MARKET WATCH STUDY: OWNERS PULLING CONTRACTORS INTO DIGITAL CONSTRUCTION WORKFLOWS A research report released Feb. 17 by Trimble and Dodge Construction Network details how project owners are now the chief drivers of digital workflows. The study report, Connected Construction, the Owner’s Perspective, focuses on owners, but because the subject matter deals in part with automation of intercompany processes, 236 general contractors and 232 trade contractors were also included. The data says owners are digitizing.
Takeaway #1 Contractors Must Adopt Digital While in the past, contractors were leading the charge on pushing for a digital workflow with owners, the tide seems to have turned. The results show 80% of project owners in the study
said they used digital workflows, not just internally, but externally with their project teams.
applications and field communication applications. The more contractors digitize their processes, the more visibility they get into the root causes of problems.
Takeaway #3 General Contractors are Piggy in The Middle The most frequent communication breakdowns owners reported were with general construction and construction managers, yet they were also the most likely Trimble-Dodge Construction Network to use a digital workflow Takeaway #2 Cause of Construction with external parties, but this does not Delays and Errors Matters mean subcontractor or specialty trade One of the main benefits to owners of contractors are better at digital workflows a digital workflow is the ability to trace or communication than generals. errors and delays to their root cause. forconstructionpros.com/22068611 Contractors are actively adopting some systems like intercompany change order
CONSTRUCTION BACKLOG AND CONTRACTOR CONFIDENCE BOTH SLIDE LOWER IN JANUARY Associated Builders and Contractors (ABC) reported that its Construction Backlog Indicator declined to 8 months in January, according to an ABC member survey conducted Jan. 20 to Feb. 4. The reading is down 0.2 month from December 2021, but it is up 0.5 month from January 2021. ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels all inched lower in January. All three indices remain above the threshold of 50, indicating expectations of growth over the next six months. View ABC’s Construction Backlog Indicator and Construction Confidence Index table for January 2022. “Despite the omicron variant, ongoing supply chain issues, elevated energy and materials prices and rampant staffing shortages, the average nonresidential contractor remains upbeat,” says ABC Chief Economist Anirban Basu. “Perhaps the most remarkable aspect of the survey findings is the expectation that industry profit margins will expand during coming months, implying that contractors expect to pass along enough price increases to project owners to countervail the rising costs of construction service delivery.
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“The last two months have indicated declining backlog, but the dips are not cause for particular concern,” Basu says. “Declining backlog indicates that some projects are postponed or canceled in response to rising costs and/or extended delivery timelines. The principal challenge for contractors remains a lack of sufficiently skilled labor, a structural issue that will not go away soon and a circumstance contractors have dealt with for years. The situation is likely to deteriorate further as federal infrastructure dollars begin affecting the economy more forcefully in the near future.”
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