Low Profit – High Production Cost
Nearly 63% of labor time on mega-construction projects is wasted waiting on building materials and/or equipment, getting to & from the work area, early breaks or extra breaks & planning on how to do the work according to a study conducted by COAA (Construction Owners Association of America) as well as adhering to state & federal legislation. This lack of, delay or quality of productivity directly affects the profit margin of a construction business, typical margins for construction companies range between 2-8% of the contracted amount to complete a construction project.
Gauging Project Performance
The opportunities in construction are in abundance & forever growing. However as the complexities of the projects evolve with most construction firms already operating under paper thin profits & barely staying afloat a singular project flaw can completely diminish profits. Design complexity is a major contributor in these flaws. As designs become larger, more extravagant and require more efficiency, construction firms are finding it challenging to maintain a steady profit of margin & gauge the performance or success of a construction project.
Lack of Availability of Skilled Labor
Recent collapses in global economy & finance has resulted in the construction industry seeing a dramatic reduction in workforce. As per the AGC (Associated General Contractors of America) nearly 74% of construction business owners believe that consolidation n skill trades & 53% of construction business owners said they were unable to hire skilled construction professionals like supervisors, engineers & estimators. This combination of increased project complexity and decrease in experienced skilled workers is a risk enhancer, increasing the risk of delays in deliverables, quality of construction & employee safety adherence.
Sustainability & Global Environmental Protection
In a global scale, it is a known fact that the Construction industry is one of the largest consumers of raw material. The construction industry directly & indirectly combined contributes to approx. 25-40% of global carbon emissions. Climate change & water management are the two of the greatest challenges that present a threat to construction businesses around the world including the U.S.A. who will have a great challenge & a vital role in coping with & meeting global carbon dioxide emissions reduction & setting the right example for other countries and construction businesses.