The main findings from the latest Marcum National Construction Survey contain no surprises. The survey indicates the construction industry has been navigating stormy waters for more than a year now. The storm is caused by inflation and rising interest rates, as well as the current state of the economy.
The most concerning finding is that 50% of survey respondents predict their projects will be delayed or canceled. Usually, construction will pass higher costs to customers. Unfortunately, more than half expect they will struggle to do this.
It’s unlikely financing will help, as most rated the ease of financing at 4%, which is down from 19% in the previous year. Obtaining bonding is another barrier. These responses are troubling for construction companies that have little capital. The survey reports that 80% of the respondents are working on cash flow management, and almost 60% are preparing for a potential recession.
The skilled labor shortage continues to be a problem with almost 40% indicating this as their biggest challenge in the year ahead. This is an increase from 27% in 2022. Labor costs have essentially doubled.
Despite the bad news, the industry remains tough. Only about a third of the participants predict they’ll have a lower backlog. The ones who believe they’ll have a higher backlog are at 41%, which is a slight drop from the previous survey.
There is finally some good news regarding the supply chain. Signs point to an improvement. Along with this, the material costs have finally stabilized. All this said, what does this mean for construction?
How Some Construction Firms Adapt to the Economy
Even though the supply chain and material costs may be steadying, construction firms still must be prepared for higher costs and lead times. This is especially true where American-made materials are concerned as companies comply with Buy America regulations.
Contractors may need to review their supply chain and possibly restructure it to cut delays and inefficiencies. Consider partnering with American manufacturers and expanding the domestic supply chain. Experts advise staying current and familiar with Buy American regulations.
Some clever construction firms thought ahead by stockpiling materials and parts whenever they became available. A few rented a warehouse or storage unit to store their overflow of materials. The drawback to this innovative solution was that they were paying twice to transport the materials. The first time, they paid for the materials to go to the warehouse. The second time, they paid to transport the materials from the warehouse to the jobsite.
During the time they stockpiled, they may have paid higher prices for the materials. This approach had both advantages and disadvantages. While it meant paying for storage, it could pay off in the long run because it helps them minimize their backlogs and increase their chances of finishing projects on time and within budget.
If they were able to do some prefabrication, it may have saved time. They may have built a partnership with these warehouses and negotiated a deal that works to the benefit of both parties. Many variables come into play in determining the outcome or costs associated with choosing to stockpile.
Some construction businesses have established joint ventures to collaborate and share capabilities and resources. This move helps ease the labor shortage. However, before considering a joint venture, understand all that it entails.
For one, there will be more paperwork involved in projects. It could be that the shared risk makes the effort worth it to mitigate risk. But it’s possible the two partners will have to create a new entity and deal with all that it involves. The key to ensuring a successful joint venture is to hire the right lawyer.
How Construction Companies Can Be Resilient
Even with the supply chain and cost of materials steadying, it’s critical to retain your assets. That’s because construction materials, especially copper, continue to be a target for thieves. Organized crime rings have the resources to pull off sophisticated crimes to steal copper. This isn’t an easy offense to commit because it’s dangerous. Some crime rings know how to swipe copper while avoiding electrocution.
Safety is always a priority in this industry. The labor shortage can put construction firms at risk of safety incidents. Between rising crime and safety issues, the construction industry needs training and proactive security to increase worker safety and protect their expensive assets.
Training
Investing in training and education can be a way to recruit new workers who don’t have experience. This can be a valuable way to reach out to those who may have lost their jobs due to the after-effects of the pandemic and the state of the economy.
The U.S. Bureau of Labor Statistics Occupational Outlook Handbook states that formal education is usually not required for construction laborers and helpers. This is an opportunity to reach out to high school graduates who opt out of college. They can learn their trade in short-term on-the-job training.
Training is also key to increasing safety. Hence, providing training on a regular basis makes a difference. In fact, companies that go the longest without a workplace incident consistently conduct safety training.
It can be as simple as a 5-minute safety session at the start of the workday. These quick “training updates” can cover wearing the right personal protective equipment for the right tasks, how to properly start up and shut down equipment, how to prevent heatstroke, and other topics affecting safety. Everyone has a role to play in ensuring the safety of the jobsite. It’s critical to urge employees to adhere to a “see something, say something” mentality and reassure workers there will not be any backlash for calling out potential issues.
Construction security
Video surveillance with remote monitoring is a proactive security technology that helps reduce the risk of theft on construction sites while simultaneously helping to increase overall site safety. This technology can help deter pilfering, reduce the need to replace stolen materials and equipment, and lower the risk of injuries and liability concerns.
Remote video surveillance combines two components: video analytics and highly trained monitoring operators. Monitoring many screens for hours can be a mind-numbing task, and it’s not easy for humans to catch everything. That’s where the power of video analytics comes in. It takes on a lot of the tediousness to increase the possibility of spotting a problem. However, analytics can’t be 100% certain it sees a safety hazard or a crime in progress. That’s where humans have the advantage. A human can determine how to solve the problem, take appropriate steps, and communicate with the right people.
Located in a safe building away from the construction jobsite, the trained monitoring operator watches key areas throughout the site. They aren’t in fear for their lives should an event occur onsite, which ensures they can react calmly and take appropriate action for the situation. The monitoring operator can activate audible onsite alarms, warning intruders that they are being recorded and that police are being dispatched via onsite speakers. Sometimes the verbal warning is enough to send suspects scattering from the jobsite.
Unfortunately, there are more brazen thieves who ignore warnings. This is when police intervention may be necessary. Fortunately, the police will typically respond faster to calls from sites with remote video monitoring than they would with a traditional security system. That’s because they know companies like Stealth Monitoring have video verification.
The monitoring operator provides updates to the emergency dispatchers as law enforcement makes its way to the jobsite. Additionally, the security technology saves all recordings for later review. These recordings can be used to provide evidence for active investigations.
Remote Video Surveillance Can Help Construction Cash Flow
Video surveillance with remote monitoring can help identify potential safety and security problems before anything happens. This is what makes live video monitoring a proactive safety and security solution. Video analytics and trained monitoring operators can observe surveillance strategically placed throughout the construction project. As soon as a safety or security issue is discovered, the monitoring operator can contact the proper person or authorities. Recordings of activities can also prove useful.
Security cameras with monitoring and an access control system can help protect expensive assets and increase overall site safety. The high cost of materials and equipment more than justifies the cost of security technology that can help deter crime and minimize injuries.
Remote video surveillance is more affordable than you think. Stealth Monitoring’s construction clients often get a return on their investment within months. If you’re not sure what’s right for your construction firm, interview security consultants with experience in construction and ask questions.
A Stealth security consultant can review your requirements and property to design an effective surveillance camera system that fits your requirements and budget. Use this video surveillance checklist to help you find the right security vendor.
Our security consultants have designed security systems with video surveillance on jobsites across North America. This includes those out in rural areas where the connection may not be as strong. There is a mobile surveillance option available. This solution allows for cameras to be mounted to almost any pole, flat surface, and jobsite management trailer. This system can be deployed quickly.
Whatever video surveillance solution you choose will help you weather the rising costs and economic challenges while delivering a fast ROI.
To delve deeper into construction security, check out the construction security and safety best practices guide. This construction security guide discusses industry challenges and offers solutions. If you’d like to learn more, look at this case study on how remote video surveillance deters theft or contact us.
Texas Private Security License Number: B14187
California Alarm Operator License Number: ACO7876
Florida Alarm System Contractor I License Number: EF20001598
Tennessee Alarm Contracting Company License Number: 2294
Virginia Private Security Services Business License Number: 11-19499
Alabama Electronic Security License # 002116
Canada TSBC License: LEL0200704
