The skilled worker shortage, especially in construction, will remain one of our biggest challenges throughout this decade. That said, it’s on all of us to continue to pursue access to young workers while also understanding what the modern workforce both wants and needs from a career — and do what it takes to show them that construction is a viable career option.

To that end, women in construction is an emerging and worthwhile part of this conversation. An upward trend that deserves the attention it began to see in 2022, there is growing evidence that women entering the sector are both a piece of the solution to the labor shortage, and a true value-add to the construction industry. Moreover, the industry will serve itself well to meet women workers where they are to make construction positions and career tracks more appealing to females looking for both immediate work and long-term opportunities.

PLAYING A PART

Labor challenges notwithstanding, the cost of construction materials has certainly been on everyone’s mind in recent years as well. But while prices remained high in 2022, according to the National Association of Home Builders and the CBRE (Construction Cost Index), the price increase percentage decreased and then stabilized during the second half of 2022. Both groups are confident that cost increases will return to the historical average of two percent and four percent in 2023 — along with an expectation that inflation will begin to taper off in early 2023 and return to near-normal levels by June.

Technology will play a big part in this shift. In fact, within the next five to 20 years, most experts agree that tech-enabled machines will handle most of the demanding, dirty and dangerous work on job sites. Companies the world over will need to embrace tech more and more as this digital presence continues to shape construction’s future. All the while, the importance of risk management will remain ever vital to construction companies and their workers. Labor challenges, specialized equipment and increases in the number of projects will only escalate the demand for certification and training, and companies large and small will need to tighten up safety plans, increase the frequency of meetings and never get complacent.

As the future unfolds for us all, and we return ever-slowly to reality, the NBIS Risk Management team and our broker/agent partners are ready to assist you in navigating 2023 and beyond. For more information and details on risk solutions offered to our policyholders, visit www.NBIS.com or call 1-866-668-RMSS.