It’s a busy time right now in the commercial construction market. And with the market stronger than it’s been in years, we’re seeing opportunities and challenges.

The Bureau of Economic Analysis reported that 2017 ended with the U.S. economy growing 2.3%; up from 1.5% in 2016. In 2018, Q1 ended with a 2% growth and the U.S. economy is set to boom. With the economy strong, construction companies are busier than ever. Our customers are telling us that there is no shortage of jobs to bid, but it’s been challenging to find experienced estimators and field labor while material costs are soaring.

As I’ve been monitoring the market there are two topics that are keeping our customers up at night:

Tariffs and rising material costs. The June 2018 U.S. Bureau of Labor Statistics reported that construction material prices rose another .8%, which is 9.6% higher than they were the same time one year ago. We’re seeing heavy price increases in Crude Petroleum (49%), Iron and Steel (14%), and Softwood Lumber (23%) due to tariffs and other trade measures. Is there an end in sight? ABC Chief Economist Anirban Basu believes prices will continue to increase with no end in sight regarding the ongoing tariff spat.

Labor shortages. Another challenge is the construction labor shortage. “The workforce skews heavily toward middle-aged people and there aren’t enough young people getting into the trades to eventually replace them. As the labor shortage intensifies, it will push salaries even higher.”1 The impact is that it’s creating lucrative career opportunities for those interested in trades. The flip side is a decrease in project margins since companies need to increase compensation in order to attract new talent. It’s a balancing act in finding qualified workers and keeping project costs competitive.

It will be interesting to see how this all unfolds. In the meantime, subcontractors can protect profit margins in this uncertain time of price fluctuations and find skilled labor by using non-traditional routes.

I’ve included two posts that you may find helpful:

Construction Pros suggests adding provisions to the contract to protect yourself from price escalation or if your project is delayed due to material shortages. You can read the full post by clicking here.

To find skilled trades, CraftForce gives four creative ways for attracting new talent and you can read the article by clicking here.

The market future is unknown. However, using technology and specifically, estimating technology, can help with the uncertainty. Estimating efficiency is an area we know a lot about and are passionate about building solutions for the specialty trade estimators. In fact, we are developing new solutions designed to bring the estimate to the field that will help identify optimization and improve productivity.


About Adam Oaks

Adam Oaks recently joined The Estimating Edge as CEO. With more than 20 years of leadership experience, Oaks has held various executive positions ranging from start-up to mid-market ventures. He was most recently a partner at TechCXO, which provides on-demand executive services to both start-up and high-growth companies and served as the acting President for the past year at The Estimating Edge. Prior to TechCXO, Oaks served in various executive positions with IDology, and spent 14 years with Construction Market Data. Oaks was also an Aviation Officer in the U.S. Army prior to joining the corporate world.


1Morrison, Jim (2018, Aug 5). Construction Labor Shortage Creates Increasingly Lucrative Career Paths [Web post]. Retrieved Aug 6, 2018, from