4 Construction Trends in 2023…

…and what you can do about them.

Running your own construction business is no joke, and the instability of the last couple of years has been exhausting, right?!  What else can come down the pipeline?  And, more importantly, how can you prepare for them?

Here are four construction trends for 2023 and what you can do about them.

1.      Rising cost of materials

Although some prices for materials have begun to stabilize, inflation and ongoing supply chain issues cause unpredictable pricing for most of what you need. For example, with cedar siding, STK prices are stabilizing, but less available VG is increasing.  

How can you budget when there’s so much instability? 

Here are a couple of suggestions:

·        Reevaluate your contingency.  You may have a 5-10% contingency built into your budget.  Does that need to change?

·        Find alternative materials.  Many of our customers order Western Red Cedar as siding for their homes.  However, Incense Cedar, which is very similar, is currently 10% less than Western Red Cedar.  Can your vendors recommend cost-effective alternatives?

·        Negotiate for a better rate.  Some of our customers take advantage of quick pay discounts.  Other vendors may offer discounts.  It doesn’t hurt to ask.

·        Lock in current prices by ordering early.

2.      Labor shortage

You need skilled labor on the construction site.  However, during the Great Reshuffle, many construction professionals near retirement age left the workforce, and younger workers haven’t considered the construction industry.  We’re now experiencing a labor shortage.  How can you find the skilled labor you need to get the job done?

Have you considered:

·        Referrals.   Ask your team, other contractors, and sub-contractors, and use CA-TT’s directory for referrals.  Who do they know that has the skill set you need?

·         Apprenticeship.  Some employers apprentice inexperienced team members and teach them the skills they need to succeed.  You may remember someone who did that for you.  It’s an investment that produces high quality laborers who are loyal.  Apprentice an unskilled laborer into a trade.

3.      Rising labor costs

This trend continues, and it’s one of your biggest line items.  Here are a couple of things that might help:

·        Choose the right employee or subcontractor for the job.  You need people who understand what you’re asking of them and get it done right the first time.  Fixing mistakes is costly.

·        Pay good workers more than the going rate.  It sounds counterintuitive, but it saves you time, frustration, and, ultimately, money in the long run.  Firing, hiring, and putting up with mediocre laborers is very expensive.  While a well-paid, good laborer brings a return on your investment.

4. Technology use

Using suitable software and technology reduces labor costs and increases efficiency.  For example, CoConstruct, an all-in-one construction management software, lets you track your projects from start to finish.

Knowing what’s coming down the pipeline and preparing accordingly can help you succeed in your business.

Here’s to your success in 2023!

Contact Pacwood at (530) 262-6262, sales@sidingdirect.com.