Construction Challenges in 2024: A Shared Struggle for Builders and Trades

The residential construction industry is making a slow and steady comeback, but that doesn't mean it's without its challenges. Both homebuilders and trade contractors are facing a unique set of circumstances that are impacting their bottom lines and efficiency. Here's a look at some of the biggest trends affecting both sides, and how technology can help.

• Labor shortage: A chronic lack of skilled labor continues to plague the industry. According to a recent survey by the Associated General Contractors of America, 93% of construction firms report having open positions they struggle to fill. This makes it difficult for builders to assemble the teams to complete projects on time and budget. Trade contractors must also combat the labor crunch when staffing their crews.
• Material costs and supply chain woes: The cost of key construction materials like lumber, steel, and concrete has skyrocketed over the past couple of years. Coupled with persistent supply chain bottlenecks and delays, this volatile market for materials is forcing builders and trades to grapple with cost overruns and project stalls. Careful inventory management and flexible procurement processes are essential.
• Tech-savvy customers: Homebuyers are more educated than ever, with firm expectations for smart home tech, energy efficiency, indoor air quality, and intelligent design. Both builders and trade contractors must have the expertise and technology integration abilities to deliver on these amenity and performance demands. Failing to keep pace can put firms at a competitive disadvantage.

• Faster construction times: In hot housing markets, homebuyers are eager to take possession of their new properties as quickly as possible. This puts intense pressure on builders to tighten construction schedules and compress build cycle times. Achieving faster builds requires extremely efficient scheduling, tight coordination between trades, and streamlined communication/documentation processes across all project stakeholders.
• Difficulty obtaining permits and approvals: The permitting process for new construction can be complex and time-consuming, often involving multiple government agencies and lengthy delays. These delays can disrupt construction schedules, push back completion dates, and ultimately cost builders money.
• Scope creep and change orders: The collaborative nature of custom home building can lead to scope creep, where the project's requirements and specifications change mid-construction. This can be caused by homeowner indecision, desire for upgrades, or unforeseen site conditions. Frequent change orders can disrupt the building process, increase costs, and damage relationships between builders and homeowners.

• Tight deadlines: As builders push for faster build times, trade contractors must work within tighter construction windows. Missing a deadline has a domino effect - throwing off the cadence of subsequent trades and ultimately delaying the entire project. Seamless communication and scheduling integration with builders is critical to avoiding conflicts and rework.
• Project cost management: Escalating material costs combined with labor shortages are severely squeezing trade profitability. With less margin for error, trade firms must find ways to drive maximum efficiency while carefully monitoring and managing job costs. Even small miscalculations or missed billable items can derail project finances.
• Integration and communication: Trade contractors often concurrently juggle projects for multiple builders and developers. With each builder potentially using different software systems and processes, it creates islands of data and communication breakdowns. Keeping all parties, documentation, and workflow seamlessly integrated is an increasing challenge.

• Cloud-based project management: Centralized construction project management software enabled by cloud technology allows builders, trades, architects and owners to collaborate in real-time regardless of location. All stakeholders can track progress, manage dependencies, share files and communicate issues from a unified platform accessible on any device. This promotes transparency, accountability and early detection of potential problems.
• Digital estimating and bidding: Digital takeoff, estimating, and bid management tools help contractors quickly and accurately price jobs by tapping into continuously updated material/labor cost databases. Builders also benefit by receiving consistent, apples-to-apples pricing from their trades. The days of ponderous spreadsheet bids are over, facilitating smarter pricing strategies.
• Mobile workforce apps: With proliferating mobile apps, field teams for both builders and trades can remotely log updates, submit reports, share photos and videos, and stay connected, with progress data flowing continuously between the office and jobsites. Issues can be escalated immediately before they become major headaches.
• Software integration: Modern construction software is built for seamless integration with other technologies used across the build cycle - from accounting, 3D design tools, customer experience platforms, ERP systems, and more. This eliminates productivity-killing software silos and workflows. Data flows freely across functional boundaries.

In residential construction, staying ahead means embracing innovative solutions that streamline processes and enhance efficiency. From production home builders seeking seamless project management to trade contractors aiming to optimize their workflow, the challenges are diverse, but technology offers a promising path forward. Let's explore how three ECI cutting-edge software solutions transform the residential construction industry.

For production and semi-custom home builders, MarkSystems stands as a beacon of efficiency in residential construction. Serving as a comprehensive cloud-based ERP solution, MarkSystems consolidates every aspect of the construction process into a unified platform, from prospecting to warranty management. Builders can optimize operations, reduce errors, and accelerate project timelines with fully integrated accounting, scheduling, purchasing, and more. MarkSystems empowers builders to navigate their projects' intricacies confidently by fostering communication and providing real-time insights.

Key features

• Accounting, purchasing, estimating, and warranty
• Scheduling, sales office, and design center
• Land development and portal (ITK) for vendors/homeowners/supervisors

Benefits

• End to end system helps users reduce errors, eliminate redundancy, and improve the accuracy of information shared between departments
• Reduce costly purchasing, production mistakes, or project delays and improve teamwork and efficiency across the organization
• Reduce build cycle times and minimize variances

Custom home builders and remodelers face many challenges in managing project complexities and ensuring seamless communication. Enter BuildTools, a project management software tailored to address these unique demands. From budgeting and scheduling to document management and communication, BuildTools centralizes project information, empowering builders to organize and streamline their operations. With features like bid management and daily logs, BuildTools simplifies collaboration with subcontractors, ensuring transparency and efficiency throughout the project lifecycle.

Key features

• Estimates & proposals, bid management, and scheduling
• Budgeting, selections, tasks, daily logs, communication, Project Poster, and documents
• Photos, change orders, purchase orders, meeting minutes, and financial statements
• Cost Catalog, accounting integrations, and work-in-progress reports

Benefits

• Streamlines the bidding process and makes it easy for subcontractors to submit their bids
• View project schedules for all your resources, for example, subcontractors and employees, across all your projects
• Send documents to a group of subs and lets them respond to the bid via email or by going into the system

Trade contractors play a pivotal role in residential construction, and Bolt is their ultimate ally in optimizing workflow and maximizing profitability. Designed by trades, for trades, Bolt offers a user-friendly web and mobile-based solution that simplifies project management and scheduling. From estimating and time tracking to job confirmations and communication, Bolt equips trade contractors with the tools they need to succeed. With features like quick job documentation and instant support, Bolt minimizes wasted trips, enhances communication, and drives profitability for trade contractors of all sizes.

Key features

• Scheduling, estimating, job confirmations, and time tracking
• Job Visuals, project management, and reporting
• Job profit, mobile app, and communication

Benefits

• Solve issues in 15 seconds instead of 15 minutes
• Prevent wasted trips to the job and add profit to the bottom line of every job
• Document the verbal agreements you have with a builder
• Quickly see your per-job profit and loss

The residential construction industry is ripe for transformation, and these three innovative software solutions are leading the charge. Whether you're a production home builder, custom home builder, remodeler, or trade contractor, embracing technology is key to overcoming challenges and achieving success in today's competitive landscape.

By leveraging these advanced tools, home builders and trade contractors can streamline operations, enhance collaboration, and drive profitability in the ever-evolving world of residential construction. An integrated technology strategy quickly becomes the not-so-secret weapon for dominating the competition.