Outlook for the Construction Industry in 2020

Few industries reveal the overall state of the economy like construction. When construction is booming, it means businesses are expanding, people are employed, and all signs point to further good times ahead.

 

It comes as no surprise then, that the state of the construction industry is usually on people’s minds when trying to gauge the markets in general. With this in mind, we figured it’d be a good idea to take a look at the construction industry trends and projections for the rest of the year and into 2020:

 

Talent and Employment

The need for qualified construction industry professionals continues to grow. This trend is expected to carry into 2020. While construction management school graduates and other academically-trained individuals are entering the workforce at rapid speed, supply is unable to keep up with demand. The same can be said for the skilled labor required for construction projects to come to fruition. These employment trends are a strong indicator of the construction industry maintaining its momentum into the coming year.

 

Growth and Development

The construction industry took a massive hit during the Great Recession and remained a shred of its former self for years afterward. Thousands of companies went out of business, but those who survived did so by adapting and evolving to function better in the changing economy. While this does not make the construction industry immune to another economic downturn, it does send a positive signal in terms of the industry’s ability to weather a similar storm. Given the talk of a potential recession on the horizon, those with money tied up in construction can sleep easier knowing the industry is less vulnerable than it was ten years ago.

 

New Markets and Old Space

Cities around the globe continue to grow and expand, while older sections are in desperate need of rejuvenation. Both of these bode well for the construction industry going into 2020 and beyond. It’s safe to say there will remain a steady demand for new buildings and major renovations to old ones for another ten years or so, providing a layer of security for an industry with a history of having the bottom drop out on it.

 

New Tools and Technology

Many aspects of the construction industry have undergone rapid advancement in the last 20 to 30 years. The introduction of digital technology has led to a new generation of tools to help builders do their jobs faster and cheaper while also making the work itself safer. These changes have helped to make construction projects more predictable in terms of the time and money required. This will continue to make construction a less volatile industry going into 2020.

 

Potential Disruptions

As mentioned earlier, construction is one of the hardest-hit industries when the economy tanks. It’s imperative for investors to understand this as we wrap up 2019 and head into the new year. With continued talk of another recession happening sometime soon, those with their money invested in construction have to approach new opportunities with added caution. While the aforementioned changes to the construction industry have made it more capable to power through a recession than it was a decade ago, any expectations regarding future profits will need to be revisited in the event of an economic slow down over the next year.

 

Construction is an industry which has remained relevant and in-demand for thousands of years. Even when times are bad, stuff still gets built. Those who’ve gotten used to reliable growth when looking at their investments tied to construction need only consider the effect a recession will have on the industry, and plan for the possibility if it happens within the next year or so.