How the Construction Industry is Growing
The U.S. construction industry has seen strong growth since the last recession, but how much exactly has it grown and is it sustainable in the long term? According to some experts in the construction industry, the real output of the market will reach nearly $1.2 trillion in 2020. A recent survey revealed that construction firms generated around $375 billion in contract revenue in 2017 alone, a 2.1% increase from the previous year. This growth is partly driven by massive updates to the United States’ aging infrastructure, but where else are construction companies driving innovation in the marketplace to reach such a high output? Below, we’ll cover some of the fastest-growing sectors in the construction industry and how technology is helping make this growth sustainable in the long term.
As the global economy becomes more reliant on an interconnected network of countries and businesses, the infrastructure supporting airports and trains are going to require continuous improvement. Most airports are around 40 years old, and with so much air traffic flowing into and out of major U.S. cities, there’s going to be an increased need to service more flights and transport more people.
Many airports are already in the process of expanding their terminals to do just that. For instance, New York’s LaGuardia airport currently handles eight million passengers a year, but it’s now undergoing a $4 billion renovation to handle 13 million. This trend isn’t specific to New York, either. Many states and major cities are seeking to expand and construct new terminals to handle higher demand. Expect this trend in the transportation sector to only continue rising in the coming decade as we rely more and more on a connected global network.
In fact, according to the estimates provided by the American Society of Civil Engineers, the U.S. requires $3.6 trillion by 2020 to repair, upgrade, and modify its aging transport infrastructure to keep up with population and economic growth. For commercial construction companies, that’s a lot of market opportunity in the U.S. alone.
Renewable Energy Sector
The renewable energy sector is a large market driven by both consumer interest and U.S. policies. More and more customers want to have sustainable energy solutions and control over how their energy is generated and consumed, and the government wants to add more renewable energy options to reduce the effects of climate change and help fuel us toward grid parity. In fact, the U.S. government has plans to make renewable energy account for 20% of the country’s total energy mix by 2020, and it seems that we’re on pace to meet this goal.
In some months, electricity generation is already surpassing coal, hitting up to 23% of energy production in 2019. Although we may not know until 2021 if we’ve hit this goal, it seems that we’re already on a great track to surpass this benchmark and continue diversifying the energy market in the U.S.
If you’re interested in renewable energy for the residential or commercial market, you only need to stop by your closest City Electric Supply branch. We’re here to help customers and businesses have more control over their energy — both in how they generate and consume it. We’ve created the Renewable Energies Group to help support residential consumers and commercial projects with renewable energy materials. Every branch is equipped to function as your one-stop shop for renewable energy projects, and we have a nationwide distribution network ready to supply you with what you need, when you need it.
Smart city projects are receiving hefty investments from companies like Microsoft and IBM, and overall repairs to declining infrastructure are already in place for many U.S. cities. As the construction industry embraces technology to help with these infrastructure improvements, an industry that has once been seen as a traditional field is now experiencing cutting-edge innovation to help drive growth.
We’ve already covered here some of the technology currently driving the electrical industry, and it’s safe to say that quite a few are already being used during the construction process. From building information modeling (BIM) to industrial automation, staying at the frontier of new technologies is now seen as common practice in construction.
By 2022, new construction is forecasted to reach over $1.53 trillion. Even though there is a shortage of homes on the market, a lot of growth near cities is driving this new construction. Because of this, it’s attracting a lot of homebuyers to metropolitan areas. The new homes are generally more expensive, but they are just starting their lifecycle and tend to be made with better materials and much more efficient utilities already in place. This is very attractive to homebuyers, and the addition of new homes creates a cycle. More housing options keep housing affordable, which in turn attracts more businesses, jobs, and residents.
The construction industry is not without its roadblocks, and two of the biggest ones include rising material cost and skilled labor shortages.
The rising material costs are a result of the construction industry’s high demand, and with tariffs still affecting steel production and trade, it’s having a ripple effect that may be felt for some time in construction.
The skilled labor shortage has been talked about quite often as the generation of baby boomers prepare to retire within the next five to 10 years. To make the construction industry more attractive to younger people, there has been an increase in funding for trade education to make sure this gap does not go unfilled. However, the training through trade education and apprenticeship programs is approaching a critical point.
The good news is that if the economy continues to stay on a stable trajectory, this booming industry will attract the workforce needed to complete the projects. Younger people — those in Gen Z particularly — may need to be recruited to consider the trades as a potential career option, but the myth that a college degree is required for a good job is no longer a commonly held belief. Attracting this younger talent is all about how the construction industry adapts its message to the younger generation. But if construction companies adapt to this new way of speaking to its younger audience just as they’ve adapted to the changing technology over the past several decades, they should have no problem filling the gaps in labor shortage.
Every City Electric Supply branch is equipped with the high-quality products you need for any construction project. No matter how large or small, commercial or residential, stop by any of our branches today to see how we can support you. From renewable energy solutions to energy-efficient LEDs for your home, CES has the quality products in-store or online to get you what you need, when you need it most.
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