Things may slowly be getting back to normal, after a rough couple of years, but that doesn’t mean construction contractors are in the clear. 2022 still has plenty of curveballs to throw the construction industry – some new and some leftover from previous years. Read on to learn about the top industry challenges facing construction contractors in 2022.
Cybercrime and Data Breaches
Cybercrime has steadily been on the rise. Over the past twelve months, alone, 75 percent of construction companies experienced a cybersecurity incident. Cyberattacks can have a devastating impact on a business – costing time and money to rectify and setting up a company for a risk of legal issues. It’s vital for construction contractors to have a plan in place to protect their IT resources and a mission to practice better cybersecurity.
Check out our previous blog post to learn more about data privacy.
Supply Chain Disruption and Material Sourcing Issues
The challenges in material costs and availability that were prevalent in 2021 continue to persist. In response to previous sourcing issues and thin inventory, many construction contractors are stockpiling materials and purchasing materials in bulk in lieu of buying these items on an as needed basis. This practice is a one-sided solution – solving the problem of having materials on hand, while causing further supply chain strain on the other.
The Continued Impact of COVID-19
The persisting COVID-19 pandemic and the impact of new and emerging COVID-19 variants has been causing strain on all areas of industry and across every facet of society. For the construction industry new variants wreak havoc on worker safety, morale, and participation – all consequences that trickle down to the job site. Construction contractors can plan for the next surge by developing a safety plan and exploring flexible benefit solutions, like hour banking, to meet the needs of their workforce.
The COVID-19 pandemic has created a host of employment, recruiting, and retention problems over the past two years. Going into 2022, 345,000 construction jobs were unfilled. This is quite concerning, especially considering that studies estimate that the United States will need one million new construction workers in the next two years. For contractors especially, the continued threat of the pandemic, rising inflation rates, and insufficient fringe rate increases have made talent retention incredibly difficult across all factions.
The Road Ahead for Construction Contractors
The construction industry is incredibly resilient and there is plenty of opportunity on the horizon, with a strong construction market in the forecast for 2022. Challenges with project costs, delays, and longer project turnaround will be offset by strong demand. Construction contractors are advised to remain diligent and cognizant of these challenges and to revise their contracts accordingly. Communicating expected delays and anticipating a response to 2022’s construction industry challenges is a must for construction industry owners and contractors.
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