Our own Bud LaRosa shared some insight and optimism with High Profile on the construction industry as a whole, but also in our particular area, Boston, Massachusetts.
The New Year is here! With it, comes our annual opportunity to start anew. Looking ahead to 2014, many constructors are feeling more optimistic than they have since 2008. As the construction industry looks toward 2014, there are certain factors that will shape and impact the industry.
Multiunit housing, assisted living, and hospitality opportunities are abundant through the northeast and mid-Atlantic. According to the National Association of Homebuilders1, multifamily new building permits increased by 37% in the Northeast, 36% in Ocean City, NJ, and 24% in Pennsylvania.
In Massachusetts, particularly Boston, the construction industry is once again growing with increases in areas such as biotech, life sciences and healthcare. In Cambridge, MA, biotech and life sciences rule the roost. According to a 2013 Boston Globe article, Cambridge has about 3.4 million square feet either under construction or in planning – the majority of which will be occupied by biotech or life sciences companies. Boston’s Seaport district is also undergoing dramatic changes, with currently 23 acres under construction or close to starting. Area hospitals continue to build and remodel, including Longwood Medical, Boston Medical Center and Massachusetts General Hospital.
Delivery methods are changing as many companies have started embracing lean construction and Integrated Project Delivery (IPD). Companies are beginning to combine lean, IPD and other collaborative methods to better align business interests of all parties.
At Tocci, we have developed Highly Collaborative Project Delivery (HCPDTM) for clients that aren’t quite ready for IPD, but are frustrated with the status quo. HCPDTM bridges IPD’s incentive clauses and collaborative style with more conventional contractual agreements. Look for these delivery trends to continue in 2014 with complex healthcare and pharmaceuticals projects leading the way.
Building Information Modeling (BIM) will continue to become the standard work process for designers and contractors. BIM users are moving toward higher end capabilities such as modeling safety exposures and protection, improving installation sequencing operations, and identifying opportunities for design optimization. More sophisticated users are starting to tie the model to billing for example: color coding what has been paid, not paid and needs to be completed. These advancements will gain wider adoption and spawn even more complex capabilities.
Additionally, more companies will move to the cloud, which allows contractors to seamlessly share files of any size with virtually unlimited power. Cloud based solutions will help increase collaboration among teams and will improve efficiencies. The collaboration needed to deliver projects through IPD or HCPDTM will also help facilitate the move to the cloud.
Acquiring skilled labor is going to be an issue in 2014. After 2008, a lot of skilled workers left the construction industry to find other employment and will likely not return.
Companies need to combat this skills shortage with creative ways to both retain existing employees and train their new staff. Many companies are starting to implement mentoring programs to start transferring knowledge from those with 30+ years of experience to green employees.
Tocci uses Individual Development Programs (IDP) to work with each employee on his or her professional development goals. Other companies are implementing sabbaticals, wellness programs, or professional coaching to help with employee retention. It has been shown that positive company culture and employee appreciation are top factors that contribute to employee happiness.
Prefabrication has been happening for years – especially with mechanical and electrical trades. What’s different now is the transition from prefabrication to multi-trade componentization and modular construction. Driving this is more collaborative delivery systems, including IPD, HCPDTM, and various forms of design-build. None of this could happen efficiently without BIM – which allows greater coordination of design with construction.
The biggest driver is that modular saves time. Modular helps end users bring their projects online substantially faster. Modularization will also help address the impending skilled labor shortage.
Repetitive design projects such as multiunit, hotels, and hospital rooms are the likely candidates in the near term. As traction builds other industry segments will follow.
As the construction industry moves into 2014, we will be exposed to a lot of new opportunities and challenges. What we do to prepare for these opportunities will help determine our success throughout the year. All in all, 2014 promises to be a good year for the industry.
Click to check out “What Does ‘Home In A Day’ Mean for Our Industry?”
Click to check out “Take Five with Mark Herstein“