The Contractor's Compass - January 2022

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F E AT U R E Global Construction Outlook 2022 by Duane Craig, writer

Global construction industry trends in 2022 include a generally favorable economic outlook along with some challenges that are expected to continue. In the U.S., the American Institutes of Architects’ Consensus Construction Forecast predict non-residential construction will grow 4.6% in 2022, while a 9% growth is expected in the residential sector, according to Oxford Economics and ConstructConnect forecast . Across the European Union construction will grow from 1.5% in Spain to 3% in France and the Netherlands. The average growth across the EU is projected at 2.7%, while the United Kingdom is looking at 6.3%. Construction worldwide is predicted to grow 3.7% in 2022 according to the Construction Intelligence Center, with the largest share of growth to happen in the Asia-Pacific region and China. The fastest growth is expected in SubSaharan Africa, including Ethiopia and Eastern African countries. A recent report by the Housing Industry Association in Australia T H E

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warned of a slowdown in Australian residential construction starting mid2022, and Master Builders of Australia predicted the sector would enter negative territory next year. The red hot housing markets that have been spurred by grants for building and renovating are expected to slow down in the face of market saturation and rising costs. Master Builders also expects commercial construction in Australia to drop. In Canada, the 2022 construction growth is projected at 16.4%, with residential seeing 5.5% growth and nonresidential at 23.6%. Beyond macroeconomics and the potential effects of unknown monetary and public policies, a couple of operational trends could put a damper on the expected growth, while another trend could help minimize their impact.

Labor and Skills Shortages On the global scale, construction faces growing labor headwinds from decades of low productivity. According to McKinsey, “poor project management and execution, insufficient skills,

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inadequate design processes, and underinvestment in skills development, R&D, and innovation” are the chief causes for the productivity problems. Every area has its own culprits. For instance, the U.S. construction industry has struggled with labor problems for decades. The national emphasis on fouryear college being a must for all, along with construction’s reputation as dull, dirty, and dangerous, the industry’s inability to establish a reliable labor pipeline, the decline of unions, and the lack of political will to promote trade education all but hollowed out potential pipeline of construction employee candidates. Then came the great recession, political and cultural battles over immigration, and a pandemic. It’s no wonder construction finds itself in worse shape than ever regarding its labor potential. Besides a numbers issue, it’s also a skills and experience issue since long-term employees head for retirement.

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