Construction industries faces a lot of challenges and issues such as productivity, sustainability, profit margins, lack of skilled labors, use of technology etc. which are discussed in detail.
What are the Growth Prospects of Construction Industries?
Increase in the population will bring a huge future for the construction industry. It is being forecasted that the global population will be 9 billion by 2050. By this time majority of the population will be living in the cities. This will be the highest demand for construction yet to be faced.
The construction industry is one of the largest industry worldwide, that have to face different aspects of challenges and issues to maintain their significant growth.
With the increase in demand in the field of construction, there comes challenges in the area of performance, profit, productivity, sustainability, labor and the total industrial growth.
Top Challenges Faced by Construction Industry
The different aspect of challenges faced in the present era by the construction industry is mentioned. These aspects have the direct and indirect effect on the construction activity.
The challenges faced in the construction industry are:
- Lack of Productivity
- Lack of Skilled Labor
- Difference of Generations
- Challenges with adoption of technology
- Project Performance Challenges
- Issues with Sustainability
- Complexity of the Project
- Lack of Communication
- Unreliable Contractors
- Game of Blaming
Lack of Productivity in Construction Industry
The productivity of the construction industries over the past 50 years is remaining in a stagnant situation. The entry into a construction industry is not difficult that this marketplace is highly saturated at the current situation.
Competition is the main factor behind such saturation that will shrink the profit margin to a large extent. This stagnant situation will cause stagnant productivity.
The stagnant productivity is explained by a study as per Construction Owners Association of America (COAA) that for a mega-construction project, 63 % of the labor time is employed for waiting for the materials, traveling to the area, waiting for equipment, breaks, and works on planning to do the certain activity.
Hence the construction companies end up between the shrinking profit margins and the productivity stagnation without generating any appreciable profit.
Complexity of Construction Project
Each year the demand for the construction projects are increasing. This also brings new and complicated design which is a big challenge for the construction industry.
So, the construction firms must be choosy about the project they select. This is done by analyzing their regular pace of working and completion.
Committing too many projects brings difficulty in completion and the large loss. This results in dropping profit and prestige of the company easily form your hands.
Construction Project Performance
With the increase in the complex nature of the project, the opportunities for construction will grow. For companies that move in thin profit margins, it becomes difficult to keep up with the increase in complexity of the project.
As per the Accenture study conducted, only 30% of the largest projects in the industry are completed and delivered as per the budget signed. And the rate of projects that are completed on time is 15%.
The KPMG Global construction survey also estimated that almost half of the construction companies have faced at least one or two underperforming projects ( 2015 study).
Difference of Generations
According to a construction firm, the activities and the work environment is dynamic that new members enter the field each year. The ethics and the set of skills that is followed by a new generation will be very different from the past generations.
These differences existing in a construction firm may result in certain opinion conflicts and issues of communication gap.
Lack of Skilled Construction Labors
The construction industry has been undergoing continuous growth for the past few years and it is continuing to show the large growth in 2017. But the construction contractors have the remark that they find it difficult to get qualified workers and employees for doing specific construction works.
This is due to the misalignment that is raised between the number of skilled labors that are available and the number job available. This is one of the biggest issue faced at present.
This construction issue requires the organization or the construction company to spend and invest on training the people for required jobs along with a provision of additional pay.
Studies and opinions taken from the site engineers and the contractors say that the lack of having inexperienced labors and workers gives rise to huge safety issues.
Lack of Communication
Any issue or a problem faced in the construction industry due to some error or mistake is mainly due to the breakdown of the communication between the concerned parties of the project.
We are presently in an era where we have all sort of methods to undergo proper communication. If everybody in a project is communicated in and all about the project about the planning details, investigation details, doubts and clarifications, permission for work commencement, a huge issue due to a small error can be avoided easily.
Issues with Subcontractors
Whatever be the size of the project, there comes an issue with sub-contractors if the work is not delivered in proper hands. This is a big problem faced by most of the main contractors. The only advice to such issues is to study about the sub-contractor before the work delivery.
The opinion or suggestion about a sub-contractor can be asked to a manufacturing dealer or any other sub-contractor who you have worked with before or check the details and license of the sub-contractor and proceed with the work. It is very necessary to check whether the sub-contractor possess general liability insurance.
Adoption of New Technology
Development of new technologies has completely transformed the construction industry. As the competition increases, more workers and competing projects are attracted. Some of the essential construction technologies are the integrated collaboration, mobile project management, and the cloud-based software.
Special care has to be taken by the company while introducing the new technologies that it must not let down the workers who are working there in the traditional way.
So, the introduction and implementation of new methods and ideas have to done slowly and under a steady condition. This patience can help in attaining greater benefits and the blowback from the employees will be minimized.
This year and coming years will bring more of Building Information modeling, virtual reality, and laser scanning technology in the construction firms rapidly.
Now, these technologies are becoming economical and affordable by the construction firms. The initial investment of these is bit higher, but in long run, the company will save money.
Among all the industries, the construction industries are the greatest consumer of raw materials. The industry account for 20 to 40 % of the carbon emissions. This reveals that such a consumption of resources is not ought to be sustainable bringing the environment to great risk.
The main two challenges for the construction industry in the environmental point of view are the climatic changes and the water management. The construction industries mainly in China and India are facing a great challenge to reduce the carbon dioxide emissions to a safe level.
The method of smart planning and design based on sustainability will help in the reducing the energy consumption and the pollution caused to a large extent. But this will demand for a new approach in the field of project management.
Game of Blaming
We all know that the construction work is not always smooth and perfect. If a mistake is observed, many fingers will be pointing towards each other; i.e. contractors will blame the sub-contractors, the owner will blame the contractor, the engineer blames the owner etc.
Such situations must be faced by considering the builder’s risk policy. This type of insurance will help in covering the project and any principle works that is to be done on it.
The issues that can come under such policy is the building disruption due to environmental disasters or due to theft or vandalism.