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The Construction Industry is Hard at Work in Greater Baltimore

Construction cranes dotting the skyline are an undeniable, visual announcement of economic activity. Whether it is for renovating a historic industrial building in Baltimore, a major mixed use development in downtown Towson, or a distribution center in Cecil County, the construction industry is hard at work throughout the Greater Baltimore Region.

Economic growth is mirrored in a strong construction industry that directly generates jobs and revenue, and indirectly supports growth in all other industry sectors by providing the facilities and infrastructure required to conduct business throughout the State. According to the Sage Policy Group, construction accounts for 7.2% of the statewide private workforce and 8.7% of statewide private wages. While specific numbers are not available for Greater Baltimore, it is expected that Maryland’s numbers are similar for the Region, where strong drivers such as educational institutions (public schools and higher education), medical centers, and a growing demand for logistics/manufacturing facilities in several jurisdictions fuel construction activity.

Nationally, it is predicted that the construction industry will continue to be strong through 2020, particularly nonresidential construction. Anirban Basu of Sage Policy Group, the chief economist for the Associated Builders and Contractors (ABC), predicts that the industry will see strong momentum through 2019 and into 2020. A number of other industry experts, such as the American Institute of Architects’ Consensus Construction Forecast Panel , Wells Fargo’s Construction Industry Forecast, and Deloitte’s 2019 Construction and Engineering Industry Outlook, agree.

While the near-term forecast is positive, experts also agree that factors such as inflation, the impact of tariffs and other trade-related policies on cost of materials, immigration policies and labor shortages could begin to impact the construction industry toward the end of 2020.

Advances in technology are transforming the design and construction industries, and embracing the technologies and the business practices they support help firms achieve operational efficiencies – thereby reducing costs while improving margins. However, experts report that the industry in general has been slow to adapt. For the fourth year in a row Gross Mendelsohn teamed with the Maryland Construction Network to survey 150 contractors throughout Maryland. Their 2019 Maryland Construction Industry Survey reported that over two-thirds of the respondents stated that they don’t believe they are effectively applying technology to improve the way they do business. In particular, over half of the respondents stated that they are not using software to integrate estimating, bid log, scheduling, accounting, and delivery of service technologies such as integrated software tools for estimating. The lack of integrating these processes requires contractors to work with multiple systems that do not communicate with each other, impeding decision making.

BIM ExampleAnother tool that is increasing efficiencies is Building Integration Modeling (BIM).

Traditional building design largely relies on two-dimensional technical drawings (plans, elevations, sections, etc.). Building information modeling is a 3D digital representation of the physical and functional characteristics of a facility and a resource for integrating and sharing information in order to make decisions during the entire life-cycle of a facility from planning through construction to delivery and operations.

The growing use of BIM is facilitating the application of Integrated Project Delivery (IPD) on major construction projects. IPD is a collaborative delivery system that seeks to align interests, objectives, and practices through a team-based approach. Unlike the design-build method which typically places the contractor in the lead role, with IPD the entire building team including the owner, architect, general contractor, building engineers, fabricators, and subcontractors work collaboratively throughout the construction process. The ‘one team’ approach results in faster delivery times, lower costs, and significant risk mitigation leading to minimal if no litigation and a more enjoyable process for the entire team – including the owner. A key component of IPD is a contract signed by all stakeholders who are financially invested in the outcome of the project. The stakeholders share in the cost savings, an incentive to keep the project on-schedule and on-budget, while adhering to project goals. The application of technology will continue to impact the industry, and contractors that adapt may very well derive a competitive edge over those who do not due to increased productivity and efficiencies.

There is another factor that presents a greater challenge to the health of the industry, and that is a national shortage of labor. This shortage impacts the industry at all levels: general contractors, construction managers, and all of the trades. Skilled labor and senior constructors are “aging out” of the industry and retiring, and there are too few young people choosing to consider construction and the trades as a career opportunity to replenish the work force.

July ROP Callout Box 2

Though employment in architecture, engineering and, to a large extent, construction management still requires a four-year college degree, or more, there are significant opportunities in the trades to secure entry-level positions at a good wage, and often with benefits for high-school graduates who acquire additional apprenticeship and/or community college training. However, too few middle and high school students have any awareness of these opportunities and what they need to do to take advantage of them after they graduate.

Organizations such as the Maryland Center for Construction Education and Innovation (MCCEI), Associated Builders and Contractors (ABC), and the Building Congress & Exchange are working with contractors and educators to reach middle school children and expose them to the construction industry and the trades. Community colleges are offering credentialing and two-year degrees. The curriculum in P-Tech Schools (Pathways in Technology Early College High School) and the Builders in Training workshops conducted by the Building Congress & Exchange are two programs that work to expose public school students to careers in the construction industry. Post high school, Project Jump Start –a partnership between ABC and the Jobs Opportunity Task Force, along with several community colleges are training people for career-pathway entry-level jobs in the construction fields.

This newsletter will not delve into the barriers to employment in the construction industry that limit an individual’s access to opportunities including the ability to pass background checks and the need to have a driver’s license. However, increasing awareness of the opportunities that young people can and should consider as career pathways in construction and the trades, along with informing them of what will be required, is a start to expanding the industry’s labor pool. It will also expose a myriad of opportunities for gainful employment to many youth who do not pursue a four-year college degree. This awareness is vital to building a workforce for the future of the industry.

Sources including Forbes cite many of the following as the predominant types of technology currently impacting the construction industry:Drone Construction

  • Robotics
  • Drones
  • Digital project collaboration mobile and cloud software
  • Building information Modeling (BIM) *see previous “Greater Perspective” section
  • Augmented and virtual reality
  • 3D modeling/printing
  • Off-site pre-fabrication
  • Machine-learning/AI
  • IOT and wearables

To manage the rate of change and ‘disruption’ caused by advances in the technology tools available, some organizations serving the construction industry have responded by forming think-tanks and interest groups. Associated Builders and Contractors Greater Baltimore responded last year with the formation of the “ABC Tech Council” – a group of ABC members who meet on a regular basis for tech demos and discussion of best practices and opportunities for collaboration.

The EAGB shines a light on several of the Region’s institutions and organizations that are working to address workforce requirements of the construction industry through curricula and programs that have a focus on the built environment and trades.

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