The construction industry is one that many other sectors depend on for progress. It’s an industry that makes infrastructure available for many companies to flourish and thrive. However, even such an industry is vulnerable to the damages brought upon the pandemic. Moreover, it’s unknown to most of us whether if the industry can recover in the coming years.
Among the many companies in the construction industry that were affected by the pandemic, the small businesses were affected the most. Contractors and independent developers took the most hits from such devastation. But survival is possible, and growing a small business in such a sector is truly possible. You can arm your construction business for growth next year with enough knowledge. Here are some things you should watch out for.
Lack of Laborers
There will be a predicted lack of laborers next year due to the pandemic and improvements in technology. Therefore, if you want to stay ahead of the competition next year, you must put some of your investments into quality laborers.
About 40% of construction firms confirmed layoffs last year, with more than half needing to apply for the paycheck protection program. This means that there’s a healthy number of applicants looking for jobs. You might have to get these applicants into your business even if it means suffering at a loss because if you don’t, many other companies will take them from your grasp.
The industry is somewhat recovering this year, and only the future will tell whether it will continue to recover next year. However, you must get as many employees as you can this year while they are still desperate to get jobs. This will ensure that you can reduce your labor costs at an optimal level next year.
Remote workers are starting to look like the workers of the future. They can work practically anywhere and can have flexible hours. Moreover, their pay can be quite cheap too. They are highly negotiable when compared to traditional workers.
There’s an increasing amount of remote workers in the construction industry. Before, many industry leaders hated this idea, but now it seems to be the most efficient way to keep their projects and tasks on track. So consider having some remote workers in your company to ensure that you’ll have people working for you 24/7.
Let’s be honest here. Many firms aren’t getting many projects this year. So for many firms to survive, they have to diversify their projects. This means taking small-time jobs such as groundskeeping. There are always many small-time jobs available in the market, and although their pay is small compared to full-on construction projects, it could be enough to keep your company alive for the rest of the year.
Diversification can also mean getting new licenses and contracts for small-time jobs. You can then choose to take jobs such as window cleaning or interior painting for other companies. These contracts are once again small-time payouts, but at least you’ll have them for the rest of the year or at least six months. If you’ve hired some new laborers into your company and have some remote workers, then your diversification can be justified.
Increase in Material Prices
It can’t be denied that the increase in material prices is hurting the industry more than the pandemic. This is stopping many small businesses from offering lower prices on projects.
There are two reasons why material prices have increased drastically this year. First is the quarantine protocols implemented in rapid successions in different countries. The second was the blockage in the Suez Canal early this year.
Quarantine procedures are problematic because they can happen at any time. If you have materials manufactured in other countries, consider paying for those materials at a premium. To stop these costs from rising, consider partnering with local manufacturers.
This year, the blockage in the Suez Canal has cost worldwide economies billions of dollars. Moreover, the delays have cost projects to be at a stand-still. Many firms became desperate after that, and material prices skyrocketed through the roof because of this desperation. There is no real way to address this problem, except to hope that prices will return to normal next year.
The Bottom Line
The construction industry is suffering one of its worse challenges yet. But these challenges can be overcome through some intuitive thinking and shoring up both resources and manpower in your company. By having the necessary preparations in place, you should be able to fuel yourself for success in the coming year.