2023’s business landscape hasn’t been easy to navigate, but opportunities don’t wait until you’re ready. Despite the hiring challenges and inflationary pressures plaguing the construction industry, many business owners made great strides by simply keeping their focus off the headlines and on their growth plans.
Operating a successful business means identifying trends and positioning yourself ahead of them before your competitors have a chance to catch up. Here are five trends that National Business Capital noticed across the construction industry in 2023 that will likely carry over into 2024.
Construction Industry Trends (2024)
1. Equipment, Equipment, Equipment
From wearable equipment to mining dump trucks, it’s no secret that equipment is the key to succeeding in the construction industry. Technology will undoubtedly shift how the industry approaches each project, but the tried and true ways of making it happen are still as important as ever.
At National Business Capital, we’ve seen an increase in construction businesses purchasing equipment and leveraging the Section 179 tax deduction to lower their 2023 tax liability. In short, the deduction allows you to depreciate nearly the entire value of a newly purchased/financed asset in year one rather than over a few years. For anyone with growth plans, it’s been a great way to preserve liquidity for future opportunities.
2. High Demand for Green Building
The shift away from traditional materials and toward sustainable building dominated 2023 and will likely continue to evolve as we move further into 2024.
This is partially due to heightened consumer focus on the environment and government-sponsored plans to build sustainable infrastructure and cities for the future. Research suggests that more than half the population will live in cities by 2050, and the push for climate change reform extends beyond government regulations and into the private sector. Before long, many construction companies will need to use these materials to stay competitive.
However, these materials cost more than their counterparts, and inflation doesn’t do us any favors. Although inflation is expected to subside, smaller companies that can’t afford the upfront cost might be priced out of major contracts unless they have relationships in place that can provide liquidity.
3. Technology Adds a Competitive Edge
From 3D printing to robotics, construction technology has undoubtedly changed the industry forever. It’s allowed for greater efficiency when building, streamlined project management, and more transparent surveying, all of which greatly benefit a business’s bottom line.
The construction industry stands as the 2nd least digitized industry, but it won’t stay that way for long. In 2023, around ⅓ of construction companies reported to have used AI and prefabrication technology in the last 12 months. 2 out of 5 industry professionals have plans to purchase/upgrade their construction management software in the next year. Both numbers are expected to grow immensely in 2024.
Soon, the disparity between those with this equipment and those without will be a major pain point for startups and newer businesses looking to compete. While some might be able to get around it with creativity and intuition, it’s easy to see how having this equipment can streamline a project.
4. Training Employees
Almost every construction company has dealt with an open position that remained unoccupied for far longer than they anticipated. Challenges surrounding finding and retaining quality talent will continue into 2024, but businesses are starting to get creative instead of frustrated over the wording of their job descriptions.
Training, apprenticeships, and certifications will help construction companies build the workforce they need to succeed. Inexperienced team members can be transformed into experts in their craft, and business owners can reward their loyal employees by furthering their professional development.
It’s a win/win that you’ll likely see much more of in 2024.
5. Worker Safety
Worker safety has often fallen to the wayside in exchange for higher productivity and efficiency, but this is unlikely to continue. Simply put, too many workers have suffered injuries on job sites in situations that could have been prevented, which is pushing unions and business owners to make a change.
From more frequent inspections to better safety guidelines and equipment, expect job sites to become much safer in 2024. Technology, certifications, and having the right people will drive this trend. It won’t be cheap, but doing it the right way will yield positive ripple effects across the industry that will save lives, time, and money.
How Can You Keep Up With the Trends?
Keeping up with the competition requires hard work, the right strategies, and – you guessed it – money. If you want to capitalize on industry trends and position yourself ahead of the pack, you’ll need the liquidity to take advantage of opportunities without jeopardizing your cash flow.
One of the ways to do this is by establishing a financing relationship with an organization that can grow with your business. You need a business lender that can help with your first funding, next funding, and future transactions, where you need tens of millions to invest in your growth properly.
National Business Capital can be that organization. As a Specialty Finance Group, our Business Finance Advisors act as experienced financing consultants for your business, connecting you to the most competitive business loan and funding options you qualify for while offering expert advice on how to maximize your ROI.
Interested in learning more about the financing options you qualify for? Or do you have a specific opportunity you want to talk about? Connect with our team by completing our digital application, and a Business Finance Advisor will be in touch
Phil Fernandes serves as Chief Operating Officer for National Business Capital. He boasts 15 years of experience in sales and 10+ years of management experience as National’s VP of Financing/Analytics. Phil is also an excellent writer who's completed the Applied Business Analytics executive program at MIT and regularly contributes articles to National Business Capital’s blog.