4 Reasons Why The Construction Industry Is Losing Money.

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The construction sector remains optimistic despite slow progression and investments during the previous years. There is a good reason for optimism: A future without buildings is unlikely. However, for construction businesses to remain relevant in a competitive market, it has become essential to go the extra mile and provide reliable, cost- and time-saving services.

In 2022, construction sites should not incur costly delays and breakdowns. Indeed, innovative technologies and smart planning methodologies have already provided a variety of helpful solutions to make the building industry better for all.

If the construction industry is going to improve its image and erase the clichés – late and expensive completion – it’s time for building businesses to move their processes into the 21st century. Here are the top 4 reasons why the industry is losing money and how to fix it:

#1. They don’t secure the required machinery in a timely manner

On small construction sites, it’s not uncommon for the construction team to skip project management processes in an effort to save time and money. Unfortunately, it can be a false economy. A project manager acts as the organiser for the site, planning resources, materials, and skills throughout the project.

The project manager provides the necessary overview. As such, your PM organises not only contractors’ work but also equipment availability, such as planning for a static concrete pump rental for a specific period. Without the management overview, the construction team has to arrange for equipment as they need it, which means that last-minute rentals can cause delays. As the team brings the construction to a stand until the delivery of the necessary equipment, stakeholders and clients have to finance the idle project.

#2. Small businesses lack the appropriate financial cover

While more and more construction businesses are careful about health and safety training and risks, many fail to adjust to the growing demand on city sites. The increasing trend of hiring multiple small construction companies to maximise progress on one site can lead to accidents, damages, and, therefore, costly delays.

More often than not, small businesses fail to consider the broad range of risks and dangers on shared sites. Indeed, with more and more construction sites appearing in city centres, it’s important for businesses and contractors to analyse risks and get the right cover for their activities.

Far beyond the realm of vehicle insurance, construction companies also need to consider a variety of protection such as all risks insurance, product liability and public liability insurance, latent defects insurance, professional indemnity insurance, etc. Indeed, construction projects can involve physical damages to the site material or the works, the risk of professional negligence, injury to workers and the public, damage to property, etc.

As such, failing to consider any of the necessary insurance types could have a dramatic effect on your finances as a construction business. Additionally, it can also slow down the completion of the project and affect your reputation.

#3. They don’t see mistakes in real-time

It’s hard to maintain your overview of the building design when you work on small details. As such, it’s not uncommon for constructors to discover too late that they are not progressing according to the design or schedule.

Whether things are going too slow or whether progress is stopped by human errors, site managers traditionally relied on periodical checks and audit to monitor work. However, in the 21st century, it’s time for small construction companies to implement VR technology that let them see in real-time how their work compares to the BIM model.

A VR set, or even an AR app that links to the BIM plan, can prevent many costly issues by helping contractors to follow the models and address last-minute changes effectively.

#4. They don’t think of the big picture

When you live in town, you know that there is never just one construction site. More often than not, multiple sites coexist within the same space, even though they are managed by different companies and receive the investments of different stakeholders. As such, it would appear normal that sites that nothing brings together remain separate. However, construction sites bring disruption to urban life and the pool of construction specialists and equipment.

Aside from commute delays and blocked roads, site managers find themselves forced to put their project on hold when the necessary machines, experts, or agencies carrying out important things like a phase 3 environmental site assessment, are already tied to another site. Cooperative planning and collaborative work could reduce these expensive construction delays. Overseeing resources and assets throughout multiple sites is the responsibility of project managers, who could liaise with each other to maximise their productivity and results.

Innovative thinking and creative technology have the power to revolutionise and improve the construction sector dramatically. From failure to analyse the needs and risks of a specific project to a lack of coordination between sites, assets, and stakeholders, the construction industry needs to deliver strategic business intelligence to grow the sector to the next level.

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Like Minds is a global thought leadership platform delivering world class events on business development, knowledge and insight aimed at entrepreneurs and business leaders to engage, stimulate and empower them to become global businesses of the future. We also offer a bespoke service for corporate clients and training programmes under the Like Minds U brand. For more information please email bespoke@wearelikeminds.com