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Navigating the 2024 Construction Season: Challenges and Strategies

By Compass Group on Nov 20, 2023

The construction industry, like many others, is no stranger to adversity. From economic downturns to supply chain woes, we've seen it all. As we gear up for the 2024 construction season, it's crucial to acknowledge and prepare for the challenges that lie ahead. Let's dive into the current landscape and explore strategies to ensure a successful year.

Current Challenges in Construction

1. Labor Shortages:

The demand for skilled construction workers is soaring, yet the supply is dwindling. In fact, a staggering 91% of contractors reported difficulty filling positions. To meet production demands in 2023 and 2024, an estimated 546,000 additional workers are needed. As an individual contractor, addressing this labor shortage may involve raising wages, improving work culture, and providing training opportunities to upskill your existing workforce.

2. Supply Chain Issues:

The shadow of supply chain disruptions cast by the COVID-19 pandemic still looms large. These bottlenecks are likely to hit the construction industry hard as the spring season picks up.
The Build America, Buy America Act further complicates matters, necessitating more purchases of U.S.-made materials. To mitigate the impact of material lead times, consider ordering materials well in advance. Additionally, safeguard your materials with security measures like cameras, proper storage, and employee training to reduce losses.

3. Inflation and Material Costs:

Inflation has taken a toll on construction. Construction input prices have surged by 37.7% since 2020, with a 4.9% increase in the past year. While materials like lumber have seen price reductions, others have surged. Concrete products, for instance, are now 14.8% more expensive than the previous year. To navigate these costs, contractors may need to purchase materials despite high prices or delay project starts. Protect your assets from theft, vandalism, and damage by investing in site cameras and robust insurance coverage.

Succeeding Amidst Challenges

Facing difficulties head-on requires the right strategies. Here are some approaches to consider:

1. Stay in the know

Knowledge is power. Keep up with industry trends, concerns, and downturns. Stay informed by reading construction-related articles, reports, and newsletters. Follow industry leaders and organizations like Associated Builders and Contractors and the Associated General Contractors of America.

2. Plan for challenges.

Expect the unexpected. Given the state of the supply chain, even diligent contractors may face part shortages and delays. To mitigate these setbacks, place orders early, develop contingency plans, and explore backup vendors and subcontractors.

3. Focus on your team

Your projects depend on your workforce. Attracting and retaining skilled employees should be a top priority. Offer competitive pay, foster diversity and inclusion, participate in job fairs, and create a supportive work culture. Consider incentivizing continued education to bridge the skilled labor gap.

4. Prevent losses and protect investments.

Protect your investments. With materials and resources at a premium, preventing losses is paramount. Invest in insurance reward programs that support security measures like site cameras. These cameras not only enhance safety but also deter theft and document incidents for insurance purposes.

The construction industry and its dedicated contractors have proven resilience. By staying ahead of challenges, working collaboratively, cutting costs, and maintaining hope for the future, the industry is poised to emerge even stronger. The 2024 construction season may be challenging, but with strategic planning and adaptability, success is within reach.

If you are looking to get started on a commercial construction project in 2024, contact us today! Compass Group aims to bring our customers’ visions and goals into reality by providing high- quality development and construction services with integrity and an uncompromising commitment to excellence and customer satisfaction. For more information on the services we provide and to view our portfolio, visit https://www.compassgrp.com/.

Photo by Mikael Blomkvist

Topics: construction industry