Construction Outlook for 2023: Review of the Latest Forecasts

It goes without saying that the construction sector is ever-growing. But what to expect next year when it comes to building throughout the world? Especially if almost every day we hear about new-gen tech solutions and trends that bring to construction more automation and exceptional digital-friendliness. For example, decades ago estimators used to undertake manual procurement together with estimating, costing, and budget planning processes at the beginning of the project performance. It is possible to apply construction pricing software and provide accurate insights for a better quoting and bidding experience. The same story is about analytics and research experiences that are improved through AI-based algorithms. The present-day general contractors can explore forecasts and predictions for the construction sector modeled by machine learning tools. For example, it is seen that inflation is going to ease in building in 2023. But its growing statistics are not critical when it comes to building materials and other niche supplies. According to the latest research of American analysts, rising indices are expected for most directions of construction globally. This way, more and more objects are going to be built for manufacturing, transportation, lodging, and communication sectors worldwide. Among other ever-growing directions are multifamily housing, healthcare, and commercial construction. Public safety building together with education premise construction are going to grow in 2023 as well.

Ever-Growing Construction Directions in 2023 to Take into Account

The most on-trend building directions are expected to be commercial and infrastructure construction. There is a high demand for manufacturing objects, highways, and lodging premises worldwide. According to the latest forecasts presented in the CMTO (Construction Market Trend Outlook) documentation by analysts from the USA, multifamily housing, transportation, and communication construction orders are going to be on the rise as well. There are sectors where growth is expected from 1 to 4% in 2023. They are:

• Public safety;
• Healthcare;
• Education.

All the above-mentioned construction directions are expected to demonstrate growth in orders, CPI (Consumer Price Index), and pricing in general together with higher expenditures and profit margins. It will be possible to pretend on high-profit margins in these niches, especially if contractors opt for digital tools for their business like construction bidding software, robotics, machine learning, BIM software, etc.

Declining Construction Sectors in 2023 According to the Analysts’ Forecasts

There are construction sectors that are going to perform decreasing statistics according to the following factors in 2023. For example, spending volume and profit margins will decline for four building directions worldwide:

• Single-family housing;
• Power construction;
• Reconstruction and improvements of premises;
• Office building.

But the situation in these construction sectors can change from declining to growing if customers’ demands change according to the trends and global requirements caused by the ongoing events. For example, the new coronavirus outbreak with quarantines or crisis in the local markets can bring variations to the presented predictions on the ups and downs of indices.

The Current Challenge of Supply Chains in the Construction Industry  

It is worth noting that the construction sector faces lacking building materials or failed supply chains. For example, the price of electrical gear generators, HVAC systems, and wood-based supplies is expected to grow in 2023. Plumbing materials, components for roofing, and architectural interiors will obtain the same price tags. But the number of suppliers is not expected to increase. That is why gaps in the supply chains also can take place. Speaking about current lead time limits, they can vary from one supply chain to another. Analysts state that figures can differ from 10-13 days for wood-based building materials and up to 52-80 weeks for electrical gear generators or the same electrical components to supply, install, and maintain.

Construction Trends in 2023 to Take into Account

The hot-topic trend in the construction sector for 2023 is about reopening domestic distribution hubs. These channels are going to maintain healthy conditions of supply chains locally. After quarantines and the coronavirus outbreak, it is high time to renovate all the networks to provide builders with building materials and other supplies timely. Do not forget about optimizations through mobile-friendly and digital-friendly transformations. More and more contractors switch from manual operations and paper documentation flows to automated on-site processes, AI-based analytics, and paperless workflows. This range of trends will bring faster and more profit-driven approaches in the context of companies’ performances in the niche. The same story is with positive changes in the supply chains and any interactions in the context of the building pipeline (partners, subcontractors, investors, suppliers, etc.).