What are the factors set to impact the construction industry industry this year? After doing some research, we thought we’d summarize some opinions:
- The Infrastructure Investment and Jobs Act is expected to drive growth via approval of new projects in the latter part of 2022, with a focus on the commercial construction market.
- With continued global supply chain shortages affecting lumber costs and supply availability, firms that can adapt and shift gears quickly will thrive. With this in mind, note that insurance can help cover shipping delays and other challenges caused by these ongoing supply chain issues.
- Regarding lumber costs, The Seattle Times states current cost of a typical home's lumber package is $13,000 -- $30,000 more than in April 2020 and calls for immediate suspension of tariffs on Canadian lumber, who single-handedly accounted for ~25% of lumber consumed in the U.S.
- Emerging and evolving technologies will drive improvements in efficiency, but new risks emerge with innovation. Drones, 3D printing, robots, and cobots working side-by-side with humans all introduce novel risks. What’s more, digitization in the industry has created new cyber risks for construction firms of all sizes.
- The labor shortage in the construction industry is expected to linger in 2022–making it difficult to find and retain qualified workers. But the indirect costs of a greener workforce can add up quickly when efficiency decreases and the risks of accidents increases. As a result, claims costs could increase along with frequency and severity.
- Mergers & acquisitions in the construction industry are on the rise, with the trend predicted to continue in 2022. As more firms acquire tech companies, new risks are introduced through the M&A growth model. If you’ve acquired a new company, make sure your insurance covers the new risks.
For Coloradans specifically:
Housing Tides forecasts a relatively stable market for Single-Family homes in Denver - Aurora - Lakewood, though actuals have generally outperformed.
Permits in Pikes Peak Region show decrease in Single Family with a large spike in Duplex and Multi-Family.
Here's another good article with the National Association of Home Builders - a great source of updates and information. NAHB Challenges We Faced in 2021: Building Materials
Feel free to comment or contact us to engage further in discussion or for a free consultation or quote. We have decades of Construction Risk Management experience and work with some the best in the trade.
Some content compliments of Levitate AI.
Saturday, January 29, 2022 at 11:02am MST
Very insightful and useful information!
Debbie Klisch [Owner, Insurance & Risk Management Consultant at Southern Colorado Insurance]
Wednesday, February 2, 2022 at 9:23am MST
Thank you, Eric!