1. Green Building and Sustainability 

In 2024, sustainability is a cornerstone of the construction industry. Companies are adopting eco-friendly practices by using green building materials and integrating energy-efficient technologies. 

Nearly half of all respondents in the construction and design sectors expect the majority of their projects to be environmentally sustainable by the end of this year. Furthermore, 90% of industry respondents believe a shift towards environmental sustainability is on the rise. 

This shift is driven by regulatory demands and a strategic business imperative, as construction clients increasingly seek environmentally responsible projects. From design to completion, sustainable practices are becoming embedded in the construction process. 

Designers and builders are focused on creating structures that are both eco-friendly and energy-efficient, using non-toxic materials that benefit both the environment and the occupants’ quality of life. 

Green construction goes beyond just reducing a building’s carbon footprint; it includes using sustainable resources and construction models to optimize resource use. 

Here are some key benefits of green building: 

• Energy Efficiency: Buildings are significant contributors to CO2 emissions, accounting for nearly 40% of global energy-related carbon output. Through green construction, energy consumption and greenhouse gas emissions are substantially reduced. 
• Water Conservation: Sustainable building practices include measures that minimize water use.
• Health and Safety: Using non-toxic, sustainable materials enhances the living conditions within buildings, contributing to better health outcomes for occupants. 

Despite these advantages, sustainable features often remain viewed as luxuries. However, this perception is expected to shift over the next decade as green technology and sustainable construction practices become more mainstream. 

Lastly, as of 2019, renewable energy sources captured 11% of the energy market and are poised for growth, reflecting a significant opportunity given that buildings still account for a substantial portion of U.S. energy consumption and greenhouse emissions.

2. Addressing the Labor Shortage 

The construction industry in 2024 is dealing with a significant labor shortage, which has become a central challenge shaping the sector’s dynamics. In 2022, it even reached “crisis level.” 

This shortage of skilled labor is prompting collaborative efforts among industry stakeholders, educational institutions, and governments to bridge the skills gap. These initiatives focus on promoting vocational training and attracting new talent, emphasizing the crucial role of skilled workers in tandem with advanced technology.

According to Associated Builders and Contractors, the construction industry needs to hire an additional 501,000 workers in 2024 to meet labor demands. In a recent survey, 89% of construction firms reported challenges in filling job vacancies, and 61% experienced project delays attributed to labor shortages. 

Despite recovering from workforce losses during COVID-19, the industry faces rising wages due to inflation and a lack of sufficiently skilled workers, highlighting the need for effective training and employee retention strategies.

The labor shortage is exacerbated by demographic shifts within the workforce. Nearly a quarter of construction workers are over 55, with few younger individuals entering the trades. This aging workforce is a critical issue, as replacing older workers does not equate to replenishing lost experience. 

Moreover, while robots and automation have taken up some slack (more on this later), the need for technically skilled workers to manage and interpret data from these technologies is growing. 

3. Rising Construction Industry Costs 

In recent years, the construction industry has faced significant cost volatility, particularly in material costs. CBRE’s new Construction Cost Index predicted a 14.1% increase in construction costs by the end of 2022, as both labor and material expenses continue to rise. 

Additionally, U.S. construction costs saw an average increase of 4% in 2023. Those costs are set to increase by 3-6% in 2024, according to a report by Currie & Brown. 

Combined with rising interest rates, these escalating costs are exerting additional pressure on the industry. 

Advancements in technology, such as drones, augmented reality (AR), and Building Information Modeling (BIM), are becoming critical in managing these challenges. These tools help maintain project volume by enhancing precision and efficiency, ultimately helping to mitigate some of the cost pressures.

However, the introduction of innovative materials, while promising long-term savings and sustainability benefits, could initially drive costs even higher. 

The construction sector also continues to reel from the impacts of global trade disputes, regulatory changes, and supply chain disruptions initially caused by the COVID-19 pandemic. 

These factors have led to sharp increases in both material costs and wages, placing further strain on the industry.

Inflation and rising interest rates add another layer of complexity, highlighting the need for strategic planning and cost management within the industry. 

By leveraging new technologies and innovative materials, construction companies can navigate these financial challenges more effectively, although the initial investment may be substantial. 

Supply Chain and Material Shortages 

As of February 2024, construction input costs have surged by 38.7% compared to February 2020. 

Additionally, cement and concrete prices have seen a steady increase, with production costs rising by approximately 14% year-over-year in the third quarter of 2022. Due to persistently high production and transportation costs, cement and concrete prices are likely to remain near their current elevated levels. 

Since the beginning of the COVID-19 pandemic in 2020, the construction industry has faced ongoing supply chain disruptions and price volatility. These challenges have resulted in material shortages, including steel, lumber, concrete, drywall, insulation, and HVAC equipment, leading to project delays and rising costs. 

To mitigate these risks, companies should diversify their supplier networks, increase stockpiles of critical materials, and explore local sourcing options. 

4. Enhancing Construction Worker Safety 

Safety has always been a priority in the construction industry, but in 2024, there’s a heightened focus on implementing advanced safety measures. 

According to the Bureau of Labor Statistics, nearly 1 in 5 deaths among U.S. workers is in the construction industry, and fatalities in construction increased by 11% from 2021 to 2022.  In 2022, construction had the third-highest rate of all recordable cases of injury and illness in the workplace. 

However, as the industry embraces a culture of safety, the goal is not only to meet regulatory requirements but to prioritize the well-being of every worker. 

Traditionally, construction companies have focused on minimizing labor costs, but there is now an increasing emphasis on worker safety and strict adherence to safety regulations. Immersive technologies help prevent onsite accidents, while Personal Protective Equipment (PPE) serves as a critical safeguard. 

Technology plays a pivotal role, with wearable devices and AI-powered analytics use monitors and mitigates potential risks. Virtual reality (VR) and augmented reality (AR) are used for immersive safety training, providing workers with realistic scenarios to enhance their understanding of potential hazards. 

VR technologies offer immersive training for field workers, reducing the likelihood of accidents during hazardous tasks. AR enables fabricators to visually examine objects in detail, enhancing safety and precision. 

To further protect workers, companies are equipping PPE with Internet of Things (IoT) sensors that detect and transmit data on vibrations, temperature, heart rate, and steps. This technology allows supervisors to remotely monitor workers’ health and productivity, reducing physical and financial risks.

Improved safety is a key trend in the construction industry, addressing the sector’s historically high rates of workplace injury and death. Fortunately, over the years, various technologies have been developed and deployed to tackle these issues. 

5. Construction Industry Technology 

Traditionally cautious in adopting new construction technology, the construction industry is increasingly changing its mindset. Among survey respondents in OpenAsset’s 2022 AEC Industry Outlook Survey, nearly 74% of respondents said they plan to implement new technologies to help overcome key challenges.

This shift is being driven by the need to enhance efficiency, especially in the wake of the COVID-19 pandemic, which has highlighted the importance of technological advancements.

In 2024, technology will likely be the biggest differentiator for builders and developers. A survey by GlobalData on construction technology identified several key drivers for this change. 

Improving productivity was the most commonly cited reason, with 61% of respondents highlighting it. Other significant reasons included achieving greater competitiveness and reducing costs (both 37%), and enabling faster construction times (35%).

Several types of technology are set to grow in popularity through 2024 and beyond, each contributing to increased efficiencies:

• Building Information Modeling (BIM) 
• Drones 
• Augmented Reality (AR) and Virtual Reality (VR) 
• Robotics and Automation 
• Wearable Technology 
• Artificial Intelligence (AI) 

These technologies not only enhance efficiency but also improve competitiveness, reduce costs, and enable faster construction times. 

As the industry continues to embrace these innovations, construction projects will become more streamlined, safer, and more cost-effective. The implementation of advanced technology is set to transform the construction landscape, driving growth and sustainability in the sector.