As 1Q23 nears its completion, construction business owners are wondering what’s in store for the remainder of the year. The Association of Professional Builders (APB), a construction business coaching and development company, says residential building may not be as tumultuous as in 2022.
Here are APB’s predictions for 2023 residential construction:
- Decline in demand – Interest rates will continue to reduce demand for new home construction. It should “return to normal” by 4Q23.
- Home prices may decrease but materials costs won’t – Lumber and steel may reduce in cost but inflationary increases for other building materials will jeopardize profit margins.
- On-time deliverables/risk coverage continue – One of the lessons we learned from the pandemic was not to overextend our construction businesses. Many of us won’t sign contracts if we aren’t ready to build now. Most bids also include cost-escalation clauses.
- Mental health issues will dominate – Anxiety and depression among builders increased in 2022. As workforce shortage, supply snafus, and high prices continue, builders’ burnout will be a challenge for the foreseeable future.
(The construction industry has the second-highest suicide rate among all industries.)
- Professionalism increases – Negative blue-collar stereotypes hampered construction industry career growth. We will standardize more effective recruiting and training processes to attract and retain the kind of skilled workers we need.
Most construction industry companies develop marketing strategies only to combat temporary economic slowdowns. APB says construction business marketing should be business-as-usual for your organization rather than damage control.
When surveyed, builders said the lack of qualified, actionable construction business leads was one of the biggest challenges. Despite that, social media activity decreased last year.
Of the residential construction business owners surveyed:
- 64% never created blogs
- 60% didn’t utilize email databases
Even when business is good, “It’s important to keep demand exceeding supply,” says the marketing company. When you focus on strategies for business development, you can be more selective about the jobs on which you bid.
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