The Construction Industry Has Changed—But Has It Progressed?

Michael Pink is the CEO of SmartPM Technologies.

“It is not strange…to mistake change for progress.” -Millard Fillmore.

The construction industry has undergone notable changes in the past decade. Yet, as our esteemed 13th president pointed out, we often confuse change with progress. While change is an integral element of progress, it doesn’t guarantee it. So it’s appropriate to wonder: While the construction industry has certainly changed over the past 10 years, has it actually progressed?

Without question, we have witnessed a myriad of impressive advancements and milestones in our industry. Yet it seems that for every step forward, there is a counterbalancing step in the opposite direction.

Let’s start with technology, particularly as it relates to project management. The proliferation of these packages has been nothing short of explosive. Industry heavyweights such as Procore and Autodesk have become de facto standards for managing projects of all scopes and sizes.

The industry has also seen the rise of technological platforms created for more specific management tasks, such as schedule analysis, costing and estimating and resource allocation. These packages provide construction executives with an arsenal of tools that allow for more effective, data-driven decision making.

The downside? Technology overload. The pure number of software platforms and solutions often results in a kind of “technological paralysis,” with company owners and project owners unable to decide on their greatest area of need—and once they do, the plethora of choices is overwhelming, as potential buyers weigh the pros and cons of these offerings. And, of course, there is the fear of making a poor choice, not only resulting in negative financial ramifications for the company but leaving the problem area unchanged.

And even if the choice is a solid one, there is the nagging issue of technology integration. Getting these platforms and packages to work seamlessly with a company’s existing IT infrastructure—which may contain multiple legacy systems lacking standardization—is not a job for the faint of heart.

Taking a broader view, let’s look at the overall growth of the construction industry during the last decade. In the U.S., between 2014 and 2024, construction spending increased significantly in both the private and public sectors. According to the U.S. Census Bureau, the seasonally adjusted annual rate for total construction spending was estimated at $971 billion in October 2014. Fast forward to October 2024, and this figure blossomed to around $2.17 trillion—an increase of about 124%.

Naturally, more work calls for more labor. Unfortunately, that’s where the industry comes up short, courtesy of a major skills and labor shortage. There are a plethora of reasons for this dilemma. Perhaps the most pressing is that while many experienced workers are nearing retirement age, the pool of able replacements is woefully insufficient, as fewer younger people are gravitating toward construction careers. Add in the drop in vocational training, competition from other industries and the lingering impact of Covid-19, and you’ve got a job market where supply falls far short of demand.

The last decade has seen a greater emphasis on sustainability and eco-conscious building practices—with good reason. The buildings and construction sector is the largest generator of greenhouse gases by a wide margin, accounting for an eye-popping 37% of global emissions. This includes emissions generated directly by the construction industry, such as those from machinery used on-site, as well as emissions produced throughout a building’s operational lifespan.

This environmental emphasis didn’t arrive a moment too soon. While sustainability efforts began formally in the 1990s, these practices became mainstream in the 2000s and 2010s. In an ongoing effort to reduce carbon emissions, the industry began to embrace the use of eco-friendly materials, including such remarkable products as self-healing concrete and cross-laminated timber. And certifications like Leadership in Energy and Environmental Design (LEED) and Building Research Establishment Environmental Assessment Method (BREEAM) have helped the industry raise its game with regard to safeguarding the planet.

These scenarios represent just a fraction of the advances and setbacks that the industry has seen:

• Stable material and labor costs in 2014 gave way to rising costs resulting from inflation and supply-chain disruptions in 2024.

• The growing infusion of capital from investors in recent years has been tempered by the escalating stress associated with the need to serve multiple stakeholders.

• The growing use of artificial intelligence and drones has been a technological boon but must be measured against the loss of human oversight.

Then there are those industry staples, the factors that seem to worsen or improve in small increments but feel like permanent fixtures: the ongoing focus on low-cost bidding; overpromising on project delivery dates and budget; and the rise in litigation, exacerbated by project complexity and lapses in risk management.

So, what does the final scorecard look like? From where I sit, the construction industry is in better shape today than it was last decade (or at any time, for that matter) based on advances in technology, safety, sustainability and investment. Still, there are multiple speed bumps scattered on the road to success in this industry: labor issues, rising material costs, regulatory considerations and problems with technology adoption.

The construction sector has produced powerful results over the last 10 years, and I don’t expect the next 10 to be any different. But there’s a caveat: All of us in the industry need to have our heads on a swivel because there are serious obstacles that should not be ignored, and they can easily get between us and the finish line if we are not vigilant.

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