8 construction trends to watch in 2018

After a robust 2017, commercial construction companies are anticipating an even stronger 2018, with the majority reporting they plan to expand their staffs, according to Dodge Data & Analytics.

As professionals seek to map out 2018 and beyond, there are a number of trends shaping the construction industry. Some are evolutions of past years, such as offsite construction and an increasing reliance on technology, and some trends are new, such as a focus on resiliency after the most damaging hurricane season on record and devastating fires in California.

Other trends that will shape construction revolve around policy, both federal and state, the ongoing labor shortage and gargantuan projects, including Amazon’s much-anticipated HQ2.

Read on for our list of the top eight trends to monitor this year.

Resiliency takes center stage

Resiliency is set to be one of the construction industry's watchwords for 2018 after last year’s onslaught of hurricanes, heat waves, cold waves, flooding, tornadoes and wildfires. Property owners took a total financial hit that is still climbing and could reach nearly $400 billion, according to Vox.

Rather than throwing up duplicate replacement structures, more owners will likely heed the call of organizations like the U.S. Green Building Council and demand resilient site and structure features. The USGBC in November announced it would adopt construction standard RELi, which awards points for resilient features such as adaptive design for extreme weather events and their resulting hazards, communications and first-aid resources.

The Trump administration also used last year's natural disasters to underscore how important building for resiliency is by declaring November 2017 as Critical Infrastructure Security and Resilience Month. The administration's proclamation was intended to highlight how important it is to keep vital infrastructure up and running — no matter the weather or other extreme conditions — for national security purposes.

In the coming year, the industry may see more resilient projects mimic those already underway, like the raising of streets in Miami Beach or the building of earthquake-resistant skyscrapers sans rebar in California. Certainly architects, engineers and contractors will be critical to rebuilding efforts, but business as usual could be a thing of the past.

Short on labor — still

The construction industry will continue to contend with a limited supply of skilled craft workers. Officials in various parts of the country have used words like "dire" and "scary" to describe the availability of qualified labor as younger individuals resist construction as a career option and more baby boomers retire. The Associated General Contractors of America (AGC) reported in December that November construction employment increased to its highest level since the same month in 2008, but that this has resulted in a smaller pool of candidates, likely constraining future hiring efforts.

Industry groups like the AGC and the Associated Builders and Contractors (ABC) have for years lobbied lawmakers for increased federal, state and local funding for trade school, high school and middle school trade education programs as a way to help create a construction industry labor pipeline, and those efforts could pay off and help ease the problem.

Meanwhile, the industry is turning to alternative construction methods to make up for the short supply of workers. Offsite construction and prefabrication, for example, are helping contractors sidestep some labor issues. Gaston Electrical principal Bill Weber told Construction Dive in June that prefabricating MEP racks — 20- to 30-foot panels that are pre-fitted with ductwork, piping and raceways — allow MEP contractors to make their final connections more quickly on the jobsite and require up to 50% less labor.

Along those same lines, increased use of modular construction in 2018 and beyond could also reduce the need for additional workers. Its use has taken off in the hotel and multifamily sectors, and, according to Lad Dawson, founder and former CEO of Guerdon Modular Buildings, in Boise, ID, offsite construction can absorb up to 60% of a project's labor requirements.

Offsite construction on the rise

For much of 2017, offsite construction and investment in the delivery method was a key trend. Offsite startups like Katerra and FullStack snagged millions in funding, while a growing number of U.S. contractors partnered with prefab companies to fold the method into their operations.

"With companies like Google, Marriott, Starbucks and other high-tech firms like Autodesk embracing offsite, there is a ton of investment money looking to revolutionize the construction industry," Tom Hardiman, executive director of the Modular Building Institute, told Construction Dive in October. "It's going to change so fast in the next year."

Increased pressure from supply-side challenges and a growing need to jumpstart productivity will continue to drive offsite into the mainstream. Traditional contractors’ desire to increase project efficiency with offsite components is opening the door to greater collaboration between general contractors and offsite fabricators. Less than a decade ago, many projects were modular or conventional, Hardiman said.

Today, many are a hybrid of the two. And with larger companies like Turner Construction and Gilbane adding project manager roles for offsite to their payrolls, the delivery method only stands to build momentum.

Suppliers, too, are building up their operations with the segment in mind. Until recently, many had not created product lines specifically for offsite. Now, suppliers like Tremco are developing lines for the market to help streamline operations.

But perhaps one of the biggest disruptors in offsite’s expansion will be Marriott International’s use of the method. The hotel chain plans to add seven offsite manufacturers to its existing lineup this year, and will do so while developing a set of goals to compare offsite projects against their site-built equivalents.

Investment up for public transportation

Former transportation secretary under President Barack Obama, Anthony R. Foxx, talked at Autodesk University in November about the state of infrastructure in the U.S. He said that focus now is on integrating existing infrastructure because end-to-end systems already are in place. “We can’t look at modes of transportation as separate an distinct anymore,” he said. “It’s all one whole.”

Nashville, TN’s, ambitious $5.2 billion infrastructure and transit plan, which citizens will vote on in May, is just one example of cities making big investments in transportation. The plan would not only link parts of the city to each other, but better connect it with surrounding Davidson County communities.

Although Nashville’s proposed plan is among the largest, it isn’t the only notable project underway. Minneapolis’s $1.9 billion Southwest light-rail has encountered a slew of obstacles, largely relating to financing. Nevertheless, the Metropolitan Council expects to award the contract in the first quarter of this year, with construction commencing in the spring. Boston’s Green Line light rail is undergoing a $2.2 billion reboot, which will add 4.7 miles and seven stations to the system between Cambridge and Medford, MA.

Beyond traditional rail and bus systems, the country is exploring higher tech options, such as high-speed maglev trains and hyperloop systems, several tunnels of that have been okayed in Maryland and California.

Technology and automation tackling jobs

At Autodesk University in November, Autodesk CEO Andrew Anagnost grabbed the automation bull by the horns, saying, “Instead of worrying about automation taking our jobs, let’s have a conversation about where automation can take us.”

Look at 3-D printing. In the final quarter of 2017 alone, the industry boasted several innovative projects, such as Europe’s first 3-D printed building built in Denmark, a 3-D printed concrete bridge in the Netherlands and the issuing of a grant to 3-D print concrete turbine towers in California.

Machines also are tackling jobs that are traditionally dangerous for humans, such as the tele-operated humanoid robot RoboMiner going into pit mines. A Pittsburgh-area robot ties rebar to form bridge decks, which halves labor hours compared human labor, as well as reduces injuries workers sustain while straddling rebar frames.

Construction tech earned the distinction as Trend of the Year in the 2017 Construction Dive Awards. The industry saw $433 million of funding in the first nine months of 2017 alone. Out of the 56 total deals, two of them were valued at more than $50 million. One of those large deals was Innovator of the Year, Katerra, which uses factory-based construction to automate and standardize design and construction to create a continuum of services to replace the typical chain of handoffs.

New policy regulation impacting businesses

The House and Senate approving President Donald Trump’s tax overhaul capped 2017. Although not construction-specific, it certainly will have a significant impact on businesses. The public construction sector will benefit from private-activity bond (PAB) financing and contractors structured as C-corporations and pass-through entities will benefit from tax relief. PAB use, however, may limit and lock out design professionals from taking advantage of the new lower pass-through tax rate.

Beyond federal policy shaping the industry, some cities, states and agencies are passing regulation as well. New York City Mayor Bill de Blasio in October signed Intro 1447, a controversial law that requires construction workers to undergo at least 40 hours of safety training.

California Governor Jerry Brown signed a law in October requiring contractors acting as direct contractors on private construction projects to be financially responsible for any wages, fringe benefits and union contributions left unpaid by subcontractors and their sub-tiers. Los Angeles also kicked off its seismic retrofit program by sending notices to owners of an estimated 1,200 older concrete buildings that fall under the new ordinance.

Many also will be keeping an eye on the infrastructure bill, which may be revealed later this month, and has the potential to put up to $1 trillion into the pipeline. Several companies have engaged in large acquisitions, such as Jacobs Engineering Group acquiring CH2M Hill and AECOM’s acquisition of Shimmick Construction, in preparation to take full advantage of the anticipated work.

Giant companies expanding spaces

While last year saw the addition of new high-tech campus facilities from the likes of Google and Apple, 2017’s hype around a second new North American Amazon headquarters will likely fuel increased momentum for similar expansions in 2018.

Software giant Microsoft is slated to begin a multi-billion-dollar redevelopment of its existing Redmond, WA, campus later this year, joining Apple, Google and other tech giants that are expanding their capacities “at home.” Meanwhile, companies like Marriott and General Electric are expected to break ground on new headquarters developments.

As more firms continue to build out their facilities, many are also likely to add infrastructure needed to support their operations. Data center construction, especially, is taking off as companies increasingly amass unprecedented amounts of information in their servers.

By the first half of 2017, data center investments had already doubled those made in 2016, coming in at $18.2 billion. And if the market maintains that pace, investments in the category this year could exceed the combined total of the past three years.

“Driving the market will be companies you’ve never heard of doing things we can hardly imagine,” Todd Smith, chief technology officer of data center solutions at national commercial real estate firm Transwestern, told Construction Dive in November.

AR/VR, wearables and drones transforming jobsites

In the face of mixed-reality headsets, such as Microsoft’s HoloLens, and wearable devices, such as Triax’s Internet of Things-enabled sensors, it’s a safe bet that high-tech wearables and augmented and virtual reality will continue to infiltrate jobsites. Two of the greatest benefits these technologies offer are safety and efficiency — both areas where the construction industry tends to struggle.

Beyond the innovations and investment in con-tech, it’s also possible that technology will help recruit younger workers into a field plagued by a labor shortage. Garrett Harley, vice president of strategic accounts for Aconex, told Construction Dive that “Technology is another emerging way to get people into this business. Not many people coming out of school understand there’s this much tech in construction. It’s an exciting time to be a part of it.” These technologies include gamify safety training courses, which can improve learners’ engagement and retention rates.

Construction is a notoriously dangerous profession — construction worker fatalities increased 6% from 2015 to 2016 — and these technologies can be a major boon to increasing safety. Although wearables are slow to be adopted, according to the report Safety Management in the Construction Industry, 82% of adopters say they have a positive impact. Meanwhile, more contractors are looking to drones to survey sites and improve upon worker safety as well.