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A Look at Construction and Infrastructure

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While many areas of construction continue to surge, one is beginning to show some signs of weakness. Certainly, higher interest rates, rising inflation, and the looming recession are factors for all sectors of construction, but so far, they have not impacted all sectors of construction to a high degree. Ultimately, construction companies will need to adjust business processes and technology adoption, as we move further into 2022.

The numbers tell an interesting story. Total construction starts rose 3% in April to a seasonally adjusted annual rate of $945.8 billion. Breaking it out by segment, nonresidential building starts rose 6% and residential starts increased by 4%. Meanwhile nonbuilding starts—infrastructure—fell 4%.

Looking closer it’s clear what is happening with infrastructure. Starts in the environmental public works category rose 8%, while utility/gas plant starts moved 10% higher. Starts for highway and bridge projects fell 14% and miscellaneous nonbuilding starts dropped 2% during the month. Through the first four months of the year, total nonbuilding starts were 2% lower than in 2021. Highway and bridge starts gained 28% through four months and environmental public works projects were 2% higher. At the same time, miscellaneous nonbuilding and utility/gas plants starts dropped 37% and 39% (respectively) through four months.

It’s interesting that this comes in the wake of the Infrastructure Investment and Jobs Act. The five-year $1.2 trillion Infrastructure Investment and Jobs Act aims to rebuild America’s roads, bridges, and rails; expand access to clean drinking water; ensure every American has access to high-speed internet; invest in passenger rail; build a national network of EV (electric vehicle) chargers; upgrade our power infrastructure; invest in communities; and tackle the climate crisis.

While there are myriad reasons for the rise in nonresidential building starts and residential starts and the dip in nonbuilding starts, we know technology can be the solution for both.

For example, a challenge in capital projects is prioritizing projects in order to direct the money. This is something we have been saying here for years. Old, manual ways slow this down even further. Technology is essential to plan projects and get them off the ground faster.

The same is true for nonresidential and residential projects that are moving at warp speed. Contractors need technology in order to keep fast-paced projects on time and on budget. Naturally, adoption will require a shift in process, which can be a challenging upfront hurdle to overcome.

All in all, technology is the solution to most challenges that exist in the construction industry today. Now, it is just a matter of adopting it—which is, of course, not an easy feat.

Want to tweet about this article? Use hashtags #construction #IoT #sustainability #AI #5G #cloud #edge #futureofwork #infrastructure 

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