5 minute read
Eye on the Future
EYE on the Future
By / Don Procter
SMACNA and SMART professionals with an eye for technology will make the greatest strides, says New Horizons Futures Study. Are you prepared?
The industry’s identity is evolving with new market sectors unfolding and technological leaps changing the way of business. Just how far will it all go? Many of the industry scenarios – including projections for the next five to 10 years – are outlined in the 2016 HVAC and Sheet Metal Industry Futures Study.
Tom Soles, executive director of both SMACNA’s member services and the New Horizons Foundation, says many of the 2016 study’s projections have been accurate.
SMART’s Director of Craft Services, Charles Mulcahy, agrees and sees this as an important time for members to listen up. “It’s not a time to embrace the good old days,” he says. “Contractors have to look to new technology and work with their local training center and union to make sure they are on top of new market sectors.”
The study is based on research conducted by Continuum Advisory Group (CAG) that included numerous in-depth interviews with sheet metal contractors, HVAC equipment manufacturers, and other industry professionals. New market sectors and technology are highlight findings noted by CAG, which is a multi-national management consulting firm that works around the globe in the building and construction industry.
Among those findings is that the “solutions first” approach to buying construction services is growing. Contractors that take a solutions-first approach to HVAC systems do an assessment of an owner’s total building needs now and over the long term. Less focus is spent on specific equipment and its upfront costs.
Soles says focus in this area isn’t surprising. Customers traditionally seeking the low bid are paying more heed to contractors solving long-term issues. “It’s a very important piece of business for sophisticated customers,” he says.
Soles expects a rise in medium-sized sub-subcontractors from the HVAC and sheet metal sector to enter the solutions first game. “Among the data centers, the Amazons, the Googles . . . you are starting to see more SMACNA members doing that kind of work.”
Mulcahy adds the industry will continue to see more work in building enclosures—particularly in architectural sheet metal.
Nate Scott, a principal of CAG, says owners will be the “big driver” for prefabrication and modularization, but growing labor shortage is also pushing the sector. CAG’s research indicates that prefabrication is preferred by some owners geared to lean construction—an approach that could gain ground in years to come.
Soles points out that, depending on the job and location, even smaller and medium-sized contractors will participate in prefabrication. Collaboration with various trades—piping contractors, for example—is paramount.
Modularization for mechanical work will grow in the industrial sector, more so than in the commercial world, Mulcahy says.
Training for prefabrication will be aided by new software and BIM. The data is transferred to the field largely through augmented and virtual reality, says Soles. BIM design work in the shop translates smoothly into the field. Even the smallest contractors will see the benefits of taking that technological step.
By 2016 the hold that large sophisticated contractors had on BIM was weakening as the technology gained a wider market. “We see that continuing,” says Clark Ellis, principal of CAG.
Ellis says BIM is used more effectively to help leverage modularization and it is integrated into scheduling and budgeting agendas. “Like any trend, at some point you have to up the ante to continue to ride the advantages as the market catches up,” he says.
Ellis adds that architectural firms slow to adopt BIM are being pushed by young architects educated in BIM and 3D modeling in school. “In order to attract top talent, it’s difficult for a design firm to ask new hires to work in CAD and 2D,” he says.
A similar shift is occurring in construction as young tech graduates choose “technologically-relevant and forwardlooking” contractors. “It is a factor that will even push small companies to change,” Ellis says.
Mulcahy says the use of BIM is important in architectural sheet metal work, a promising growth sector over the coming decade. “We have to master BIM technology,” he says. “We can’t run from it because if we do our open shop competition will certainly take advantage.”
CAG Principal Mona Haggag says from discussions with SMART and SMACNA, software programs that connect builders with subs, engineers, and architects (Bluebeam is an example) are an important focus. Estimating software is a case in point. “Previously, there was a reliance on an internal checklist,” Haggag says.
CAG is conducting a research study for the New Horizons Foundation that covers the Internet of Things. It sees more startup companies offering SMART technology entering the service end of the HVAC supply chain.
Mulcahy points out that sophisticated customers are buying equipment directly from manufacturers who monitor the equipment and provide servicing. That trend is leaving mechanical contractors on the sidelines. “That could be a bit of a sea change for us,” he says. “I don’t know how you overcome it because we don’t build equipment.”
In 2012 when the first version of the HVAC and Sheet Metal Futures Study was released, rising energy costs were projected to be a major driver of building construction and design change, including the demand for HVAC services. That didn’t happen. Research shows that key drivers for design change are energy codes and a crop of young emerging engineering and specifications professionals focused on building efficiency, Soles says.
Clark adds that while the current federal government has backstepped on energy regulations, energy-efficient designs continue to progress, led by regulations and codes from forwardthinking states and municipalities. “It’s happening but in a less unified way than under the previous federal government,” Clark says.
An example is regulation to improve indoor air quality in schools – primary to grade 12 – driven by state governments. “It’s a place where our contractors should be very successful,” Mulcahy says.
While economic projections suggest continued construction growth at least for the next two years, that does not include major infrastructure programs (transit hubs, for example) which, when announced, will offer ancillary benefits to the HVAC and sheet metal sector, Soles says.
CAG’s research findings see construction markets over the next decade spreading deeper into the south (Florida, Georgia, and the Carolinas, for example) and western states such as Oregon and Washington. Scott adds, however, that some regions in the north have done better than expected since the 2016 study. Michigan is a case in point.
Mulcahy adds there is a migration of auto-manufacturing plants in the south in right-to-work states where open shop contractors thrive. “We have to market more – particularly in the southeast where the growth is happening – that we are an alternative,” he says.
Soles sees a continued shift away from the design-bid build job to collaborative agreements (design-build integrated project delivery). “It’s going to filter down to more of the mid-sized jobs,” he says, adding straightline sheet metal contractors are seeing more work in design-assist contracts.
More than $10 billion spent in less than a decade on new technologies in construction is helping to push the industry into a new era, Soles says. “The construction industry is tired of seeing that it is has the lowest productivity ratings as opposed to manufacturing, farming, and other industries,” he says. “We are finally waking up.” ▪
A freelance writer based in Toronto, Don Procter covers the building, design and planning industries in Canada and the U.S. Away from the office, his pursuits include the ongoing restoration of his centuries-old home, cooking for family and playing in a blues band.
