You may have seen the headlines indicating that construction outlook for the year is looking really strong. We’ve covered it a couple times, even in infographic form.
A study by the Associated General Contractors of America (AGC) says that 75 percent of contractors want to increase headcount thanks to a favorable outlook in the construction industry. But more than half say they expect to struggle to fill those open positions, and more than 80 percent say that availability and cost of labor are their biggest concerns for the coming year.
Labor shortage is arguably the strongest headwind to new construction growth (especially as new lenders enter the game), adding extra time and costs to projects across the country. As a result, builders are struggling to complete projects on time to match demand.
For lenders, this can present a problem. Incomplete or delayed projects sit on the wrong side of a balance sheet. Even worse, outdated and inefficient administration processes can even exacerbate the issue. Without an accurate or real-time look into a project’s status, it can be difficult to see where money is sitting or being wasted. But technology can solve this side of the issue.
As spreadsheets age out as the preferred tool for loan and draw management administration, lenders now have access to real-time reporting on their loan status. They can get alerts when projects are stale or running behind, and they can move along draw requests in hours instead of days so that things stay moving on time.
Technology is even playing a role in easing the labor shortage by making construction work more desirable. Today, many workers have to travel frequently for on-site work -- something that turns many workers away from the profession. Soon, that may no longer be a requirement. Experts predict that in the future, only one-sixth of workers will have to visit job sites, while the rest will complete work in fabrication yards.
Let’s hope some of those advancements come quickly and help give energy to this current wave of new construction we so desperately need.