As a Shareholder at Schneider Downs, I have had the privilege of working closely with various stakeholders in the construction industry, including owners, CEOs, CFOs and other key players.
Through our conversations, several critical points have emerged that are shaping the future of construction. This article delves into these points, providing insights and strategies for navigating some of the construction industry’s top challenges and innovations.
The Lack of Quality Skilled Labor
One of the most pressing issues in the construction industry is the shortage of quality skilled labor. While there are skilled workers across various trades, the question remains: are there enough good ones to ensure that projects run smoothly, maintain high quality and generate profit? Companies are increasingly investing in their people through robust training and development programs in an effort to assemble a team that meets their needs and ensures the successful completion of projects.
The Impact of Tariffs
Tariffs have a significant impact on the construction industry, particularly concerning the three most used construction products: steel, wood and cement. Tariffs can increase material costs, disrupt supply chains, and extend project timelines. For instance, when tariffs are imposed on steel and aluminum, the prices of these essential materials rise, affecting the cost of raw materials and finished products. This increase leads to higher expenses for construction companies, which can result in increased project budgets and higher costs for clients.
Government Funding and Regulations
Governmental funding plays a crucial role in the construction industry, especially for organizations funded by federal agencies for construction and capital expenditure. Public sector funding supports infrastructure projects, including highways, public safety facilities and waste management. Recent legislation, such as the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act, has increased spending in the construction industry. However, with increased government funding comes increased regulation, which companies must navigate to maximize their benefits.
CMMC Certification for Department of Defense (DoD) Vendors
DoD vendors must be Cybersecurity Maturity Model Certification (CMMC) certified to ensure the protection of sensitive data. CMMC is a unified standard for implementing cybersecurity across the defense industrial base.. This certification process measures a company’s ability to protect sensitive data and is essential for continuing to do business with the DoD. Schneider Downs is a C3PAO which allows us to both certify and prepare organizations for CMMC.
The Move Towards Prefabrication and Automation
Prefabrication and automation are becoming increasingly prevalent in the construction industry as companies seek innovative solutions to address the lack of skilled labor, improve quality and enhance profits. Prefabrication involves assembling components of a structure in a factory before transporting them to the construction site for installation. This method can expedite the construction process, reduce labor requirements and minimize waste. Automation, including the use of robotics, further optimizes manufacturing, transportation, and assembly processes, leading to increased efficiency and cost savings.
The construction industry faces several challenges, including the shortage of skilled labor, the impact of tariffs, and the need for governmental funding and regulation compliance. However, the industry has always been responsive to the changing dynamics it faces. Schneider Downs is committed to providing the expertise and support needed to help companies thrive in this dynamic environment.
If you have any questions, please contact our Construction industry group.
About Schneider Downs Construction Services
Led by a diverse group of shareholders and managers, Schneider Downs provides strategic and practical solutions for our construction clients in all facets of their business. Our dedicated team of more than 350 professionals have a wide background of tax, accounting, technological and business experience in the region, specifically in Pittsburgh and Columbus.
To learn more, visit our Construction Industry Group page.
