Construction technology, also known as ConTech, is poised for significant growth in 2019 as project margins face increasing pressure from trade tariffs and labor shortages prompt firms to look to tech-based solutions to solve them.
Strong U.S. economic fundamentals will drive further growth in the construction industry, which in 2018 recorded a 5.1% increase in total value according to JLL?s 2019 construction outlook.
Stable growth in the sector coupled with the rise in tariffs on steel and aluminum, concrete, lumber and others which collectively rose 5% last year and persistent labor shortage is laying fertile ground for the adoption of construction technology solutions, especially modular building.
Technology adoption in the construction sector by large general contracting firms picked up significantly throughout 2018, according to the report and is expected to trickle down regionally and reach higher levels in 2019.
The use of drones to monitor and survey construction sites was noted as one of the most commonly used ?ConTech solutions with 54% of general contracting firms already using drones and the largest national general contracting firms reporting 65% – an 11% higher rate of use.
Large general contracting firms also indicated that they are taking technologies that were previously earmarked for pilots and trials and rolling them out across projects in their portfolio as a means of differentiating themselves in an increasingly competitive marketplace.
Construction technology solutions aimed at providing solutions in modular building and building information modeling (BIM) will dominate, according to the report.
Use of modular construction units to expand in hospitality and healthcare
Nearly two-thirds or 67% of construction firms reported that they expect demand for modular units to increase over the next three years, and 24% of respondents indicated they expected it to remain the same.
Hospitality and healthcare sectors are expected to lead the adoption of modular construction components which offer contractors savings in labor costs and improved timelines.
However, modular construction still a nascent technology solution does pose risks.
The report noted cost savings from field labor from modular building components were lower than expected.
General contractors estimated labor savings from modular units to be between 5%-10%, however, most firms reported savings of between 0% to 5%. n addition, nearly 90% of contractors reported their modular construction process was either not effective or needed improvement.
Investment in BIM expected to grow
The industry is also expected to invest more heavily?in BIM technologies. A BIM is an intelligent 3D model-based process that gives architecture, engineering, and construction (AEC) professionals the insight and tools to more efficiently plan, design, construct and manage buildings and infrastructure.
By serving as a single point of unification for both design and planning BIMs serve as a link for various tech solutions to interface with one another and offers greater transparency, accountability and faster timelines.
The market penetration for BIM systems has steadily grown, with 46% of contractors reporting having in-house staff dedicated to BIM work.
Budgetary constraints and a lack of staffing and?remain the primary obstacles to the adoption of ConTech solutions with more than 40% percent of general contractors respondent siting these as primary inhibitors to testing new technologies.