Looking to the Future

There are many trends and economic forces that are here to stay: sustainability and green construction, reduction of energy use, industrial technology use, consumer buying power and the Internet consumer market, scarcity of raw materials and growing populations.

The trend toward larger and bundled projects is bringing about changes in delivery method and financing. An advantage is that more design-build, CM/GC and IPD can reduce risk, as well as improve project success for all involved. In addition, the master builder concept can help protect owners from process inefficiencies and the risk of going over budget and schedule. Competition will continue to be fierce and owners will continue to be demanding. The push toward commoditizing construction may continue. However, the trend toward large and complex projects should bring back awarding projects based on the best value in relation to qualifications and experience, rather than just low, low prices.

With little prospect for consistent, long-term funding and increased competition, small to mid-sized contractors are feeling intense pressure. Many engineering and construction executives are being forced to decide whether to develop niche specialties, move up by diversifying or move out, selling or closing their business. The result is an accelerated contraction of the industry as smaller service providers are acquired or exit.

Regardless, this apparent future offers an effective way to control costs. The thriving contractor of the future will be a dynamic innovator in all aspects of their business, making them an attractive partner for the owners who need, want and value professional construction services.

Brian Moore is a principal with FMI Corporation, consulting with contractors and construction materials producers on strategic, organizational and operational issues. Contact at (919)785-9269 or bmoore@fminet.com.