The 2023 “How We Build Now” report is out. This study focuses on the technology and industry trends shaping Canadian construction in 2023. In the report, prepared and executed by the team at Procore, construction owners, general contractors, and subcontractors share their perspectives on the current state of the construction industry.
The comprehensive survey dives into a range of topics, covering digitization, workforce wellbeing, labor challenges, and sustainability. The survey gathered responses from 502 construction industry stakeholders in Canada, from owners, general contractors, and subcontractors. The breakdown of respondents was 33% were owners, 34% were general contractors, and 33% were subcontractors.
In this analysis, we wanted to focus on and highlight the trends and responses specifically from owners. We’ll hone in on how owners are feeling around their business, finances, and technology in 2023.
Among owners and developers, 36% expressed strong confidence in the construction industry market conditions, while 51% felt somewhat confident, and 12% were not confident. Interestingly, the percentage of owners who felt strong confidence in their business outlook was lowest in comparison to general contracts and subcontractors.
With rising project costs, interest rates, and labour shortages [Blackridge], it’s not a surprise that owners and developers anticipate are feeling the least confident about their business outlooks for 2023. In particular, 24% of owner respondents felt that future projects would come with substantially higher costs. This was outpaced only by subcontractors who where 30% felt costs would go up substantially (likely driven by labour).
Growth in Projects
Another interesting finding was around the expected increase in projects on a per industry basis. Here is what was reported:
We know that construction owners can be found in any and all verticals. Owners in energy and utilities, as well as civil and infrastructure, seem confident that they will have more and more projects ahead. Meanwhile, that confidence is not as easily present in healthcare and education where only about half of respondents were confident they would have more and more projects.
Projects and costs by Province
At a province-by-province level, as expected we saw with a majority of respondents in Quebec & Ontario anticipating substantial to slight growth. One breakout province was Saskatchewan, where over 40% of respondents expected substantial growth. This digit was almost double what Quebec & Ontario respondents felt. It appears that there is a lot of confidence that Saskatchewan will continue growing!
In terms of costs for projects, Quebec and Ontario lead in confidence that the value of their projects will experience substantial growth, surpassing all other provinces or areas, such as the Atlantic region, by a significant margin.
When looking at key stats in project finances, we see a few interesting stories come out. On the one hand, over 53% of contractors reported experiencing cash flow problems due to delayed payments, while 39% of owners reported receiving invoices that did not match the amount of work completed.
This highlights the classic push-and-pull of construction management. Owners, contractors, and their subcontractors, form a partnership to get the work done. Generally speaking, the interests of all parties are aligned: get the job done, on time and on budget. The struggle between contractors getting paid on time and owners receiving accurate invoices is just one example of how complex managing a construction project can be.
As the industry moves forward, it’s obvious there is room for improvement and efficiencies, in financial management and beyond! These improvements can be achieved through a blend of innovative technologies and the willingness for construction professionals to try new things.
A major component of the survey, unsurprisingly, centered around technology adoption and maturity. When respondents were asked how they would define the digital-readiness of their organization, owners reported the highest percentage of respondents that felt they had a “digital-first business” at 28%. Given the unique role an owner plays for any construction project, it’s not surprising to see they are leading in that sentiment. Owners can really set the scene for what sort of platforms and tools should, or could, be used by contractors and sub-contractors. This isn’t to say there is a one-sized fits all, but owners can being their own systems to the tables that can “speak” (e.g. exchange data or integrate) with technology being used by their 3rd party partners.
This all plays well into the stat that 12% of total spending on projects can be saved with more efficient data capture and standardization. Owners can lead the charge in this by outline reporting portals or requirements with their partners. Better yet, some data capture can be done automatically with the right tools and integrations. All of this would also save owners a portion of the 17% of overall project time spent simply searching for the right data and information.
What kind of technology though?
Respondents were asked to speak to their usage or interest in about a dozen construction categories related to construction. These range from construction management platforms, business intelligence systems, and BIM all the way up to drones, AI, and robotics.
Unsurprisingly, more easily accessible and present technologies like construction management platforms, BI systems, and BIM were the top ranked in terms of current usage, or soon to be deployed. Things like BIM 4D, AI, and extended reality tech like AR/VR, all ranked last in terms of current or near-future usage.
What is most surprising in these stats, is that between all respondents, only about 25% were actively using something like a construction management platform. In a world where cloud-computing makes accessing and using software as easy as a few clicks, there is still a lot of the construction industry being done with increasingly older methods and systems.
Through the adoption of proven and readily-available solutions like a construction management platform, owners will only be better positioned to take advantage of future technologies like AI, machine learning, Internet of Things, and so on. These advanced, but quickly approaching, technologies rely on readily available data sets to provide the maximum value. An organization that sets up and starts using something like a construction management platform today will be better positioned to have that sort of structured data for the future.
In conclusion, we see some very interesting statistics come out of the 2023 edition of the “How We Build Now” report. From the industry-wide findings, down to the more specific owner needs, the construction space is continually going through change & upheaval. It appears owners are feeling more concern about the future prospects of their business or organizational outlook with a lot of factors playing against them. Despite that, there will still be an increase in the amount of projects in the short-to-medium term. From a technology standpoint, it’s evident the industry has advanced to a good starting point, but that more adoption and exciting advancements are still ahead. We are here for all of it!
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