Tag Archive for 'CONEXPO-CON/AGG.'

Forecast For 2020 Is Definitely Not 20/20

By Greg Sitek

Forecasting usually uses a crystal ball for an all-inclusive overview, or a telescope for a long-range view, or a microscope for a finite, specific pinpoint view.

For 2020 a kaleidoscope is probably the correct instrument to use since forecasting anything with respect to the coming year is a virtual impossibility. Typically, there is the “what if” factor that points predictions in one direction or another. For 2020 there are more “what if” factors that stable ones.

Making predictions for the coming year are like shooting the ball in a pinball machine – you just don’t know where it’s going to go, what obstacles it’s going to hit, which direction it’s going to be forced into traveling. 

However, for the construction industries, there are a couple of certainties that will remain constant. For Example, March 10 through 14 ConExpo will be held in Las Vegas, Nevada and will be the biggest construction show ever with 2,800 exhibitors, 2,500,000 square feet and 150 education sessions.  

For our industries this is where I stop with the predictions. There are numerous bills, proposals, agreements, treaties, etc. waiting to be reviewed, revised, rewritten in and before congress waiting for congressional action all of which will have an impact not only on construction but our entire economy. 

According to Dodge Outlook Report we can expect an economic slowdown that will affect total construction growth.

Dodge Data & Analytics released its 2020 Dodge Construction Outlook, a mainstay in construction industry forecasting and business planning. The report predicts that total U.S. construction starts will slip to $776 billion in 2020, a decline of 4% from the 2019 estimated level of activity.

“The recovery in construction starts that began during 2010 in the aftermath of the Great Recession is coming to an end,” stated Richard Branch, Chief Economist for Dodge Data & Analytics. “Easing economic growth driven by mounting trade tensions and lack of skilled labor will lead to a broad based, but orderly pullback in construction starts in 2020. After increasing 3% in 2018 construction starts dipped an estimated 1% in 2019 and will fall 4% in 2020.”

“Next year, however, will not be a repeat of what the construction industry endured during the Great Recession. Economic growth is slowing but is not anticipated to contract next year. Construction starts, therefore, will decline but the level of activity will remain close to recent highs. By major construction sector, the dollar value of starts for residential buildings will be down 6%, while starts for both nonresidential buildings and non-building construction will drop 3%.”

In Contrast, AEM’s 2020 Outlook for Construction predicts “Steady and solid growth is likely to continue for the construction sector. As the second-largest in the world (behind China), the U.S. construction market is poised for 3.3 percent growth this year, 1.7 percent growth in 2020, and somewhere between 1.5 and 2 percent growth for the next five years. Residential construction remains a strong driver – it represents about 40 percent of the total market and, in the last four years, it’s seen double-digit growth. However, as of late, growth has slowed considerably.

“A lot of the optimism we saw in 2017 and 2018 seems to have evaporated,” said AEM Director of Market Intelligence Benjamin Duyck. “There really is no consensus to what the future truly holds.”

Tariffs are playing a role in the uncertainty, as is the need for a new comprehensive infrastructure package.

“Both political parties discuss this quite a bit, but nothing has materialized so far,” said Duyck. “It’s now expected for 2021 – and hopefully it comes soon, as most of the infrastructure spending, we see today occurs at the state and local level.”

“While the outlook for construction remains positive, enough factors are having a negative impact that uncertainty is still pervasive for the time being.”

AEM’s bottom line – “2019 has been a solid year for the economy overall, as well as the ag and construction sectors. A number of factors – global trade wars and protectionism being chief among them – are leading to increased concern that a recession is right around the corner. And while that likely isn’t the case, it’s not unreasonable to suggest one may arrive by 2021.”

Another certainty, there is an election scheduled for November 3, 2020 and there is more on what to expect in the January issues of the ACP magazines. We do have some excellent forecasts for you.

4 Things Contractors Need to Understand About Innovation

Attend the education session “Driving New Innovation at Complacent Companies” on Thursday, March 12, from 3:00 p.m. to 4:00 p.m. at CONEXPO-CON/AGG. 

REGISTER NOW

Moving from where you are as a contractor to where you want to be takes more than what-worked-before thinking. Past successes may no longer be reliable because the game is changing. The little guy can compete in a way never thought of before. Contractors can use their human and technology resources to move from status quo to innovation, from being disrupted by other companies to becoming the disrupter.

LEVEL THE PLAYING FIELD

“Technology is the great equalizer,” says James Benham, CEO and founder of JBKnowledge, a technology solutions company serving the construction and insurance industries. “It’s far cheaper, faster and better than years ago.”

Benham has seen small contractors successfully compete with much larger companies, and enterprise level companies become more productive and efficient by embracing change. He is aware that eight out 10 contractors struggle with technology. “They may have adopted a technology 15 years ago and are still hanging their hat on that. They may not realize there is a subset of companies that have upset the game.” Such tech-savvy companies are winning projects while others are being disqualified because they lack the technical capabilities to successfully bid on a job. 

Common technical capabilities currently in use include BIM (Building Information Modeling) and productivity trackers. BIM is a strategy tool that can be used during bidding, preconstruction, active construction, and facility management. “It offers massive gains and significant reduction in preventable mistakes,” Benham says. Another important strategy tool focuses on productivity tracking. “We’re in the labor business in construction. Tracking and improving productivity eliminates waste and improves efficiency,” he says. An electrical subcontractor he worked with reached an on-site productivity level above 68 percent, significantly higher than the construction industry average of 40 percent.

GIVE THE RIGHT PEOPLE THE RIGHT TOOLS

Technology won’t put you in a winning position without people who can implement it in a smart way. If you want to innovate give the improvisers, the tinkerers, and those willing to experiment a forum to express their ideas. Along with the right tools, they can move the company forward. How can innovators be supported through funding as well as verbal and emotional support? “These are questions contractors may not have thought to ask but they are important to becoming an innovative company,” says Benham.

MITIGATE RISK

Change involves risk. Many construction companies are hesitant to adapt and innovate. Such caution is understandable. It is wise to start small, build up profit margin, and not get distracted by options. Focus on processes and methods. “Technology enforces and institutes processes that benefit the bottom line,” Benham says. Methods mean nothing if they can’t be measured. Learn best practices for measuring results of innovation. “If you don’t measure, you can’t see the impact. Documenting an existing state and a future state is critical. People are quick to forget things,” he says.

With many people retiring from the construction industry, vast knowledge and experience could be lost. Curious, innovative thinkers can find solutions that will retain and build upon that knowledge. Documenting existing processes will help the next person avoid confusion. They will have a playbook.

LOOK TO THE FUTURE

It is necessary to stay informed about current innovations in technology, how best practices change, and what lies ahead. There are a multitude of blogs, industry magazines, videos and podcasts to choose from. Know where you can find the top choices for construction software and mobile apps.      

As an adjunct professor in construction science at Texas A&M, Benham is closely connected to the next generation entering the construction industry. “My students are passionate about building. They want to work with technology they use every day — phones, tablets, virtual reality. They insist it be in their work environment as well.” 

James Benham will be presenting a session on Driving New Innovation at Complacent Companies during CONEXPO-CON/AGG 2020 in Las Vegas. He will share ideas and best practices in Ballroom A on Thursday, March 12th from 3 p.m. to 4 p.m. Benham will encourage attendees to focus on budgeting, staffing and starting to experiment. Contractors who are curious and interested in technology, who are passionate or want to innovate, should attend. 

4 Steps Before Deciding What Works Best for You

Editor’s Note: When a new technology is introduced to the market, you can’t help but think, “will this give me a competitive advantage?” Unfortunately, the answer won’t come from the sales person or tech expert you’re contacting.  Only you can determine whether a technology is the right solution for the challenges you face.

Tauhira Ali, senior manager of construction technology at Milwaukee Tool is speaking about this very situation at CONEXPO-CON/AGG in March. She says that your competitive advantage does lie within construction technology, but there are certain steps you have to take in order to tap into this advantage. If you would like more information about Tauhira or her session, please feel free to reach out.

Attend the education session “Gain a Competitive Advantage Through Construction Technology” on Wednesday, March 11, 2020 from 11:00 a.m. – 12:30 p.m. at CONEXPO-CON/AGG. Register now

It happens more and more now. A new technology is introduced to the market and you think, “Will this give me a competitive advantage?” The answer won’t come from a salesperson, tech expert or trade magazine. Only you can determine whether a technology is the right solution for the challenges you face. Here are some steps to take before investing resources in technology that you think will give you a competitive advantage.

1. IDENTIFY THE PROBLEM

“Before you can solve a problem, you need to identify it,” says Tauhira Ali, Senior Manager of Construction Technology at Milwaukee Tool. What are the strengths and weaknesses of your  current workflow and how will this change in the future? How do your processes compare with the competitive environment you’re working in?

Chances are that your challenge doesn’t exist in a silo so don’t keep your problem-solving effort in one either. Is it a process challenge? Equipment management? Productivity? Safety? Ali suggests empowering employees to better understand innovation and share their insights.  In that way you are more likely to find solutions that employees want to work with. “Focus on people and tasks. Know who you are and what you need,” she says.

2. INVESTIGATE

After you’ve identified the problem, start investigating. Technology solutions are rarely bought off the shelf these days. You need to get educated on products and solutions. Fortunately, there are many sources of information on the Internet including articles, podcasts, videos. “Find the leading suppliers in your market and invite them to help you solve your particular problem. Be vocal about what you want,” Ali says. “You are the customer, explain your needs. Tell them what your deal breakers are. While you are learning from them, they are learning from you.”  

Construction technology startup companies received $1.05 billion in investment from venture capitalists in the first half of 2018, a record high. Startups and well established companies can introduce you to something you are unaware of such as wearables to improve safety or the latest in drone technology. Convey your high standards and insist the provider you work with share or exceed that standard.

3. FIND THE OPPORTUNITY

Assess the benefits of any solution suggested. Does it fit within your existing processes? Does it offer a more efficient process? What gains will you see and when? Can you test it on a small scale before implementing something more robust? Again, know who you are and establish a process that works.

Investment in technology can bring unforeseen advantages. It can make talent recruitment easier, bringing in skilled people who use data to assist with in-house and on-site decision making. The best people are attracted to companies that are innovating and outpacing their competitors. They see growth opportunities for their careers. Ali previously created technology solutions and assessed business viability for products and platforms in the automotive and aerospace industries before joining Milwaukee Tool. “The construction industry is so ripe for innovation today and in the future of how we build,” she says.

4. PREPARE TO IMPLEMENT

Clean your house. New technology will work better within a strong foundation. That means documented processes, streamlined tasks, proven methods, and vision. It doesn’t need to be complicated, just clearly communicate how work is done and why. Define what success looks like so your progress can be measured. Be flexible. Pivot when necessary.

Market trend reports can help in assessing competition but don’t forget the value of peer groups who are not competitors. “Face-to-face communication at association meetings and trade conferences is always valuable,” says Ali.