Crews have started the complicated work of cleaning up the site of the Francis Scott Key Bridge’s deadly collapse into the Patapsco River. Central to that effort are barge-mounted cranes, which are being used to pull steel and concrete up from the depths.

Last week the U.S. Navy released underwater images of the collapsed span, which show the magnitude of the job salvage workers face. First, there will be an overall assessment of the wreckage, then the bridge will be cut apart and lifted section by section onto barges and transported away.

This type of operation entails complicated physics and coordination, according to Jeff Ellis, director of field operations for Crane Tech, a Brandon, Florida-based crane services and training provider.

“This is one of those cases where we have to take time to do it right the first time,” said Ellis, who is not involved in the Key Bridge effort, but has experience in water salvage operations. “It’s just so much easier, so much less costly, so much safer to do it correctly.”

The U.S. Army Corps of Engineers released an updated timeline Thursday to clear a 280-foot wide, 35-foot deep channel by the end of April, and to reopen the permanent, 700-foot wide, 50-foot deep channel by the end of May. However, poor visibility in the murky water has hampered the diving efforts around the bridge structure, according to Maryland Gov. Wes Moore.

Helping with cleanup is The Chesapeake or “Chessy,” a 1,000-ton lift capacity derrick barge and the largest crane on the East Coast that was once used by the CIA.

Also supporting the operation are the Ferrell, a 200-ton lift capacity revolving crane barge; the Oyster Bay, a 150-ton lift capacity crane barge; and another 400-ton lift capacity barge, per a Navy news release, along with an additional 12 crane and support vessels including tugs, survey, dive and crew boats.

Here, Ellis speaks with Construction Dive as he breaks down the process and challenges of retrieving the wreckage of the Key Bridge.

Editor’s note: This interview has been edited for clarity and brevity.

CONSTRUCTION DIVE: Can you tell us what the recovery process will likely entail?

JEFF ELLIS: When they start doing a salvage on the bridge, they need to get the parts and pieces that have collapsed into the water out, without causing any further damage. If part of the cantilever section is laying across the ship, where they pick it up or where they cut it might have an adverse effect and cause another part to go deeper into the water.

Somebody’s gotta be the adult supervision and say, “We need to take this piece out first, it’s going to weigh about this much,” and plan for that pick and then go to pick number two. It’s going to be a thought-out process.

And while getting these pieces up out of the water and clearing the waterway, they are trying to minimize damage to the ship, which has already been damaged quite a bit. 

What are some of the challenges in pulling pieces of the bridge out of the water?

The weight of something in the water is going to change dramatically with the current pulling on top and sideways, possibly the wind, and the buoyancy. You could also have the suction of mud in there.

So they need to know what it weighs, because they’re not going to be able to measure that as they’re bringing it up. They’re going to have to be pretty exact and put in whatever the margin of error they believe it’s going to be, probably about 10%.

They’re going to ensure that the part they’re trying to pick up is well within the capacity of the crane when it leaves the water, not to get it up out of the water and then no longer be able to handle it, which has happened in the past. It’s really an engineering nightmare.

How is using barge-mounted cranes different from ones on land?

Whenever you take a barge and add a crane to it, a marine engineer will ensure that the center of gravity is going to be well below the center of buoyancy, so as you pick up a load it’s not going to capsize the entire unit. The capacity of it is going to vary with the angle, what they call the list and trim on a barge. 

It will lean with the weight added to it, because your boom on that crane is actually like a Johnson bar lever as it deflects in the water. And the more it’s out of level, the less you’re going to be able to pick, the less capacity you’re going to have.

There’ll be a list and trim indicator telling them what the moment of physics is, then you’re going to have a chart corresponding to that moment of physics showing what the reduced capacity of the crane is.

Also, once it clears the water and you lose that buoyancy, then its actual weight is going to be taking effect on the crane. The last thing you want to do is compound your problem by having an accident on top of this accident. 

What are the safety concerns for this type of operation? How has crane safety changed over the years you have been a trainer?

When you have people underwater around this stuff, there’s a lot more safety concerns. With divers in the water, we’re not just talking about taking somebody from a parking lot to an ambulance, now we’re talking about how we are going to get them out of the river, to a boat, over to some kind of triage where they can start getting help.

The whole idea behind a lift planning is to make sure that we’re aware of all the hazards, and then we’re going to do something about each and every hazard to either abate it, mitigate it, make it go away or deal with it, whatever the case may be. Then they’re going to have to make sure it’s executed the way that it’s planned out. 

There was a time when the person that got the most done with the least amount was a hero, until there was an accident.

There was a time that it was acceptable to overextend people and overextend equipment in the name of getting it done. That’s no longer acceptable, because we know that it’s not cost effective. 

Being able to change a culture by education is a wonderful thing. We’re all smarter today than we were yesterday, at least I hope so.

Written by Julie Strupp

Dive Brief:

• Construction input prices increased 0.4% in March due to inflationary pressures and escalating supply chain issues, according to new Associated Builders and Contractors’ analysis of U.S. Bureau of Labor Statistics Producer Price Index data released Thursday.
• Input prices have now increased in every month of 2024, offsetting the three months of moderation that ended 2023. Both overall and nonresidential construction costs remain 1.7% higher compared to last year, according to the report.
• “This is not especially good news for those who purchase construction services,” said Anirban Basu, ABC chief economist. “Were it not for declines in energy prices, the headline figure for construction input price dynamics would have been meaningfully higher.”

Dive Insight:

Earlier this week, the consumer price index in March also rose more than forecast for the third straight month, according to the Bureau of Labor Statistics. Ken Simonson, chief economist at the Associated General Contractors of America, echoed Basu’s sentiment that growing evidence of resurfacing inflation is a negative for nonresidential construction activity.

“Not much to get excited about,” said Simonson in an email to Construction Dive. “Extreme lead times are still occurring for electrical equipment — large transformers and switchgear, sometimes elevator or HVAC parts.”

Prices increased for 10 of the 20 commodities tracked by ABC, according to the release. Materials like softwood lumber jumped 3.2% over the past month, while copper wire and cable increased 1.6%, according to the U.S. Bureau of Labor Statistics. On the flip side, prices fell in all three energy subcategories in March.

Along with inflation, a new set of supply chain issues are also pushing materials costs higher, said Basu. That includes the increasing cost of insuring ships, bottlenecks in the Red Sea, capacity pressures at the Panama Canal and the Key Bridge collapse in Baltimore. 

“In addition to supply chain issues, there is an abundance of publicly and privately financed megaprojects around the nation, massively increasing demand for certain inputs,” said Basu. “And a majority of contractors expect their sales to increase over the next six months.”

That means to expect financing construction projects to remain expensive relative to historic norms for the foreseeable future, said Basu.

Blog written by Sebastian Obando

Cybersecurity incidents are on the rise, and contractors need to be prepared.

Karen Higgins-Carter, the chief information and digital officer for Providence, Rhode Island-based Gilbane Building Co., brings a wealth of experience from previous roles protecting the banking and financial services industries from cyber criminals. She warns that the internet wasn’t originally built to be secure, and that the onus is on contractors to make sure they’re up to snuff on today’s security demands.

Here, Higgins-Carter spoke with Construction Dive about where the biggest threats come from, how Gilbane keeps its employees up to date and what the industry can do to protect itself.

Editor’s Note: This interview has been edited for brevity and clarity.

CONSTRUCTION DIVE: What’s the state of cybersecurity in the construction industry?

KAREN HIGGINS-CARTER: I’ll start with my view on cybersecurity in general. I think it’s important to understand two things. First, the internet was not designed to be secure. It was designed to be open. Second, we are going to continue to see a volume of attacks coming from countries that are effectively safe harbor for this type of activity.

Because of that environment, we’re seeing the regulatory response. SEC disclosure requirements being first and foremost, that were implemented in December.

What I find is the need to adjust and connect with our people based upon their current level of awareness. There’s a predictable cycle of bringing our people from a position of not really being aware of the threats to feeling invested in protecting the company and being on board with that mission.

How do you get everyone to an optimal level of comfort with cybersecurity when their experiences differ?

One of the things that we have implemented in building, in terms of our innovation practices, is responsible innovation. That it’s important to take risks in order to grow. 

There is no risk-free path to achieving your strategic objectives. 

Where that’s important in innovation is understanding, how does this innovation support our strategic goals? What are the inherent cybersecurity risks that we need to identify? And, as part of experimentation, and scaling and innovation, we need to ensure that we are mitigating those risks at the same time. There’s a level of awareness that happens through the process of innovating.

What are the biggest risks to builders right now on the cybersecurity front?

As for the two biggest attack vectors, the first is phishing. That’s why awareness is so critical, because people are the first line of defense against phishing attacks.

The second attack surface involves application programming interfaces. Our connectivity to third parties and third-party software providers is the next most prominent threat. 

Where that plays into our industry, and where there’s really an opportunity for leadership, is in working with our software vendors. 

With the recent investment in construction technology, and lots of startups, security’s not necessarily first on their roadmap in terms of demonstrating early returns for their investors. 

Recognizing that we can have a collective voice as an industry and help those software vendors reach a higher level of capability, particularly in securing APIs. Vendors can sometimes make it sound very easy, and it’s really something that we, as end users, need to manage.

What does Gilbane do to keep itself secure?

In terms of starting from a strategy perspective, our board is engaged in cybersecurity. We have drafted what we call a cybersecurity risk appetite statement. That’s a practice that I brought over from banking, which is identifying how a cybersecurity attack creates losses for Gilbane and impacts our customers.

So we identify those top risks, and then based on that view, how it would impact us. We have a cybersecurity program where we prioritize our cybersecurity investments in processes and in controls to mitigate those risks.

We prioritize safeguarding our clients’ confidential information. We safeguard our employees data because that is personally identifiable information. There’s other internal information about some of our investments in our development company.

I would say the other aspect of what we protect is a disruption in a business process. 

If our jobsite can’t perform, because either Gilbane or one of our trade contractors has a ransomware attack and can’t access their systems, we also look at how a critical business process would be impacted, and then, how you manage through that impact.

What can construction learn from the banking and financial fields on cybersecurity?

First, I think we can really collaborate on threat intelligence. 

And I don’t mean general best practice sharing. I mean very specific threat intelligence, such that we can collaborate and work together on preventing that same threat from impacting another business.

I think the second thing that we can do is collectively and proactively define our security expectations, particularly for software vendors.

Matt Verderamo is a consultant at Well Built Construction Consulting, a Baltimore-based firm that delivers strategic consulting, facilitation services and peer roundtables for construction executives. Opinions are the author’s own.

If you’re bidding work, never getting feedback and only winning when you’re the low bidder, then you’re working way harder than you need to. 

Most construction companies have strong estimating engines — a technically talented team that knows the details and can crank out bids — but can’t figure out why they’re still not landing a seat at the negotiations table.  

In my experience, clients won’t negotiate with you unless you’ve done two things: 

• Built credibility that shows you can actually do the work.
• Cemented a real relationship with them.

I’d like to share with you how to do both of those things so that your estimating engine can run more smoothly, burn less heat and achieve greater efficiency in the form of higher win rates.

Building credibility 

If I love hanging out with you, but think that you’re a terrible contractor, then I’m never going to award you a project. 

So, as much as everyone says, “relationships are everything,” that well worn mantra misses a critical component: Relationships are everything when they are based on trust that you can get the work done. 

Therefore, whether you’re pursuing a potential new client or expanding your account within an existing one, you need to make sure the customer feels 100% confident you can perform the types of projects you are bidding with them. 

The best contractors do this by creating an extensive presentation showing their full portfolio of projects and the team members who were a part of building them. 

Then, when they meet with their prospective clients, they do not go through the entire presentation, but rather ask a ton of questions: 

• Describe a contractor you trust to build your work and why.
• What do you expect from a subcontractor building this type of project? 
• Can you tell me about the last successful partnership you had with a contractor?

Based on the prospect’s answers, the contractor can then go into the presentation with a laser focus, only showing the projects or resumes that directly respond to the prospects’ answers, such as: 

• Showing similar completed projects. 
• Talking about successful partnerships. 
• Demonstrating their unique skills and capabilities. 

If nothing else, by the end of the meeting, the prospect knows that you ask great questions, you listen and care about their needs and you have repeatedly delivered on other projects. 

That, in turn, helps build trust that you will be reliable and establishes the credibility you need. 

Some other ideas for building credibility include: 

• Posting projects on social media. 
• Having a professional website. 
• Sharing case studies of similar completed projects. 
• Providing drone footage of completed projects and your facility. 
• Bringing experienced superintendents and foremen to your sales meetings. 
• Having your owner send an introductory message about the company’s history. 

Building relationships

So, trust and credibility are crucial. But being likable might be even more important. If I believe you are the best masonry contractor in the state from a skills perspective, but I hate dealing with you and your people — because you’re mean and nasty and dishonest and treat me like the enemy — then I’m never going to negotiate work with you. 

To be less dramatic: If I know you’re credible, but I really don’t know if I want to be around you for 18 months until the project is over, then I’m less likely to pick up the phone and make sure you get a certain project. 

This is why it’s so important to build real, authentic and mutually respectful relationships if you want to negotiate work. 

The good news is, this part is easy, and it can be fun: 

• Set up a relationship-discovery meeting with the prospect. 
• Ask questions, talk about what it would be like to work together, feel each other out. 
• Show up again two months later with lunch for the office. 
• Show up again two months later with bagels and coffee. 
• Call their people when you don’t need anything. 
• Remember things like their family members’ names, dog’s name, where they got married.
• Repeat steps 3 thru 6 forever. 
• Work your way into being a real friend.

In six months, you can go from not knowing each other to working on a budding friendship. Along the way, if you’re building credibility like I described above, then eventually a specific project that fits your niche is going to materialize. 

When it does, the prospect will have you top of mind, feel confident you can do the work and get excited to negotiate it with you and have the chance to work together. 

It’s not complicated, but dang does it work.

Blog written by Matt Verderamo with ConstructionDive

In recent years, firms have made strides to attract women to the construction workforce, such as more inclusive jobsite culture, better-fitting PPE and benefits designed to foster a healthy work-life balance. 

Progress is being made, but slowly. Women now make up 10.8% of construction workers, compared to 9.1% a decade ago, according to the U.S. Bureau of Labor Statistics. That share remains even smaller for craftswomen.

Here, Construction Dive talks with Maja Rosenquist, senior vice president of Minneapolis-based Mortenson, to learn more about the state of the company’s efforts to recruit women to the industry, what more can be done and how to measure success. 

CONSTRUCTION DIVE: What are the major hurdles to bringing women into the trades and retaining them?

MAJA ROSENQUIST:  From a female craftsperson’s perspective, a variety of hurdles that often begin on the jobsite can hinder career development and long-term engagement in the industry. The industry needs to give women more opportunities to acquire skills crucial to pursuing higher-paying, more advanced craft positions such as operating heavy equipment and mastering tools. Otherwise remaining engaged and progressing in one’s career becomes extremely challenging. 

While the makeup of tasks on a construction site can vary, the lion’s share of time is spent on direct construction — activities like framing, roofing, electrical, plumbing and finishing work — with less time devoted to things like site prep and cleanup. 

We want to see women get more access to this bigger piece of the pie in terms of skill development to create additional opportunities and support that promote on-site advancement opportunities. 

Construction’s culture is known to have been less-than-welcoming in the past. Has that changed?

The good news is that access and the opportunities that accompany it are changing. Challenges still remain and for many women, going into a field that’s still very much male-dominated can be intimidating because of issues that historically plagued the industry. This includes sexism, harassment and microaggressions that created an uncomfortable and hostile work environment. 

Growing awareness about gender inequality in construction has helped address these issues and improve practices. Many are working hard to promote diversity and inclusion in construction, offering training programs, mentorship opportunities and creating supportive networks for women. 

We see encouraging signs and continued collaboration between construction companies, trade unions, training providers and government agencies can inspire widespread adoption of inclusive practices and accelerate positive changes. One such collaboration among construction companies is Construction Inclusion Week. 

What is Mortenson’s game plan for recruiting more women to the craft workforce? 

Getting more women into the industry starts with a concerted effort to hire more women. That means getting out into the community and helping more women and girls see the building industry as a viable option. But hiring more women is just one part of the equation. To make a real difference and keep talented women in the pipeline, the industry must also support parity — from the office to the field. There needs to be clearer opportunities for meaningful careers — not just jobs —  in this industry for both men and women.  

Dive Brief:

• The structural issues that led to the January 2022 collapse of the Fern Hollow Bridge in Pittsburgh were the result of the city’s failure to respond to multiple red flags during inspections, according to a Feb. 21 National Transportation Safety Board press release.
• The NTSB, reiterating its May 2023 findings, found that the Pennsylvania Department of Transportation was aware of the structure’s issues, and didn’t perform regular maintenance to address those problems. However, the findings laid blame squarely at the feet of the city, whose failure to act on these recommendations, NTSB said in its report synopsis, led to the collapse.
• In addition, PennDOT contractors working on behalf of the city performed inspections that were not in compliance with published guidance from the Federal Highway Administration and American Association of State Highway and Transportation Officials. Because the span wasn’t properly evaluated, it remained open until it failed, officials said.

Dive Brief:

• Construction backlog ticked up in December to 8.6 months due to improving financing availability, according to a Tuesday release from Associated Builders and Contractors.
• The metric is still rebounding from a backlog level of 8.4 months in October, its lowest point since the first quarter of 2022, according to ABC. The December increase, however, has sparked some confidence among contractors, due to two consecutive months now of backlog growth.
• “Collectively, contractors experienced an uptick in optimism during the holiday season,” said Anirban Basu, ABC chief economist, in the report. “Credit conditions eased a bit during the last days of 2023 as the Federal Reserve indicated that its next set of moves will be to reduce borrowing costs.”

Dive Insight:

The Federal Reserve will likely trim the federal funds rate by the end of 2024, according to Fed officials. That anticipated easing of credit conditions resulted in both an improved backlog and more optimism in ABC’s Construction Confidence Index for the first half of 2024.

All three components of the index, which consists of sales, employment and profit margins, increased in December. Additionally, all three readings remain above the threshold of 50, indicating expectations for growth over the next six months, according to the report.

But causes for concern persist, especially since the Fed noted inflation still remained elevated during its last meeting in December. That could cause rates to remain up in the interim, said Basu.

“Recent data indicate that wage pressures persist, which makes it more likely that interest rates, and therefore project financing costs, will remain higher for longer,” said Basu. “Geopolitical instability appears to be on the rise, raising the probability of a major conflagration that could further impact supply chains and potentially cause steep increases in certain energy prices.”

That poses a challenge for contractors, especially for smaller firms with less than $30 million in revenue that focus on private-led construction, according to the report. Firms with under $30 million in revenue reported a decrease in backlog in December, dropping about 0.3 months worth of work.

The South, which remains the region with the lengthiest backlog, posted the largest monthly increase in December. Only the West, which historically reports the lowest backlog of any region, experienced a monthly decline, according to the report.

Written By: Sebastian Obando

The shift from Computer Aided Design (CAD) to Building Information Modeling (BIM) marks a major overhaul of construction project workflows, including those used in design, collaboration, project management, and facility management. And for AEC professionals, staying current with this change is absolutely crucial.

CAD brought about a transformation, replacing manual drafting with the ability to craft detailed designs on computers. It brought precision and speed to the drawing process. BIM, however, takes things further. It integrates data into three-dimensional models, providing a full picture of a building’s life from conception to completion. BIM solutions for the AEC industry enhances accuracy, teamwork and efficiency, leading to better project results.

The move from CAD to BIM is about a new way of thinking about and working on construction projects. BIM’s data-rich, three-dimensional models change the game, providing a detailed look at every aspect of a building’s life. This leads to significant improvements in the planning, execution, and management of construction, both projects and buildings.

The Origins and Development of CAD + BIM

The history of Computer-Aided Design dates to the early 1960s, when the first attempts were made to automate traditional drafting processes. The following is a brief timeline of the progression of CAD developments and their creators:

1950s

1957: The Pronto system, developed by Dr. Patrick J. Hanratty, marked an early venture into computer-aided drafting. This laid the groundwork for the future development of CAD technology.

1960s

1963: Ivan Sutherland developed Sketchpad, one of the earliest interactive computer graphics systems, allowing users to create and manipulate shapes.

1970s

Patrick J. Hanratty: Often referred to as the father of CAD, he founded the company MCS and developed the PRONTO CAD system in the mid-1970s.

1980s

1982: Founded by John Walker and twelve others, Autodesk introduced AutoCAD, becoming a leader in 2D and 3D design software.

1990s

1988: PTC introduced Pro/ENGINEER, one of the first parametric feature-based solid modeling CAD systems—a major advancement in 3D design.

1992: The term Building Information Model, BIM, emerged, focusing on information-rich 3D models.

2000s

Dassault Systèmes: Creators of CATIA (Computer-Aided Three-Dimensional Interactive Application), a powerful CAD software widely used in aerospace and automotive industries.

Early BIM software gained traction, emphasizing data integration and parametric modeling.

BIM’s adoption expanded across the architecture, engineering, and construction sectors.

2002: Introduction of the IFC format for interoperability between BIM software.

2010s:

2012: Trimble acquired SketchUp from Google, contributing to the evolution of user-friendly 3D modeling software.

2000s–2010s: BIM’s adoption expanded across architecture, engineering, and construction sectors.

2010s: Government BIM mandates implemented for public projects to drive industry-wide adoption.

2010s: BIM software began utilizing cloud technology for enhanced collaboration.

2012: BIM platforms integrated simulation tools and expanded their lifecycle capabilities.

Continuous Development: Ongoing enhancements in BIM software to address interoperability, simulation, and collaborative features.

Limitations of CAD & the Transition to BIM

As CAD became the standard in the industry, certain limitations became clear. Traditional CAD tools were groundbreaking when they first appeared, but they struggled to keep up with the demands of today’s complex construction projects. These tools fell short in areas of collaboration and information management, issues that became more pronounced as the size and scope of projects increased. The shortcomings of CAD systems, causing inefficiencies and errors, hindered collaboration between architects, engineers, contractors, and necessary parties and increased project costs.

In response to these challenges, the industry recognized the need for a more comprehensive and collaborative approach to construction technology. BIM emerged as a response, introducing 3D parametric modeling coupled with rich data attributes.

BIM services not only addressed the geometric representation of structures, but also integrated information about materials, costs, schedules, and other necessary aspects of project management and information sharing. This evolution aimed to enhance collaboration, reduce error, and provide a more accurate representation of the entire building’s lifecycle.

Challenges

Despite the number of advantages, the adoption of BIM is not without its challenges. It is apparent that smaller firms are not utilizing BIM software at the same rate as larger companies.

 In 2021, 97% of large firms (50 or more employees) adopted or currently utilized BIM for billable projects, while only 52% of small firms (under 10 employees) utilized BIM software.¹ Only 8% plan to acquire it eventually, highlighting the implementation issue when utilized on a smaller scale.¹

For some, it may be costs, while for others, it may be a lack of demand from consultants and clients.

Looking into the way BIM is utilized further, 91% of firms that use BIM for billable work are using it for design visualization, while only 32% use BIM for quantity takeoffs/estimates, 31% for energy/performance analysis, 28% for managing model data during construction, and only 6% are utilizing BIM for 4D scheduling and sequencing¹.

Looking at these data, we can see that there is a discrepancy between understanding and learning the full use, extent, and intention of BIM software. Additionally, there can be confusion about which uniform standards to follow. While there are recommended BIM standards, this is often relative to region and can affect software change and use.

The Future of BIM

The evolution from CAD to BIM signifies a transformative period in construction technology. The advantages of BIM in precision, collaboration and efficiency highlight its place in modern construction practices.

As the construction sector advances, technology must keep up. BIM solutions, once mainly used in architecture and buildings, is now adopted in civil, structural, and facility management. It’s expected to grow and include more players as needed.

Enhanced collaboration could lead to smoother data sharing and teamwork across the design, building, and use phases. This might prompt a move toward more cloud-based services.

Merging BIM with AR and VR could be another direction. This would let participants see and engage with BIM models in real-like settings, improving design talks, construction prep and facility upkeep.

BIM data are valuable not only for visualization but also for analysis. This would involve a deeper integration of data analytics and AI in BIM to extract useful and meaningful insights, optimize design decisions, and predict potential issues through phasing.

While already present, sustainability analysis tools would progress to evaluate more accurate environmental impact data, energy efficiency, and life-cycle assessments. In terms of implementation, we can see BIM usage on a much larger scale, bringing further regulations to standardize projects.

BIM will continue to grow and adjust to the climate of the construction industry as it has in the past.

Case Studies

Hospital in Egypt

Need: The firm was working on a USD 5 million SF hospital in Egypt, where it needed to ensure optimal and effective usage of the available area, implement proper material planning, and execute lifecycle assessments.

BIM Solution: Develop a coordinated Revit model with information-rich components and families, and extract BOQ’s for materials and quantity needed onsite.  Using clash coordination to ensure appropriate planning on a large scale Meeting COBie and LOD400 standards to ensure consistent and reliable detailing and data.

US Dorm Building

Need: Current modeling approaches lacked information and functionality for sequencing and scheduling. Tedious and drawn-out coordination and unclear timelines in the current approach.

BIM Solution: Required a model with enhanced capabilities to allow for stage-wise simulation of construction activities and timeframe visuals. This included a 4D BIM scheduler via Navisworks to express a timeline relative to each stage. All documentation and drawings for construction sequencing were extracted by phase from the model and shared with the client to support better project management.

Infrastructure construction is poised for another strong year, thanks in part to large infusions of federal money. The sector has propped up the building industry in recent months amid interest rate hikes and declines in backlog.

The Infrastructure Investment and Jobs Act is ramping up in its third year and funds from the Inflation Reduction Act and CHIPS Act are flowing. The impacts of those investments are increasingly visible as they fuel thousands of projects around the country, many of them massive.

Here are nine key megaprojects that will advance this year:

Plant Vogtle nuclear plant
$30 billion
Waynesboro, Georgia

A $30 billion nuclear power plant in Georgia, constructed in part by Reston, Virginia-based Bechtel, will likely cross a major threshold in the first months of 2024.

Unit 4 of Plant Vogtle, located near Waynesboro, Georgia, is on schedule to begin generating power early this year, according to Southern Co. spokesperson Alicia Brown. Plant Vogtle’s Unit 3, also built by Bechtel, went online at the end of July.

Bechtel partnered with North America’s Building Trades Unions to build the two units, with 9,000 workers combined on the site at the peak of construction.

The startup of the reactors has been hailed as a major milestone in U.S. nuclear power construction, but the project took more than seven years longer than originally planned and at a cost of more than double the preliminary projected price, according to Reuters.

When finished, Unit 4 — operated by Southern Co. subsidiary Georgia Power — will become the largest generator of clean energy in the U.S., Brown said.

Able to power an estimated 500,000 homes and businesses, Unit 3 was the country’s first newly constructed nuclear unit in over three decades.

JFK Airport expansion
$19 billion
New York City

John F. Kennedy Airport will continue its ambitious multibillion-dollar transformation this year. 

The Port Authority of New York and New Jersey expects the topping out of steel to occur in 2024 for the airport’s Terminal 1 and Terminal 6 projects. These cutting-edge international terminals, with a combined investment of $9.5 billion for Terminal 1 and $4.2 billion for Terminal 6, are currently simultaneously under construction. AECOM Tishman and Gensler serve as Terminal 1’s design-build team, while AECOM Hunt is leading construction on the Terminal 6 project.

The phased completion of Terminal 1 remains on track, with the opening of the arrivals and departures hall and 14 gates scheduled for 2026. The final nine gates will be ready for passengers by 2030. Meanwhile, Terminal 6 also is progressing steadily, according to the Port Authority. The first phase is set to conclude in 2026, consisting of a new arrivals and departures hall, while the final phase is targeting completion in 2028. 

Terminal 8’s $125 million concessions redevelopment is also currently underway inside the terminal. The project includes new dining, retail, duty-free shopping, performance space and new digitally enabled experiences for customers, according to the release.

Meanwhile, the $1.5 billion expansion of Terminal 4 by JFK International Air Terminal and Delta Airlines, will also mark a significant milestone in 2024. Already operational with 10 new gates that opened in 2021, the terminal will see additional enhancements this year, according to the Port Authority. These enhancements include renovation of existing concourses, roadway upgrades to improve vehicle access, an updated check-in hall, new gate finishes, added curbside dropoff space and restroom modernizations, according to Delta.

Lastly, operation of a construction support facility to manufacture concrete on site, recycle concrete debris for reuse in new airport construction and to barge new materials began operations in 2023, with the concrete batch plant expected to open early this year.

Gateway Project
$16.1 billion
New York and New Jersey

President Joe Biden called the Gateway Program “one of the biggest, most consequential projects in the country,” but it has nonetheless experienced years of delays and political fights. With a funding boost from the IIJA, work started moving last year on both sides of the Hudson River, and there will be many more opportunities for contractors in 2024. 

Amtrak’s storm-battered, century-old tunnels under the Hudson River pose a serious bottleneck for passengers. The Gateway Program is a $16.1 billion group of projects that aim to address this problem, doubling capacity for the Northeast Corridor rail segment between New Jersey and New York City. The work includes rehabilitation of the old tunnels and construction of another pair, as well as new bridges, tracks and platforms.

Several portions of Gateway are now in procurement — including the Manhattan Tunnel, the Palisades Tunnel, the Hudson River Ground Stabilization and Tonnelle Avenue Bridge and Utility Relocation Project — and contractors may be finalized this year. The Gateway Development Commission in January released an animation depicting how the work will unfold. Tunnel digging is expected to begin in 2025, and the overall project is slated for completion in 2035.

Amtrak is improving many other parts of its system as well, including the new $6 billion Frederick Douglass Tunnel in Baltimore, which will largely replace the existing 150-year-old Baltimore and Potomac Tunnel.

Brightline West
$12 billion
Southern California and Las Vegas

This high-speed rail project to connect Southern California and Las Vegas is now $3 billion closer to reality. 

Brightline West, a 218-mile rail link between Rancho Cucamonga, California, and Sin City received a $3 billion grant from the Federal-State Partnership for Intercity Passenger Rail Grant Program last month. That accounts for about 25% of the project’s $12 billion estimated cost.

Beyond money, however, the project also has a leg up on cutting through the red tape and politics that have weighed down progress on California’s high-speed rail project between San Francisco and Southern California. 

Brightline West now has all the necessary right-of-way, environmental approvals and labor agreements it needs to break ground along the Interstate 15 corridor, according to U.S. Sen. Jacky Rosen (D-Nev.). With speeds of 200 miles per hour and no grade crossings, the rail line would cut travel times in half compared to driving, to about two hours.

While a start date hasn’t been announced, the private-public partnership also has the benefit of Florida-based Brightline’s experience building its existing high-speed rail line between Orlando and Miami, which was completed last year. Rosen said it’s feasible Brightline West could serve passengers by 2028, when Los Angeles is set to host the Summer Olympics.

North Houston Highway Improvement Project
$9.7 billion
Houston, Texas

Texas is investing billions into its roads and highways over the next decade, and the $9.7 billion I-45 project in Houston is one of the state’s biggest such efforts. The heavily congested highway has the dubious distinction of being among the most dangerous in the country. 

The project will widen and reroute I-45 near and north of downtown and widen the freeway between downtown and Beltway 8. Construction on the downtown-area segment is expected to start this year, starting with drainage work and new connections to the east of downtown.

Planning for the project began more than a decade ago, but faced several delays when the Federal Highway Administration and Harris County forced Texas DOT to address environmental and civil rights complaints. Those issues were resolved in late 2022 and early 2023, allowing Texas DOT to move forward with its plans with some modifications, including bike lanes and pedestrian improvements.

Work will be executed in three phases made up of a series of smaller projects that ultimately will connect, but no contractors have been selected yet, according to Texas DOT spokesperson Danny Perez. The overall project is expected to be complete by 2042.

Interstate Bridge Replacement
More than $7.5 billion
Oregon and Washington

The push to replace the century-old I-5 bridge over the Columbia River between Oregon and Washington got a $600 million boost in December, a year before construction could start in 2025. The Interstate Bridge Replacement project’s goal is to provide a safe, earthquake-resilient multimodal corridor on the West Coast.

Oregon Public Broadcasting reported at the beginning of the year that Greg Johnson, the program leader for the project, said a new cost estimate would be forthcoming this year. In 2022, planners had said the project would cost between $5 billion and $7.5 billion, with an aim at hitting a $6 billion midpoint. But that was already an increase of the original cost estimate, which came in between $3.2 billion and $4.8 billion in 2020. 

The Interstate Bridge Replacement program received the grant from the U.S. Department of Transportation’s Mega Program. That pool of money was created by the Infrastructure Investment and Jobs Act to support large, complex projects that are likely to generate national or regional economic, mobility or safety benefits.

The scale of the price increase, and where additional funds will come from, are still unknown.

West Shore Lake Pontchartrain levee system
$3.7 billion
Southeast Louisiana

Over 60,000 Louisianans in the southeast section of the state have little or no hurricane protection. During Hurricane Isaac in 2012, a storm surge flooded 7,000 homes, submerging I-10 — the main evacuation route for New Orleans — and slowed emergency response around the region.

The West Shore Lake Pontchartrain project aims to fix that. The 18.5-mile levee system will consist of flood walls, urban levees and pumps. It received $760 million in funding from the Bipartisan Budget Act of 2018. As of the summer, the full project cost had reached $3.7 billion, according to the U.S. Army Corps of Engineers. 

The USACE awarded the first levee contracts in December 2022 for a $9.3 million section set for completion this year. Those awards followed at least four more levee contracts worth $22 million to $39 million, for stretches set for completion within the next two years.

In preparation for the work, the USACE has constructed nine roads totaling 14 miles through marsh and swamp. Crews also have begun to move tons of material, such as sand and clay, to construct walls as high as 12 feet to better protect the region from storm surges.

Construction Dive reached out to USACE for more information on the contractors selected for these contracts but did not hear back by time of publication.

Brent Spence Bridge
$3.6 billion
Kentucky/Ohio border

A joint venture of Chicago-based Walsh Construction and Westerville, Ohio-based Kokosing Construction was selected last year to overhaul the aging Brent Spence Bridge, which connects Covington, Kentucky, and Cincinnati with interstates 71 and 75. The project will break ground later this year, according to the project website, and officials expect work to substantially finish in 2029.

The $3.6 billion Brent Spence Bridge Corridor Project will rehabilitate the existing double-deck bridge and build a new span to the west. The project will improve approximately 8 miles of both interstates through Kentucky and Ohio.

The project will receive $1.4 billion in funding from the federal government’s Bridge Investment Program, a part of the $1.2 trillion IIJA.

Soo Lock Project
$3.2 billion
St. Mary’s River, Michigan

Phases 2 and 3 will continue this year on the $3.22 billion Soo Lock project on St. Mary’s River in Michigan. Officials are overhauling the locks to create new passageways and maintain the critical trade route, which handles about 7,000 ships annually.

The goal of the project, spearheaded by the U.S. Army Corps of Engineers, is to build a second lock, the size of the original Poe Lock, in the footprint of the decommissioned Sabin Lock.

For phase 2, a joint venture of Fredericktown, Ohio-based Kokosing Industrial and Overland, Missouri-based Alberici Constructors will rehabilitate the upstream approach walls, which will allow modern vessels to tie up and wait in line to pass through the new lock. Work on this phase of the project is expected to wrap up in the summer.

Phase 3, from a joint venture of Kokosing Industrial, Alberici Constructors and Evansville, Indiana-based Traylor Bros., encompasses a variety of tasks including the demolition of the existing Sabin Lock, bedrock excavation and the construction of a new lock. The JV recently picked up a $213.8 million option for additional work, such as the addition of a new power plant bridge ramp and upstream wide wall monoliths.

Among many challenges, the rising cost of materials and labor hampered construction activity in 2023. Economists — worried about rampant inflation — even labeled some building sectors as “recessionary.”

In response, the Federal Reserve raised its benchmark interest rate four times. While those hikes effectively brought inflation down from its peak, heightened lending standards and subsequent issues with financing on construction projects worsened as the year progressed.

That affected many projects across the country over the past 12 months, especially on privately led developments. For example, Shopoff Realty Investments paused construction on its approximately $550 million Las Vegas Dream Resort in March due to construction financing issues. In November, the Clark County, Nevada, Zoning Commission axed a separate $5 billion entertainment complex in Vegas due to financing issues.

Nevertheless, as the new year begins, it’s evident that certain types of construction will enjoy a surge in activity throughout 2024. On the flip side, some sectors continue to grapple with challenges that are likely to persist over the next 12 months. Below are 2024’s winning and losing construction sectors:

Winner: Factories

A powerhouse ever since the pandemic accelerated America’s onshoring effort, manufacturing construction will continue its hockey-stick trajectory in 2024.

Anirban Basu, chief economist at Associated Builders and Contractors, said larger contractors should continue to benefit from a “bevy of megaprojects around the nation.” Meanwhile, Didi Caldwell, president and CEO of Global Location Strategies, a Greenville, South Carolina-based business consulting and services firm for manufacturers, labeled the onshoring trend a “once-in-a-lifetime” event.

Starts in the sector, which include multibillion-dollar electric vehicle battery plants and 1,000-acre semiconductor factories projects, hit $97 billion in 2023, according to Dodge Construction Network. That ranks as the second largest amount of investment in one year over the past 15 years. Only 2022, which set the all-time record at $102 billion, posted higher activity.

But this year is on track to be even bigger. Dodge forecasts $112 billion in investment in the sector for 2024, a potential record amount of activity, said Richard Branch, chief economist for Dodge Construction Network.

“The good side of the market here is we are starting to see chip demand pick up, semiconductor sales are starting to rise,” said Branch. “That’s a good sign after a year or so of softness in the market.”

Winner: Bridges and roads

About 63%, or nearly $400 billion for over 400,000 projects, of infrastructure funding has thus far been announced since President Joe Biden signed into law the Infrastructure Investment and Jobs Act two years ago, said Branch.

But that doesn’t mean there’s just 37% of funds remaining to spur construction activity. Announced funding, which is captured from agency press releases, is preliminary and non-binding, whereas awarded funding represents actual obligations, according to the White House.

“We have not seen that announcement move all the way through the allocation, or [be] spent yet,” said Branch. “One of the big assumptions we made way back in 2021 was that 2023 and 2024 would be the best years for growth and infrastructure. I think there’s reason to believe, though, that that can maybe be more like 2024 and 2025.”

One reason why is because material prices remain high. With the focus on inflation in 2022 and 2023, local and state planners may have opted to slow activity until later in 2024, where they could benefit from more favorable pricing conditions.

“Data is still out on that one, obviously, but I wouldn’t be surprised if stronger growth gets pushed out,” said Branch. “That means by the midpoint of [2024], we should start to see acceleration in the forecast. Essentially, what the models are doing here is just pushing the growth out.”

That leaves a lot of runway for bridge, highway and street construction. Dodge pegs project starts for streets and highways to grow 23% in 2024, and another 25% growth in bridge construction, totaling about $147 billion worth of activity in these sectors.

Loser: Warehouses

High interest rates, supply chain disruptions and strict lending standards dragged down commercial construction for much of 2023. Despite anticipated rate cuts in 2024, Basu expressed doubt regarding the Federal Reserve’s ability to achieve a “soft landing,” or raising rates just enough to stop inflation without triggering a recession. He added he still expects a more significant economic downturn in the future.

“I thought recession would come in 2023,” said Basu. “To me, the question has always been the following — ‘Will this rate hiking cycle engine by the Federal Reserve end in a recession? Yes or no?’ I continue to believe the answer is yes, I do.”

Starts on overall commercial projects, such as retail, office, warehouse and hotel, dropped about 6% in 2023, according to Dodge. In 2024, the sector is expected to tumble another 2%.

Much of that negative outlook is focused on a few sectors within the commercial category.

For example, warehouse starts have entered “structural decline,” said Branch. That slowdown predominantly stems from two major warehouse builders, Amazon and Walmart, scaling back their warehouse construction plans for the foreseeable future. Amazon alone accounts for 16% of the warehouse construction market, according to Dodge.

Nevertheless, there are regional variances in warehouse construction, and the impact of recalibration is not uniform across all markets. Some areas may still experience positive growth despite the overall adjustment.

“I hesitate to call this an economic downturn because if you look at the fundamentals underneath this, vacancy rates are near record lows, they’re heading up, but they’re still very low. There’s a lot of demand for high tech logistics infrastructure,” said Branch. “It’s basically just one player stepping out and that realignment continues into 2024.”

Dodge forecasts warehouse construction starts to reach $44 billion in 2024, an 11% drop from the year before. That negative forecast now marks two consecutive years of contraction, following more than 10 years of growth.

Loser: Offices

Economists maintain traditional office construction likely won’t return to pre-pandemic levels of activity anytime soon, and maybe never will.

In fact, speculative office construction, which means building office space before securing a tenant lease, continues to take up less share of overall office construction work. Once representing about 65% of work by dollar value, those types of project are now much less common compared to alteration-type projects.

Alterations, which include remodeling, renovation or rearrangements of existing spaces, now account for approximately half of total office construction activity, said Branch. That indicates a bleak outlook for new office construction.

Traditional office construction starts will drop 6% in 2024, according to Dodge forecasts. Without alteration projects propping up those activity levels, office construction forecasts would likely be even worse, added Branch.

Dive Brief:

• Contractors’ struggles to find workers will continue in 2024, but the majority still intend to increase their staffing due to rising demand for multiple project types, according to a new Associated General Contractors of America survey of its members.
• Nearly eight in 10 respondents said they have a hard time filling salaried or hourly craftworker positions, but 69% still said they anticipate a “total increase” in headcount. A fifth of respondents said it will get harder to hire in 2024.
• Nonetheless, contractors will need those workers. In 14 of 17 sectors, respondents anticipated the dollar value of projects they compete for to increase this year compared to 2023.

Dive Insight:

Hiring isn’t the only ingredient creating what AGC CEO Stephen Sandherr called a “mixed-bag” for contractors this year.

Respondents’ top concerns for 2024 included:

• Rising interest rates or financing costs: 64%.
• Economic slowdown or recession: 62%.
• Rising direct labor costs (pay, benefits, employer taxes): 58%.
• Insufficient supply of workers or subcontractors: 56%
• Worker quality: 56%.
• Material costs: 54%.

During a Jan. 4 webinar about the report, Lynn Hansen, CEO of Charlotte, North Carolina-based Crowder Constructors, expressed cautious optimism for the new year. Crowder works in the energy, mechanical, transportation and electrical sectors in the Southeast, where Hansen said federal work from the Infrastructure Investment and Jobs Act has benefited the company, but she also anticipates competition to increase.

That competition isn’t only for projects, but to find and keep talented workers.

“Our good people are constantly being recruited,” Hansen said. “We’re always looking for top qualified people and paying them competitively is key.” 

In order to recruit and retain more workers, nearly two-thirds of respondents to the AGC survey said they increased base pay in 2023 more than they had the year before, and a quarter introduced or increased incentives or bonuses.

Hansen said younger workers value more flexibility and time off, and Crowder intends to invest more in technology to recruit workers.

At the same time, IIJA funding has come with more strings, as federal projects require adherence to recently updated Davis-Bacon rules.

“Paying our people and reporting requirements have not been difficult for us,” Hansen said, though creating a registered apprenticeship program in compliance with the Inflation Reduction Act took nearly a year to get up and running, she added.

written by Zachary Phillips

Dive Brief:

• A study looking at the effects of working outside in hot weather by New York City-based Turner Construction discovered many workers’ core body temperatures reached risky levels even on moderate summer days.
• The heat pilot study, conducted over three days last summer with an average peak temperature of 88 degrees Fahrenheit, found that 43% of the 33 workers monitored had core temperatures reach over 100.4 F, even in “cooler than typical summer conditions.” OSHA lists 100.4 F as the benchmark for an elevated risk of heat stress.
• In partnership with the University of New Mexico, Indiana University and La Isla Network — an Alpharetta, Georgia-based organization researching the effects of heat on workers — the study was designed to better understand how increased temperatures affect jobsite safety.

Dive Insight:

Prior to the study, participants swallowed a data collection device, which remained in their bodies for 24 hours. The object, the size of a pill, allowed researchers to continuously monitor internal body temperature. Each worker participated for only one day.

“There is a lack of awareness about the serious consequences of extreme heat on our business,” said Monika Serrano, resilience project manager at Turner.

As the climate changes, Serrano said, outdoor working conditions can become more hazardous, creating concerns about the health of workers like those in construction or agriculture. The earth’s average surface temperature is now about 2 degrees F hotter than it was in the late 1800s, according to the Fifth National Climate Assessment released by the U.S. Global Change Research Program last year.

Researchers said if elevated core temperatures were prolonged, they could result in permanent damage to a person’s health.

“The findings demonstrate that in periods of extreme hot weather, such as during heat waves, construction workers are at substantial risk of heat-related health issues,” reported Fabiano Amorim and Zachary Schlader, associate professors at NMU and IU, respectively, and the lead researchers on the pilot study. “This research emphasizes the urgent need for strategies to protect the health and safety of construction workers.”

Dehydrated at work

Serrano said researchers also learned that most workers arrived at the jobsite already dehydrated. 

“Knowing that, we have a really clear opportunity to do direct outreach about hydrating outside of work,” she said.

Amid record-breaking temperatures last summer, President Joe Biden enacted plans to protect workers from extreme heat, asking the Department of Labor to issue a hazard alert for high heat, equipping employers and workers with information on protecting themselves in the unsafe conditions.

OSHA lacks a federal heat standard, and though it has started creating one, the process is arduous and lengthy. For the time being, employers are left to create their own hot weather strategies based on the agency’s recommendations around water, rest and shade.

written by Zachary Phillips

Among many challenges, the rising cost of materials and labor hampered construction activity in 2023. Economists — worried about rampant inflation — even labeled some building sectors as “recessionary.”

In response, the Federal Reserve raised its benchmark interest rate four times. While those hikes effectively brought inflation down from its peak, heightened lending standards and subsequent issues with financing on construction projects worsened as the year progressed.

That affected many projects across the country over the past 12 months, especially on privately led developments. For example, Shopoff Realty Investments paused construction on its approximately $550 million Las Vegas Dream Resort in March due to construction financing issues. In November, the Clark County, Nevada, Zoning Commission axed a separate $5 billion entertainment complex in Vegas due to financing issues.

Nevertheless, as the new year begins, it’s evident that certain types of construction will enjoy a surge in activity throughout 2024. On the flip side, some sectors continue to grapple with challenges that are likely to persist over the next 12 months. Below are 2024’s winning and losing construction sectors:

Winner: Factories

A powerhouse ever since the pandemic accelerated America’s onshoring effort, manufacturing construction will continue its hockey-stick trajectory in 2024.

Anirban Basu, chief economist at Associated Builders and Contractors, said larger contractors should continue to benefit from a “bevy of megaprojects around the nation.” Meanwhile, Didi Caldwell, president and CEO of Global Location Strategies, a Greenville, South Carolina-based business consulting and services firm for manufacturers, labeled the onshoring trend a “once-in-a-lifetime” event.

Starts in the sector, which include multibillion-dollar electric vehicle battery plants and 1,000-acre semiconductor factories projects, hit $97 billion in 2023, according to Dodge Construction Network. That ranks as the second largest amount of investment in one year over the past 15 years. Only 2022, which set the all-time record at $102 billion, posted higher activity.

But this year is on track to be even bigger. Dodge forecasts $112 billion in investment in the sector for 2024, a potential record amount of activity, said Richard Branch, chief economist for Dodge Construction Network.

“The good side of the market here is we are starting to see chip demand pick up, semiconductor sales are starting to rise,” said Branch. “That’s a good sign after a year or so of softness in the market.”

Winner: Bridges and roads

Beyond manufacturing, roadway construction could really get rolling in 2024.

About 63%, or nearly $400 billion for over 400,000 projects, of infrastructure funding has thus far been announced since President Joe Biden signed into law the Infrastructure Investment and Jobs Act two years ago, said Branch.

But that doesn’t mean there’s just 37% of funds remaining to spur construction activity. Announced funding, which is captured from agency press releases, is preliminary and non-binding, whereas awarded funding represents actual obligations, according to the White House.

“We have not seen that announcement move all the way through the allocation, or [be] spent yet,” said Branch. “One of the big assumptions we made way back in 2021 was that 2023 and 2024 would be the best years for growth and infrastructure. I think there’s reason to believe, though, that that can maybe be more like 2024 and 2025.”

One reason why is because material prices remain high. With the focus on inflation in 2022 and 2023, local and state planners may have opted to slow activity until later in 2024, where they could benefit from more favorable pricing conditions.

“Data is still out on that one, obviously, but I wouldn’t be surprised if stronger growth gets pushed out,” said Branch. “That means by the midpoint of [2024], we should start to see acceleration in the forecast. Essentially, what the models are doing here is just pushing the growth out.”

That leaves a lot of runway for bridge, highway and street construction. Dodge pegs project starts for streets and highways to grow 23% in 2024, and another 25% growth in bridge construction, totaling about $147 billion worth of activity in these sectors.

Loser: Warehouses

Not all sectors will increase activity in 2024, however.

High interest rates, supply chain disruptions and strict lending standards dragged down commercial construction for much of 2023. Despite anticipated rate cuts in 2024, Basu expressed doubt regarding the Federal Reserve’s ability to achieve a “soft landing,” or raising rates just enough to stop inflation without triggering a recession. He added he still expects a more significant economic downturn in the future.

“I thought recession would come in 2023,” said Basu. “To me, the question has always been the following — ‘Will this rate hiking cycle engine by the Federal Reserve end in a recession? Yes or no?’ I continue to believe the answer is yes, I do.”

Starts on overall commercial projects, such as retail, office, warehouse and hotel, dropped about 6% in 2023, according to Dodge. In 2024, the sector is expected to tumble another 2%.

Much of that negative outlook is focused on a few sectors within the commercial category.

For example, warehouse starts have entered “structural decline,” said Branch. That slowdown predominantly stems from two major warehouse builders, Amazon and Walmart, scaling back their warehouse construction plans for the foreseeable future. Amazon alone accounts for 16% of the warehouse construction market, according to Dodge.

Nevertheless, there are regional variances in warehouse construction, and the impact of recalibration is not uniform across all markets. Some areas may still experience positive growth despite the overall adjustment.

“I hesitate to call this an economic downturn because if you look at the fundamentals underneath this, vacancy rates are near record lows, they’re heading up, but they’re still very low. There’s a lot of demand for high tech logistics infrastructure,” said Branch. “It’s basically just one player stepping out and that realignment continues into 2024.”

Dodge forecasts warehouse construction starts to reach $44 billion in 2024, an 11% drop from the year before. That negative forecast now marks two consecutive years of contraction, following more than 10 years of growth.

Loser: Offices

Economists maintain traditional office construction likely won’t return to pre-pandemic levels of activity anytime soon, and maybe never will.

In fact, speculative office construction, which means building office space before securing a tenant lease, continues to take up less share of overall office construction work. Once representing about 65% of work by dollar value, those types of project are now much less common compared to alteration-type projects.

Alterations, which include remodeling, renovation or rearrangements of existing spaces, now account for approximately half of total office construction activity, said Branch. That indicates a bleak outlook for new office construction.

Traditional office construction starts will drop 6% in 2024, according to Dodge forecasts. Without alteration projects propping up those activity levels, office construction forecasts would likely be even worse, added Branch.

Dive Brief:

• Contractor employer groups have sued the federal government over a recent final rule change to the Davis-Bacon Act, which went into effect Oct. 23.
• On Tuesday, Associated Builders and Contractors and its Southeast Texas chapter filed suit against the federal government in the U.S. District Court for the Eastern District of Texas and Associated General Contractors of America filed suit in the U.S. District Court for the Northern District of Texas. 
• The rule change aimed to raise the hourly earnings of workers for general contractors and subcontractors on federally funded projects, such as those under the Infrastructure Investment and Jobs Act and the CHIPS Act.

Dive Brief:

• The Dodge Momentum Index, a benchmark that measures nonresidential building planning, inched up 1% in October driven largely by warehouse activity, according to the Dodge Construction Network. It’s the second consecutive month of positive gains.
• September’s report reversed six months of contractions. This month’s sequential gain suggests that the index, which peaked in December 2022 and typically leads actual construction spending by 12 months, continued to build on its positive direction. 
• “Heightened momentum in warehouse planning activity supported the commercial side of the index this month, while muted education planning activity slowed the institutional portion,” said Sarah Martin, associate director of forecasting for Dodge Construction Network. “Overall levels of planning activity remain robust and will support construction spending over the next 12 to 18 months.”

Dive Insight:

Martin said last month that lingering high interest rates, supply chain snarls and tighter lending standards are likely to continue to weigh on the commercial segment, such as office, retail and warehouse projects.

So, while improvements in warehouse planning pushed the overall commercial component to rise 2% in October, concerns remain around the segment’s outlook. Year over year, the DMI for the commercial segment remains down 14%, according to Dodge.

On the institutional side, which includes education, life sciences and healthcare projects, the segment also posted a drop in planning, falling 1.4% in October, according to Dodge. Nevertheless, the sector as a whole has been largely resistant thus far to market headwinds, said Martin. Year over year, the institutional segment remains up 7%, according to the report.

“Month-to-month movement in the index can be volatile, but 2023 trends continue to show an overall decrease in commercial projects, offset by more institutional projects entering the planning queue,” said Martin. “Commercial planning has been generally in decline since its peak last November but has begun to stabilize in recent months.”

ABI continues to drop

Meanwhile, the Architectural Billings Index, which also provides a leading indicator for upcoming construction work that’s nine to 12 months out, continued to deteriorate, according to the most recent data from the American Institute of Architects. The ABI score of 44.8 is the lowest score reported since December 2020 — during the height of the pandemic — and indicates that the share of firms reporting declining billings has significantly increased.

“Owners want to build, but inflation is wreaking havoc with financial proformas and forcing cost cutting measures on many commercial projects so that they can proceed,” according to a 12-person firm in the Northeast referenced in the AIA report, with both commercial and institutional specialization.

According to Dodge, a total of 21 projects valued at $100 million or more entered the planning stages in October. The largest commercial projects included:

• The $215 Google data center in Kansas City, Missouri.
• The $180 million Mauna Kea Beach Hotel in Waimea, Hawaii.

The largest institutional projects to enter planning included:

• The $400 million Grand Sierra Resort Arena in Reno, Nevada.
• The $267 million renovation to Keller Auditorium in Portland, Oregon.

Blog written by Sebastian Obando at ConstructionDive

The U.S. continues to gain ground on other countries’ manufacturing dominance a year after President Joe Biden signed the $52 billion CHIPS and Science Act in August 2022.

The renewed push to revive American manufacturing after decades of offshoring has led to over $516 billion in private company investment, according to the White House. The multibillion-dollar investments scattered across the country range from biotechnology facilities and chip fabrication plants to electric vehicle battery factories and clean energy projects.

Some major manufacturing projects added to this page over the past four weeks include Wolfspeed’s multibillion-dollar John Palmour Manufacturing Center for Silicon Carbide in Chatham County, North Carolina, and Joby Aviation’s $500 million manufacturing facility in Dayton, Ohio.

The map also lists the contractors working on these projects when they are available. Some of the notable wins since the last update include:

• Whiting-Turner’s award to begin initial sitework on the John Palmour Manufacturing Center for Silicon Carbide for owner Wolfspeed.
• Evans General Contractors’ contract on a $1 billion BMW EV plant in Spartanburg, South Carolina.
• McCarthy’s win on the $400 million ICL manufacturing facility in St. Louis, Missouri.
• Tippman Group’s contract on the $205 million SK Food Group’s manufacturing facility in Cleveland, Tennessee.

Through August, manufacturing construction spending increased 65.5% in 12 months, according to an Associated Builders and Contractors analysis. On a seasonally adjusted annual rate, spending in the sector hit approximately $198.45 billion in August.

That exponential growth isn’t expected to hit any speed bumps either, according to Richard Branch, chief economist at Dodge Construction Network.

”Public dollars are flooding into the manufacturing and infrastructure sectors,” said Branch. “[That’s] leading to significant growth over the last year.”

The CHIPS Act provides $52.7 billion for American semiconductor research, development, manufacturing and workforce development. This consists of $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in research and development and workforce development and $500 million to strengthen global supply chains, according to the Biden administration. The CHIPS Act also provides a 25% investment tax credit for capital expenses for manufacturing of semiconductors and related equipment.

Additionally, several $1 billion or more manufacturing projects remain in the pipeline over the remaining months of the year. That should keep construction starts in the sector elevated for the foreseeable future, said Branch.

Written by Sebastian Obando and Julia Himmel for ConstructionDive

As design-build jobs grow in size and complexity, many need a designated person to facilitate communication between all parties and to ensure the project stays true to the owner’s vision, said panelists at the Design-Build Conference & Expo in Maryland last week. 

That’s where a design integration manager comes in.

“Design-build jobs are getting bigger and bigger by the day it seems like. Teams are huge, managing hundreds if not thousands of activities,” said Sean Gellhaus, associate vice president and national contracting manager at Kansas City, Missouri-based HNTB. “When you have a big team managing lots of activities, communication is critical, because if A, B and C don’t know what X, Y and Z are doing, you’ve got a big problem headed your way.”

A design integration manager keeps the project meshed with design expectations through each step of the building process and proactively mitigates conflict. Usually builder-supplied, they liaise with the design lead and construction manager as well as the owner, and mitigate issues as they arise by breaking down communication silos.

“[The design integration manager is] the glue that holds the entire design-build project together,” said Lori Ann Stevens, vice president and director of technical design with New York City-based Turner Engineering Group, a subsidiary of Turner Construction. “They are there to ensure that the owner’s needs are met, that the architect’s design integrity is preserved and that the estimate remains in that reserved bucket.”

An ideal design integration manager should be an experienced and effective leader, a collaborative decision-maker and a mediator, the panelists said. They should know how projects work, and respect the roles that everyone plays on a project and understand how they work together, said Scott Martin, project director and design-build market lead at Houston-headquartered engineering firm Walter P Moore.

Key responsibilities for this role include overseeing fundamental design direction and confirming the project meets its goals and criteria, establishing design budget “guard rails,” facilitating timely design decision-making, coordinating delivery of design packages and facilitating design and constructability reviews as well as communication between design and construction teams.

Here are five tips from panelists to make design integration management successful.

Fewer people will be working by the end of the decade — and employers need to brace for a “forever” labor shortage, experts say.

Fresh projections by the Bureau of Labor Statistics paint a stark picture, with the labor force participation rate expected to drop from 62.2% in 2022 to 60.4% in 2032. It was 63.3% before the Covid-19 pandemic and had generally been falling from a height of 67.4% in 2000. This is driven in large part by population shifts, as baby boomers retire and the number of Gen Z workers entering the labor force is smaller than previous generations, which economists and demographic watchers have long viewed as a slow-burning structural problem exacerbated by the pandemic.

“The projections released by the BLS confirm what economists and business owners are both seeing: what many believed to be a temporary, Covid-induced lack of workers is, in fact, a ‘forever’ labor shortage,” said Tom Bowen, an economist at payroll-and-benefits provider Gusto Inc.

He said slower population growth from fewer births as well as a drop in immigration over the past several decades have also contributed to the upcoming crunch.

“Without these sources of younger workers, the average age of the working population has been rising, which, in turn, has been driving both the long-term labor shortage and has increased demand for services such as health care and social assistance,” Bowen said.

So what have businesses been doing in response? They’re increasingly hiring contractors, with Gusto data showing the share of companies turning to contract workers has grown 28% since the start of the pandemic. Companies that are fully remote have also been increasing their hiring of foreign workers, with 20% of fully remote companies having at least one international employee.

While the overall population of those not in prison will grow by 18.7 million over the next decade, only about 6.5 million will be a part of the workforce, according to BLS projections. But older Americans not working will still be a driving force in the economy, as they require services and purchase goods — which means economic growth will remain largely the same as the last decade.

The 0.7% annual population growth through 2032 is a drop from the 0.8% annual population growth between 2012 to 2022, and is one of the lowest population growth rates since the BLS began tracking that data.

But some groups are expected to see a growth in their percentage of the workforce. Women ages 25 to 54 are projected to see their participation rate grow from 76.4% in 2022 to 76.7% in 2032. Men ages 25 to 54 are expected to see theirs drop from 88.6% to 86.7%.

What else are companies doing in response?

Beyond relying more heavily on contract workers, companies of all sizes are having to get creative in recruiting and retaining employees.

John Morgan, president at talent management and advisory firm LHH, said the demand for healthcare and other services from older American will only continue to grow. And while automation will ease some of the pain of the tight labor market, demand will far outstrip worker supply.

“If you look at the sheer numbers of them there are not enough people to fit the roles we project to be open in the future,” Morgan said. “However the mix of jobs or skills is you are going to have to do a better job and a different job of recruiting talent because the overall population is going to be smaller.”

Companies are adapting, Morgan said, with some using artificial-intelligence technology to better search for and identify potential candidates instead of typical methods like searching on LinkedIn or recruiting from local colleges.

Many companies are also rethinking requirements for various jobs, including a focus on skills over degrees alone. Morgan highlighted the tech industry as one where a bootcamp degree or skill certificate can be enough for a job that might have normally been filled by an applicant with a four-year degree.

Ultimately, companies need to do more to appeal to workers, especially younger ones, Morgan said. Pay and benefits must be competitive. But perhaps more importantly, companies need to be sure they are identifying and providing workers with a career track they can follow, or they might end up leaving for greener pastures.

“From a retention driver, it’s not salary or benefits that’s the biggest retention driver. It’s helping people, especially early-stage career folks, identify what the career path in the company is and giving them the experience they want,” Morgan said. “People are leaving because they don’t know where their next move is.”

Smaller businesses in particular might not be able to keep up with the demands of filling open roles in a world where technology is quickly changing and online job postings are no longer enough.

“If you are a small business owner, you don’t have the time or money or resources to stay abreast of this because it’s changing really quickly,” Morgan said, adding it might be time for some businesses to consider outsourcing that work. “You are kind of doing this on your own.”

Economist Anirban Basu said one potential solution would be to dramatically expand legal immigration — or face the consequences of a decline in growth that could then threaten government services, as tax revenues fail to keep up with the cost of services. 

“What this really suggests is that America needs an antidote, and that antidote is stepped-up legal immigration into the country to expand more rapidly the size of the labor force,” Basu said.

Meanwhile, employers have to deal with a rapidly changing landscape that includes the push for flexibility in work schedules, the persistence of remote work and even demands for a four-day workweek.

But for those looking to get ahead of the curve, here are the six-figure jobs with the biggest growth potential.

Blog Written By: Andy Medici  From  Construction Dive

   Dive Brief:

• Fisk University in Nashville, Tennessee, opened a new 98-bed student housing complex composed of repurposed shipping containers earlier this month. The $4 million project was developed in partnership with Nashville-based The Bradley Projects.
• The new dorms were created in response to the historically black liberal arts college’s rising enrollment. The student body has grown by almost 70% in the past five years to over 1,000 students, according to Jens Frederiksen, Fisk executive vice president.
• The container units, which opened for new student move-ins on Aug. 5, make up the university’s fifth residence hall. Fisk is also building a new dormitory building, set to be ready for move-ins next fall. The shipping containers are meant to provide a more rapid solution to the university’s housing needs, Frederiksen told Multifamily Dive. 
  

  Dive Insight:

  The 40-foot-long containers are arranged in blocks of four, stacked two units high and two units wide, with wooden staircases leading up to the second-floor dormitories. The exteriors are solid blue and gold, matching the school’s colors.

  Inside, the units feature wood-like flooring, stainless steel appliances, recessed lighting and contemporary-style finishes, according to a unit tour posted on the university’s X, formerly known as Twitter, social media platform. “Once you walk into one,” Frederiksen said, “you forget that you’re in a shipping container.

  The facility was built by Archie, Missouri-based Custom Container Living and assembled by Nashville-based Certified Construction Services.

  While the units were meant as a stopgap measure, student feedback on the new dormitories, both on the design at the development stage and from residents just moving in, has been overwhelmingly positive, according to Frederiksen.

  “[We’re] dealing with a generation that is intrigued by innovation, sustainability and thoughtfulness about fixing problems along the way,” he said. And… [the units] look amazing.”

  

   

Even after the next new residence hall is completed, Frederiksen anticipates that the shipping container units will remain in use on campus. 

“I think it may end up being more permanent than people anticipated,” Frederiksen said. “If the current trend continues, we have some aging infrastructure on the residential side that we also have to tackle, whether it’s a matter of breaking down and rebuilding or some major deferred maintenance. The containers will give us that flexibility in the foreseeable future.”

New deliveries

The use of shipping container dormitories is relatively unique — two residence halls at the College of Idaho in Caldwell, Idaho, built in 2019, were the first U.S. projects of this kind. However, other types of housing developers have made use of both new and used shipping containers for the past several years. They are seen as a cost-effective, environmentally friendly alternative to new construction.

Many shipping container home projects in the U.S. are constructed for people experiencing homelessness, often in tandem with municipal governments. Examples include the Hilda L. Solis Care First Village in Los Angeles, built over a six month period in 2021 on a site owned by Los Angeles County’s Department of Public Works. The project, designed by Seattle-based NAC Architecture, is composed of shipping containers repurposed as 232 housing units.

Other affordable shipping container home projects include a five-story project in San Diego’s El Cerrito neighborhood, built by the Family Health Centers of San Diego, and the Signal Hill Studios in Kansas City, Missouri, built by Kansas City-based SBF Containers.

Blog Written By: Mary Salmonsen From Construction Dive

Dive Brief:

• Thirty-six percent of all U.S. bridges, more than 222,000 spans, require major repair work or replacement, according to the American Road & Transportation Builders Association’s 2023 analysis of the U.S. DOT’s National Bridge Inventory database. 
• Based on average cost data that states submitted to the DOT, ARTBA estimates it would cost over $319 billion to make all needed repairs. By contrast, the Infrastructure Investment and Jobs Act designates $40 billion in federal money over five years for bridge repairs and replacement.
• Bridges newly rated in poor condition this year include I-345 over I-30 and US 75 Dart Rail in Dallas, the Lacey V. Murrow Memorial Bridge in Seattle and the Route I‐678 span over Flushing Bay Promenade in New York City.

Dive Insight:

Happily, there are 560 fewer bridges in poor condition than last year. Over the past five years, the share of bridges in fair condition has continued to grow as the percentage of spans in poor or good condition declined. Thanks to increased federal investment, there is more money available to address these gaps — but many states are not taking full advantage, ARTBA’s analysis showed.

States currently have access to $10.6 billion in IIJA Bridge Formula Program funds to help make needed repairs, and another $15.9 billion will be available in the next three years. These funds have helped support over 2,060 bridge projects in the construction and repair pipeline, according to the ARTBA report. Another new IIJA bridge program, the Bridge Investment Program, has an additional $12.5 billion for projects that will be awarded through 2026.     

However, as the end of fiscal year 2023 approaches on Sept. 30, states have committed $3.2 billion — just 30% — of available bridge formula funds to 2,060 projects, with $7.4 billion still coming, according to ARTBA. Only eight states have committed more than two-thirds of their bridge formula funding to specific projects, while 31 states have committed less than a third of available money as of June 30.

In 2023, nearly half of all U.S. bridges — 48.9% — were in fair condition, while bridges in poor condition make up 6.8% of the overall inventory.  

Other bridges newly rated in poor condition this year include:

• NC 58 over the Intracoastal Waterway in North Carolina.
• I‐84 White Salmon over the Columbia River in Oregon.
• State Route 51 Northbound in Sacramento, California.
• LA 27 over the Intercoastal Waterway in Gibbstown, Louisiana.
• US 21 Southbound over Beaufort River in South Carolina.
• PR 53 over Grand De Patillas River in Puerto Rico. 
• SH 146 over Clear Creek and Shipyard Drive in Texas.

In an interview with Scripps News, Transportation Secretary Pete Buttigieg said there has not been sufficient funding for bridge repairs for many administrations, which has created a massive backlog.

“We’re taking historically large steps, but the work of reversing probably 40, 50 years of degradation or underinvestment is going to be more than a couple of years’ work,” said Buttigieg. “The important thing is right now we are moving it in the right direction so that instead of getting worse, it’s getting better.”

A 2022 Congressional Research Service report said it would take 20 years to eliminate the backlog of ailing bridges — but only if Congress maintained high funding levels. 

Blog Written By: Julie Strupp From Construction Dive

The U.S. construction market is starting to shift in the wake of less work from the private sector and ramped-up spending in industries like infrastructure and manufacturing, bolstered by federal incentives.

And while supply-chain issues and higher materials prices have normalized since the peak of the Covid-19 pandemic, inflation, higher interest rates and — most notably — labor shortages are challenging company leaders across the industry.

The Associated General Contractors of America, in partnership with Autodesk Inc., in its annual workforce survey released this month found 88% of construction firms are having a hard time finding workers to hire. More than 1,400 firms in the construction industry completed the survey in late July and early August.

General contractors are struggling to find not only skilled laborers, but also workers who have even basic skills to work in construction. According to the AGC survey, 68% of firms say applicants lack skills needed to work in construction.

The numbers come at a time when the construction industry is facing a generational skills gap, with its workforce aging up and fewer younger workers entering the market to backfill more-experienced positions. The median age of construction workers is 42, one year older than the typical worker in the U.S. labor force, according to the 2021 American Community Survey.

The construction industry had 363,000 job openings in July, according to the Associated Builders and Contractors and data from the U.S. Bureau of Labor Statistics. Industry job openings decreased by 23,000 from June but are up by 10,000 from the same time last year.

Even though starts have slowed — year-to-date through July, total construction starts were 7% below the comparable mark in 2022, according to Dodge Construction Network LLC — there’s still not enough workforce for the amount of work in the pipeline. In July, 4.4% of industrywide positions were unfilled, a share higher than one year ago and at the start of the pandemic in 2020, according to the ABC.

‘Money doesn’t seem to be the driving factor’

Several contractors spoke during a Sept. 6 media event hosted by AGC to talk about the challenges they’re facing in hiring and retaining workers — and the strategies they’re employing to try and fill those employment gaps.

Bill Ryan, workforce development and education coordinator at Dick Anderson Construction Inc. in Butte, Montana, said an overhaul of the company’s apprenticeship model has led to a surge in its retention rate, going from 20% to between 70% and 80% in the past two years. The program today includes, among other things, an opportunity for high-school students interested in construction as a career to work on job sites one or two hours after school.

Ryan said the company is spending upwards of $500,000 on training and education this year, an amount he expects to go up in future years.

He said it’s critical to understand the motivations of younger workers today and how construction can fit within those parameters.

“We’re finding out, from some of our younger employees, they don’t want overtime. Their motivation is free time, and what they get to do with their free time,” Ryan said. “We have to shift how to approach and work with the younger generation.”

Hal Fuglevand, vice president of operations support at Knife River Corp. in Billings, Montana, said despite increasing benefits, pay, time off and other incentives in recent years, it’s hard to fill open positions at his company.

Eighty-one percent of firms have raised base pay rates for their workers during the past year, the AGC survey found. Additionally, 44% said they’re providing incentives and bonuses, while 26% of firms say they have improved their benefits packages.

For a lot contractors, being able to rely on hired workers to show up to job sites has even become tougher.

“Money doesn’t seem to be the driving factor,” Fuglevand said. “[For] people that they are able to hire, it’s like a revolving door. [Workers] just won’t show up to a big concrete pour scheduled at 4 in the morning. Three guys out of 10 just don’t show up. … Maybe two show up the next day, but they know they’re not going to be disciplined,” because of how difficult it would be to replace those workers.

There’s also not enough affordable housing for the industry’s workforce, especially in a place like western Montana, Fuglevand said, making it tough to attract people to the area. Like other firms, Knife River has begun recruitment efforts in high schools.

Executives said more efforts need to be made at the federal level to address the shortage of workers in construction, including efforts to tap into the “hundreds of thousands of capable, willing workforce at the border,” Fuglevand said.

Kenna Smith, talent acquisition manager at The Branch Group Inc. in Roanoke, Virginia, said her company typically has more than 100 open positions a month. In the past six moths, that number has been closer to 150.

Positions that’ve become especially hard to fill include estimators, project engineers, and experienced equipment operators and trade workers. Branch Group has a program that does outreach in local elementary schools, an effort to try and change perceptions early on about what a career in construction could look like, Smith said.

She also referenced the revolving-door nature of her company’s workforce, noting retention efforts have become as critical as recruitment.

“We can’t keep bringing them in the door while two more are going out the door,” Smith said, adding Branch Group within the next month plans to hire an experienced learning and development specialist to get training initiatives across the finish line.

Skilled aspect of the labor pool is a pressing issue

The future is tough to predict as the economy slows in the wake of higher interest rates and as fewer developers take out construction loans, but labor is expected to remain a challenge in a potentially slower building market.

Andrew Volz, Americas project and development services research lead at Jones Lang LaSalle Inc., said in an interview with The Business Journals he consistently hears from contractors they’re not staffed at a level to cover even their current volume of work.

Much depends on a specific market and how much construction is going on there, he said.

“How many square feet of construction are going on in a given metro area and how many workers have they gained or lost since the pandemic?” Volz said. “In a lot of places, there’s a massive increase in the work available for every contractor. They’re not going to be able to cover it. That pipeline and ratio of work to worker is going to stay very high for the next couple of years.”

For much of the construction industry, there are scars from the global financial crisis in 2008, when development dried up and many construction workers left the industry permanently, Volz said.

With recession fears in play today, many companies are trying to be proactive about keeping skilled workers on their payroll even if construction activity slows.

JLL predicts total construction spending will be up about 6% year-over-year, thanks largely to projects in manufacturing and infrastructure boosted by federal incentives.

Volz said wages in construction will likely continue to go up — JLL is predicting a 5% to 7% annual increase this year — but the skilled aspect of the labor pool remains a pressing issue.

“We have folks who are more willing to move crews across state lines simply to get their specialized work done, whereas before, they’d be willing to work with local talent,” he said. “It’s a different world there. There needs to be an investment [at] the entry level — upskilling and growth of a new cohort of skilled labor.”

The construction industry is not invulnerable to the challenges posed by inflation, labor shortages and supply chain disruptions. With terms like “recession” and “economic downturn” being thrown around, many contractors are concerned about how these issues will affect their business in the coming months and into 2024.

Unfortunately, experts anticipate continued slowdowns in construction due to supply chain bottlenecks, rising costs and high-interest rates. Since these challenges aren’t likely to be resolved any time soon, the best thing contractors can do is become aware of the industry’s top concerns and identify solutions to keep their projects on track.

Current Industry Challenges

The construction industry is an essential part of the world economy and has proven that it can endure and thrive in even the most challenging circumstances. The question isn’t whether the construction industry will make it through the difficulties ahead, it’s how well individual companies will fare.

Fortunately, knowing what issues the industry faces can help contractors plan for success.

Labor Shortages

Companies across all industries are struggling to hire and retain good workers, but the construction industry has been hit particularly hard.

Demand for construction workers is at an all-time high but the number of skilled workers is lower than ever. This has been felt industry-wide, with last year’s Associated General Contractors of America survey showing that 91% of contractors reported having trouble filling positions. What’s more, the industry will need to hire an estimated 546,000 additional workers to meet production demands in 2023 into 2024.

Supply Chain Disruptions

The supply chain is still recovering from the massive bottleneck caused by COVID-19. Additionally, U.S. contractors are feeling the strain of the Build America, Buy America Act, which impacts federally funded construction projects and requires that more parts and materials be purchased in the United States. Unfortunately, many companies have had challenges attaining U.S.-made materials due to a current lack of manufacturing capacity for certain items.

Together, these issues are creating unprecedented material wait times.

Inflation and Material Costs

According to Associated Builders and Contractors, construction input prices have increased by 37.7% since 2020 and since last year, they’ve increased by 4.9%. While this might sound bleak, the year-over-year increase has improved significantly from 2021, which was up 23.1% from 2020.

Although the cost of some materials has dropped steadily over the past year, like lumber and softwood lumber down 12.3% and 44.1% respectively, other materials have seen a sharp increase in recent months. Concrete products are 14.8% higher than last year.

Construction machinery and equipment is up 12.2% since last year, which has contributed to the growing popularity of construction equipment rentals.

Thriving During Uncertain Times

Settling into the new norm is the only realistic option right now, which means contractors are looking for ways to cut costs, protect their assets and stay ahead of potential losses.

On the bright side, many economists and contractors have been through similar economic downturns in the past, with many believing the economy is still strong enough to keep the industry out of serious trouble. Their experience can help others in the industry get a handle on what’s needed to not only survive but thrive in the current climate.

Stay Informed

By keeping up to date with industry issues and trends, contractors can get ahead of challenges and adjust their strategies accordingly. Articles, analyst reports and newsletters help keep the industry informed and working together.

Plan for Setbacks

Supply chain challenges mean that even the most diligent contractors are likely to get hit with parts shortages and delays. The tips below can help increase the chance of success:

• Place orders earlier to minimize delays.
• Develop a contingency plan for material shortages or delays to help keep projects on schedule.
• Shop around for backup vendors, subcontractors and better rates.
• Deploy security cameras and professional monitoring services to safeguard purchased materials.

Focus on Workers

Maintaining a strong business during these uncertain times depends on project completion, and those projects depend on workers. That means finding and retaining skilled employees must be a major focus moving forward.

Tips to Attract and Retain Good Workers

1. Offer Competitive Pay – Prospective employees are looking for a decent paycheck, but they’re also making judgments on the company’s quality based on what they’re paying. Highly skilled workers’ expectations are higher, which means companies who offer competitive pay and benefits are likely to attract higher-quality workers.
2. Focus on Diversity – Women, minorities and military veterans are all underrepresented in the construction industry. Interestingly, a study by McKinsey & Company found that companies with higher gender diversity were 25% more profitable than less diverse companies.
3. Look for New Recruitment Opportunities – Participating in job fairs and trade shows can be a great way to attract workers from both inexperienced and skilled backgrounds.
4. Build a Supportive Work Culture – It’s simple: Good workers stay at companies that are good to work for. Providing a safe and enjoyable work environment with opportunities for advancement is a great start. Workers want to feel like they’re valuable members of a cohesive team, and they’ll often thrive when they’re set up for success.

Prevent Loss

Preventing the loss of valuable materials is essential to maintaining a profitable business, particularly when costs are so high. This means that once materials are on site, contractors must make ensure they’re safe from theft and damage.

One of the easiest ways to prevent losses is using cameras on your job site. Many insurance companies offer discounts to contractors who deploy security cameras and professional security monitoring on their projects.

Ultimately, building a safeguard against profit losses is one of the most effective steps a contractor can take to protect their company.

Even in these uncertain times, the construction industry has staying power and so do the contractors who represent it. By staying ahead of challenges, working together, cutting costs and maintaining hope for the future, the industry is likely to come out stronger than ever.

Written by Sensera Systems with Construction Dive

Dive Brief:

• A bill proposed last week by six Republican senators would require all employers to use the U.S. Department of Homeland Security’s E-Verify program to authorize employment eligibility and would increase the national minimum wage from $7.25 an hour to $11.
• Titled the Higher Wages for American Workers Act, the bill proposes a phased expansion of E-Verify that would require employers with 10,000 or more employees to use the system beginning six months from the date of enactment. Smaller employers would be categorized based on the size of their workforces, and each category would have a corresponding deadline to begin using E-Verify, an online federal system that allows employers to confirm the eligibility of employees to work in the U.S.
• The bill also would increase penalties for employers that employ unauthorized workers and would permit DHS and the Social Security Administration to establish a self-verification process through which individuals may verify their employment eligibility.

Dive Insight:

In a statement, co-sponsors Mitt Romney, R-Utah, and Tom Cotton, R-Ark., said the measures are intended to address illegal immigration. The pair introduced a similar bill in 2021 that failed to advance.

“Our proposal would raise wages for millions of workers without risking jobs, and tether the wage to inflation to ensure it keeps up with rising costs,” Romney said. “Additionally, requiring employers to use E-Verify would ensure that the wage increase goes to legal workers, which would protect American jobs and eliminate a key driver of illegal immigration.”

Ten states currently have E-Verify requirements for private employers. When Florida’s law was enacted this summer, proponents said it would protect jobs and contribute to national security, but others predicted a tough road ahead for employers and workers alike, especially in construction. In 2020, there were an estimated 1.4 million foreign-born, non-citizen, Hispanic laborers in the U.S., according to CPWR — the Center for Construction Research and Training.

For employers in Florida the law brings unpredictability at a time of high labor demand and a shortage of workers.

“There’s great uncertainty as we sit here today,” Mark Neuberger, a Florida-based labor and employment attorney at Foley & Lardner LLP, told Construction Dive. “It could all settle down or it could be disastrous.”

Industry reaction

Brian Turmail, vice president of public affairs and strategic initiatives for the Associated General Contractors of America, said the association supports E-Verify — if its use is paired with other reforms, including the establishment of a temporary guest worker program for the construction industry. 

Calling the current national approach to immigration “extremely flawed,” Turmail said federal officials have long put the responsibility for checking workers’ legal status on employers — where he said it doesn’t belong.

“At least E-Verify gives them some ability to do that,” he told Construction Dive. “But make no mistake, expanding E-Verify does not compensate for the lack of broader, desperately needed immigration reforms. These include better border security, the establishment of a guest worker program and providing some kind of path to legal status for the undocumented workers currently in this country.”

What’s next?

While the future of the Senate legislation is uncertain, if the bill becomes law, its implementation will be slowly rolled out. Beyond the requirement taking effect within six months of passage for firms with more than 10,000 employees, companies with between 500 and 9,999 employees would be required to begin using E-Verify beginning nine months after enactment. The timeframe is expanded to one year for employers with between 20 and 499 employees and to 18 months after enactment for all other employers. 

Employers that begin operations after the bill’s enactment would have one year to comply.

The bill’s minimum wage increase provisions would also be implemented in a phased manner. The federal hourly minimum wage would be increased to $8 on the effective date, followed by increments of less than $1 each year until reaching $11 four years after the effective date. Thereafter, the minimum wage would be indexed to inflation every two years.

Blog Written By: Jennifer Goodman at Construction Dive

Houston-based Fidelis New Energy has started development and launched permitting for a $2-billion hydrogen production plant in West Virginia. It will power an associated data center megasite as well as industrial manufacturers, transportation companies and utilities. The energy company said the Mountaineer GigaSystem in Mason County would produce blue hydrogen from natural gas and store CO2 emissions underground on state-owned property, with its first phase to open in 2028. 

Fidelis has finalized with state officials an operating agreement for sequestration pore space and targeted storage capacity. It selected Battelle Carbon Services in early September to drill and collect test well data and submit sequestration permit applications, and has a letter of intent with Babcock & Wilcox to evaluate, develop and deliver four hydrogen production plants at the site using biomass and natural gas. 

Even as a boom in manufacturing construction continues across the country, several multibillion-dollar projects have hit unforeseen roadblocks in recent weeks.

Scout Motors, an American automotive company and subsidiary of Volkswagen Group, recently paused pre-construction site clearing activity that had begun early at its $2 billion electric vehicle plant in Blythewood, South Carolina, according to the company. Concerns from environmental groups and state and federal agencies around wetland development caused project teams to hold off further construction work while permitting moves forward, according to a statement shared with Construction Dive.

Meanwhile, battery manufacturer American Battery Factory postponed construction of its $1.2 billion lithium phosphate battery factory in Tucson, Arizona, until November, according to a Pima County board of supervisors meeting on Sept. 5. Project teams originally pegged construction to begin in September, but decided to delay work by a couple of months due to additional geotechnical assessment and surveying.

Geotechnical assessments are often needed to identify the type of earth that exists below the ground. Once complete, that data will support design work of the gigafactory.

These developments follow the July announcement from TSMC, a Taiwan-based semiconductor company, to push back the opening of its Arizona chip factory until 2025 due to labor issues, said Mark Liu, TSMC chairman. Labor shortages, combined with COVID-19 surges and licensing problems, had already caused a three to six-month delay on the $40 billion project.

These construction pauses come at a time of historic reshoring of American manufacturing, spurred by the $52.7 billion CHIPS Act and $485 billion Inflation Reduction Act, both signed into law by President Joe Biden in August 2022.

While the causes for delays on these projects are varied, experts say they mainly boil down to two broad categories: the challenge in finding workers, and the glacial permitting process required to build these structures safely.

Specialty labor shortages

Multibillion-dollar manufacturing projects require special construction techniques, including sophisticated electrical work or the need for “hyper clean spaces” that differ from typical construction projects, said Brian Turmail, vice president of public affairs and strategic initiatives at Associated General Contractors of America.

But that degree of speciality is slowing completion schedules down as projects search for qualified labor.

About two-thirds of contractors reported many construction worker candidates lacked the skills needed to be employable, said Stephen Sandherr, AGC CEO.

“Unless federal officials begin to narrow the funding gap between college prep and career training the construction industry will continue to struggle to find workers,” said Sandherr. “It is great that federal officials want to invest in construction projects, they also need to invest in construction workforce development.”

Additionally, more than 70% of manufacturers are struggling to attract and retain a quality workforce, according to a new report from the National Association of Manufacturers.

The report, based on a survey of manufacturers, also called for permitting reform to help streamline the construction process.

Nearly three-quarters of survey respondents said that permitting reform — which would simplify and speed up the approval process for new projects — would be helpful to their manufacturing company, allowing them to hire more workers, expand their business or increase wages and benefits.

Dive Brief:

• Amazon plans to invest $3.5 billion to establish new data centers in New Albany, Ohio, according to a press release shared with Construction Dive.
• The new data centers will support computer servers, networking equipment and the AWS technology, while the increased tax revenue from the expansion will support schools, essential services and infrastructure investments such as local parks and roads, according to the release.
• The investment in New Albany marks the initial part of Amazon’s $7.8 billion commitment to expand data centers in the state, which was first announced by Ohio Gov. Mike DeWine and Lt. Gov. Jon Husted in June.

Dive Insight:

Amazon is not the only tech giant to identify New Albany as an up-and-coming data center hub.

Google also announced in August a $1.7 billion investment into its three Ohio data center campuses, one of which is in New Albany. The tech company selected the site due to its ample land, water supply, low natural disaster risk and aggressive tax incentives.

Major data center operators and hyperscalers, like Amazon and Google, continue to show interest in the Columbus market, including nearby cities like New Albany, Hilliard, Dublin and Delaware, Ohio, according to a data center market report from Dallas-based real estate services firm CBRE. 

Those markets attract data center players because they sit between major developed data center hubs, including Northern Virginia, Atlanta and Chicago. 

Additionally, over 50% of the U.S. population lives within 750 miles of Columbus, which is advantageous for clients wanting to build and develop near end users, according to the CBRE report.

Amazon’s data center projects in Central Ohio represent the second-largest private sector corporate investment in Ohio’s history, behind only Intel’s $20 billion investment in January 2022 to build its semiconductor facility.

Written by at Sebastian Obando at ConstructionDive

Dive Brief:

• Backlog declined to nine months in September even as contractor confidence remained high, according to a Tuesday release from Associated Builders and Contractors.
• The group’s Construction Backlog Indicator fell 0.2 months from August’s reading of 9.2 months and was unchanged year over year.
• Large contractors felt the dip the most, according to an ABC member survey conducted Sept. 20 to Oct. 4. Those with revenue of more than $100 million lost 3.2 months compared to August’s backlog, falling from 13.8 to 10.6 months.

Dive Insight:

Despite the decline in backlog, ABC’s Construction Confidence Index reading for sales and staffing levels edged higher in September while the profit margins reading fell slightly. All three readings remain above the threshold of 50, indicating expectations for growth over the next six months, the release said.

“Construction continues to defy the downward gravitational pull of tightening credit conditions,” said ABC Chief Economist Anirban Basu. “Despite high and rising project financing costs, ABC contractor members continue to report lofty backlog, rising employment, expanding sales and stable profit margins.”

Construction Backlog Indicator

Nevertheless, industry headwinds are growing, Basu said, calling out political dysfunction on Capitol Hill, rising labor costs and lingering supply chain issues along with the rising cost of financing. The U.S. economy appears ready to slow further, he said. 

“If the past is any indication, that will eventually catch up to construction in the form of dissipating demand,” he said in the release. “But economists have talked about recession for more than a year, and the industry still shows substantial forward momentum. It remains to be seen whether that momentum can survive the latest set of challenges.”

Though it declined last month, the South continues to have the lengthiest backlog in the U.S., a trend since October 2021. Over the past year, only the West has experienced increasing backlog, ABC said.

Blog written by Jennifer Goodman through ConstructionDive