2021 was a trying year for the construction industry. It faced many challenges, mostly because of COVID-19 and its wider consequences. Workforce-related issues, supply problems and trouble sourcing materials all had a significant impact. Now though, the sector is looking forward to 2022 and banking on technology to save it. Read on to learn how.
The research was conducted by IoT Inspector in collaboration with CHIP magazine and the group focused specifically on models popular with home and small business users.
What challenges did the construction industry face in 2021?
The construction industry faced several challenges in 2021. These included:
Rising input prices
According to data collected by the Office for National Statistics (ONS), there had been more than 19 consecutive months of output price increases by October 2021, driving ever more demand for inputs. Iron ore costs, for instance, were up by more than 97 per cent in the summer, compared to pre-pandemic levels, and timber even higher.
The rising cost of inputs, in turn, affected the cost of projects. Thanks to price increases, the total cost to build the average home is now around 10 per cent higher than it was before the pandemic struck.
Supply chain disruptions
2021 also saw the peak of supply chain disruptions as global logistics companies struggled to clear backlogged orders from shutdowns in 2020. Companies had to shift how they worked to accommodate social distancing, making it more difficult for workers to be in the office. Lost productivity made it more challenging to process orders, even if factories were still open, leading to shortages on construction sites.
Severe weather conditions also affected supply chains in some parts of the world. Bad weather in the western Pacific, Gulf of Mexico and mid-Atlantic worsened existing supply bottlenecks sporadically throughout 2021. Then there was the ship that got wedged in the Suez Canal, compounding the problem and preventing the flow of goods valued at more than £300 million for six days.
Workforce shortages
While the construction industry had been battling workforce shortages for years, the furlough scheme and social distancing made it harder than ever to fill all available job site positions. According to Construction News, demand for workers in 2021 hit a 20-year high, but ONS figures show that official employment in the sector was actually 100,000 people lower than in 2020, putting upward pressure on wages. Because of this, Mace suggested that wages would reverse from a 2 per cent decrease to a 1 per cent increase this year, reflecting the current mismatch between supply and demand.
To compound the problem, the workforce is also ageing. According to Construction Week, over 50s now comprise more than a third of total workers in the sector. Recruits are joining at a slower rate than retirees are leaving in some firms.
How the construction industry is working to solve these challenges
While 2021 was a tough year, the construction industry is finding ways to fight back. Demand is at record levels, making it the perfect time for investment in new solutions.
Dealing with inventory issues is going to be challenging. In the UK, supply issues reached their zenith in May 2021 and, since then, construction companies have been facing long lead times and high competition for raw materials from other firms. Thus, in the future, firms may look to stockpile necessary supplies to accommodate future disruptions or work with multiple partners around the world to ensure multiple supply routes.
Technology is also going to play a vital role. Owing to higher uncertainty, firms need it more today than ever before.
Historically, construction firms were slow to adopt new technology. The sector tended to lag behind the rest of the economy because of the lack of tech-savvy employees in the industry. However, thanks to the pandemic, that may all be about to change. Around three-quarters of construction firms now use cloud technology to assist their operations.
Cloud data offers a host of benefits. For starters, employees can access it anywhere with an internet connection. That means that worksite managers may be able to work remotely, helping to limit the number of people on-site in the event of future coronavirus-related restrictions.
Construction firms may also implement remote site monitoring using internet-connected, smart security cameras. Managers could keep an eye on on-site employees and give them directions, without having to be physically present. The same cameras for supervising employees could also detect intruders. Empty construction sites are a major target for thieves and squatters. CCTV with motion detectors could immediately alert monitoring personnel, allowing them to intervene where necessary.
Construction companies will try to adopt new materials in 2022 to reduce their construction costs and combat current input price inflation. Good examples include transparent aluminium, flexible concrete and self-healing concrete, as well as sourcing materials more locally.
We may also see the rise of modularity. Instead of constructing buildings from individual components on-site, the majority of the fabrication may occur elsewhere in the future. All that on-site staff need to do is fit all of the pieces together, a bit like a jigsaw puzzle. This approach will improve productivity per worker, reducing the current labour shortage issues while also mitigating rising input prices.
Analysts expect operational digitalisation to play a bigger role in 2022 as well. Cloud-based construction software, for instance, is enabling better workflow, communication, collaboration and document tracking. Many sites will use such software to connect on-site and in-office teams more effectively, and in real-time. Greater supply chain oversight will also enable construction firms to anticipate potential shortages before they arise.
Lastly, we may see the use of drones, robots and AI to counteract the current labour and skills shortage. Drone usage, for instance, increased more than 200 per cent since 2020, allowing construction sites to better monitor their operations (reducing the required human input). Robots are also making progress, with companies prototyping machines that can handle repetitive tasks while reducing the risk of injury. Tasks they can perform include painting, loading, rebar tying and drywall installation.
Therefore, 2022 will see efforts to mitigate the issues faced by the construction sector in 2021. In all likelihood, the challenges of the past year will accelerate innovations that were already underway.
