Strategic Partnerships

Decoding the Factors Influencing Construction Technology Spending in 2023 and 2024

In the dynamic landscape of the construction industry, the determinants of technology spending in 2023 and 2024 hold significant implications for growth and efficiency. The second quarter of 2023’s Construction Market Forecast Service (CMFS) sheds light on housing starts, providing a nuanced perspective on the construction sector’s trajectory.

Small Building Initiatives: Exploring the forecast, the CMFS anticipates a modest 2% increase in housing starts for 2023, a divergence from the remarkable 15% surge observed in 2022. Unveiling potential threats, the report underscores concerns about the debt ceiling, signaling the sector’s vulnerability to economic shifts.

Navigating Debt Ceiling Challenges: Delving into the impact of potential debt ceiling exceedance scenarios, the Dodge Construction Network Economics Group’s analysis, based on Moody’s Analytics, unfolds two distinct trajectories. A short pause scenario projects a 3% increase in launches for 2023, with a marginal uptick in 2024. In contrast, a prolonged pause envisions a 14% dip in launches for 2023 and a 9% decrease in 2024. The narrowly averted reduction in the debt ceiling underscores the fragility of the construction sector.

Tech Investment Amid Economic Uncertainty:

Despite the looming recession and signs of stabilization, the construction industry continues to allocate resources to technology. As global IT budgets are predicted to rise by 5.1% YoY, reaching $4.6 trillion in 2023, according to Gartner, the question arises: why this surge in technology spending during challenging times?

Efficiency as the Driving Force: Companies are allocating increased budgets to construction technology primarily for efficiency gains. Jon Child, COO of WSB camp Associates, Inc., emphasizes the ongoing productivity surge due to technological advancements. In a context where staffing issues persist, technology emerges as a key driver for working more efficiently. Child notes a remarkable 20% performance increase when rendering 3D projects compared to 2D.

Technology as a Workforce Multiplier: Industry voices, such as Pat L’Heureux from Severing Trucking, echo the sentiment that technology is a solution to volatility and uncertainty. L’Heureux highlights how technology empowers companies to accomplish more projects with a leaner workforce. The ability to enhance efficiency without overburdening the workforce becomes a strategic advantage in times of economic restraint.Strategic Partnerships

As construction technology spending unfolds in 2023 and 2024, the industry’s resilience and adaptability are evident. The pursuit of efficiency through technological investments stands out as a unifying theme, offering a pathway for sustained growth amid economic challenges. The construction sector’s embrace of technology exemplifies a forward-looking approach, ensuring it remains robust in the face of uncertainties.

Paying for new technology.Strategic Partnerships

Inflation has squeezed budgets and affected every facet of the economy, so finding the funding to pay for new software can be difficult. How can companies incorporate new or enhanced technology into their budgets?

The flexibility also provides value because subscription-type approaches enable companies to pick the types of tools that are particularly useful for them. Staff can try out multiple technologies and determine which ones will solve their challenges.

“The efficiency with which solutions that are available on a subscription model can be deployed absolutely assist with the budgeting on a public entity,” says Thomas Bonner, Director of the Department of Assets and Infrastructure for Montgomery County, Pennsylvania. “To the extent that we mitigate uncertainty … a subscription model with the contract vehicles that we have in place allow us to budget appropriately and confidently ….”Saudi Design Group