Construction workers surveying a construction site

2020 Forecast for Construction: 5 Trends to Watch

4 min read • Dec 22, 2019 • Elizabeth Aldrich

Despite dealing with some urgent concerns in the present—from labor shortages to climate change to trade wars—the construction industry has a promising future. Urbanization has opened up a wealth of opportunities for digitally-savvy construction companies to partake in building tomorrow’s smart cities, and the housing crisis gives innovative companies the chance to improve the lives of millions of Americans.

To survive long enough to build that future, though, construction companies will have to incorporate emerging technologies and respond to the rising concerns of the modern world. Luckily, business owners can leverage construction financing to grow and adapt to new trends. Here are the biggest trends the construction industry should prepare for in 2020.

1. Sustainability and Green Technology

The movement toward sustainable materials and renewable energy will only strengthen in 2020, and the construction industry is at the frontlines. According to the World Economic Forum (WEF), the infrastructure and urban development industry is responsible for 30% of global greenhouse gas emissions. This industry is also the largest consumer of raw materials, and this consumption depletes our planet’s already scarce resources.

To combat these problems, the WEF developed the Future of Construction Initiative in 2015. Through 2021, the construction industry will be in phase 4 of the WEF’s initiative, which includes policy reform, system transformation, and the introduction of disruptors that can help construction transform into a more sustainable industry. It’s clear that in 2020, companies that can innovate and make construction practices greener without driving up cost will win out. 

2. Youth-Focused Training Programs

The construction industry has struggled with a qualified worker shortage for several years now, and it’s going to get worse before it gets better. Fox Business reports that 80% of construction firms are struggling to fill hourly and craft positions, according to a survey from the Associated General Contractors of America.

In addition to 300,000 job vacancies in construction as of June 2019, the industry will need to fill another 747,000 positions by 2026. At the same time, many trained and skilled construction workers are nearing retirement age while younger generations now entering the workforce are largely uninterested in construction—and it’s not because they’re lazy. Most millennials and Gen Z folks perceive the industry as low-paying and dangerous, and they tend to opt for 4-year degrees over trade careers.

There is an upside. Given the student loan debt crisis and the difficulty many college graduates have finding well-paying work, the construction industry has a massive opportunity to change the way younger generations perceive it. In 2020, construction companies will need to offer higher wages, better bonuses, and other rewards to improve retention and compete for the small pool of available skilled labor. However, the industry will also have to start focusing on long-term solutions to its labor shortage problem, such as offering more robust skilled-trade training and engaging at the student level.

3. Robotics and Automation

Another oft-cited solution to the worker shortage in the construction industry is the implementation of technology to replace human employees. While the construction industry has been slow to take advantage of emerging technologies that facilitate automation, doing so will become more necessary in 2020.

Over the past couple of years, technology startups focused on the construction industry have been cropping up left and right, and venture capitalists have poured billions into construction tech. A number of new construction robotics companies, which function like contractors for construction companies, have emerged, promising to replace human employees with technology that can work faster, longer hours at a significantly lower cost. Construction companies that figure out how to adopt these new technologies in a cost-saving manner will come out on top.

4. Modular Construction

Many of the companies venture capitalists are pouring money into are modular construction startups—and with good reason. Estimates project that the modular construction industry will be worth over $157 billion by 2023. The growth of modular construction could help the construction industry cut costs by 20% and cut schedules by up to 50%, according to McKinsey & Company.

Builders who focus on sustainability, quality, and aesthetically-pleasing design to combat the stereotypes of prefabricated construction as ugly and cheap will win out in modular construction. McKinsey & Company suggests that modular construction will be particularly successful in places like the US west coast, the east coast of Australia, Germany’s bigger cities, and the southern United Kingdom due to both a shortage of workers and high levels of unmet demand for housing.

5. Data Analytics

As crucial as implementing new technology, embracing sustainable construction, and solving the worker shortage crisis will be, none of it will matter if construction companies don’t prioritize data and analytics. Integrating tools to model and analyze data will allow construction companies to move to making predictive rather than reactive business decisions, a shift that’s crucial for any company that wants to remain competitive for much longer.

Most construction sites nowadays are filled with valuable data, but construction companies have largely failed to make good use of that data. They’re finally starting to come around, and in 2020, expect to see the construction world finally embrace data analytics.

Other construction trends to look for in 2020 include wearables, drones, and augmented reality to improve surveying. By looking ahead to the future, construction companies can better keep up with the present.


Elizabeth Aldrich

Elizabeth is a freelance writer covering personal finance, business, and travel. Her writing has appeared in The Motley Fool, Business Insider, Yahoo! Finance, LendingTree, Student Loan Hero, FOX Business, and more.