Industry, general trends shape construction customers’ needs

Ten Trends—Part I

As part of our strategic planning, my company is trying to identify trends that will affect the future of the construction industry. What major issues do you see for building product marketing during the coming decade?—J. W. H., market analyst

Many forces that affect other industries also shape construction, but with results unique to our industry. The following significant issues should be considered as part of your look over the horizon.

1. Greening
Environmentalism uses both sticks and carrots as incentives. Legislation and court action are the sticks. Regulation of certain products portends enormous opportunities for companies that can introduce successful substitutes. Regulated substances include volatile organic compounds in paint, chlorofluorocarbons in air conditioning equipment, and asbestos.

The carrots are consumers who increasingly prefer products considered safe for humans and the environment. Herman Miller enjoyed outstanding public relations last year when it announced plans to drop its veneers made from endangered rain forest woods. Relocatable partition manufacturers are repositioning their systems as the environmentally safe alternative to waste disposal problems associated with conventional walls.

Expect a strong demand for energy- saving products such as high-performance glass and more efficient plumbing and lighting. Also in demand will be products and services to abate existing hazards such as contaminated soil and lead-based paint.

With waste disposal costs increasing, consider ways to reduce your product’s packaging. Find ways to recycle scrap or demolished materials. Waste gypsum board is now collected and sold for agricultural use, for example, and a growing franchise chain reconditions and sells used carpet.

Many buildings are planned for a relatively short commercial life. Environmental impact statements and financial pro forma eventually could be required to consider the cost of disposing of a building and restoring its site. This could stimulate demand for products and systems with longer service life and flexibility to accommodate change.

2. Demographics
Aging baby boomers affect not only the types of buildings built but also how they are built. The “age wave” will stimulate demand for health care and nursing home facilities, trade-up housing, and other types of buildings catering to a mature market. Along with this will come a preference for more conservative colors and styles.

The related “baby boomlet” is creating a resurgence in school construction which has not peaked yet. Look for niche opportunities to position products for these markets.

Another demographic shift is a slow but steady increase in the number of women in design and construction decision-making positions. This has already meant a decrease in “cheesecake” photography in advertisements and product literature. Catalogs must be designed to appeal to both men and women. Mass mailings should not use phrases such as “Dear Sir.” Male-oriented sales meetings will hurt a company’s image. Good sales presentations will target women as part of the audience. Products may be restyled to appeal to female buyers and users.

3. Existing buildings
The value of remodeling, reconstruction, and rehabilitation of existing buildings exceeds that of new construction. Most building products are designed for new construction and then adapted with varying degrees of success for use in existing facilities. This creates tremendous opportunities for products and systems designed expressly for remodeling. Manufacturers and their dealers or contractors should look for ways of tapping the aftermarket for maintenance and services.

4. Construction labor
Many areas of the United States will experience a labor shortage in the construction trades. This is partly due to demographics, with baby boomers now past the age of entry into the field and their children still too young. But it is also due to a change in attitude in which construction is viewed as low-tech, corrupt, unsafe, and without job security or adequate rewards.

Manufacturers should respond with products that require less labor or fewer skills. Prefabrication, easyto- assemble building systems, and labor-saving products should do well.

Construction remains among the most hazardous occupations in the country. Building material and equipment manufacturers should be in the forefront of the effort to change this.

Construction trades are still dominated by small, independent firms that are undercapitalized and have difficulty benefiting from advances in technology and management. The industry is ripe for innovative approaches to franchising or networking to provide contractors better purchasing, marketing, and management support.

5. Construction as manufacturing
Some aspects of construction are like build-to-order manufacturing, and building systems installation sometimes takes on characteristics of mass production. Construction theory, however, has focused on the differences between manufacturing and construction. Now, advances in manufacturing management are moving out to the jobsite.

New scheduling and management software may be an agent in this movement. The just-in-time manufacturing and purchasing concept reduces onsite losses and the interest and handling costs for stored materials. Large contractors are establishing direct electronic links with their major suppliers to handle order entry, credit, and delivery.

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By Michael Chusid
Originally published in Construction Marketing Today, Copyright © 1991