Every year, the Associated General Contractors of America (AGC), in partnership with Sage, surveys contractors from across the US on a variety of topics impacting the industry. The 2024 Construction Hiring and Business Outlook survey revealed some key trends. Nearly 1,300 contractors from around the country provided insights on topics such as hiring, project delays, and technology investment. Overall, contractors have a decidedly mixed outlook for 2024 as they predict transitions in demand for projects, the types of challenges they will face, and the technologies they will embrace.
“2024 offers a mixed bag for construction contractors: on one hand, demand for many types of projects should continue to expand and firms will continue to invest in the tools they need to be more efficient,” said Stephen E. Sandherr, the AGC’s chief executive officer. “Meanwhile, they face significant challenges when it comes to finding workers, coping with rising costs and weathering the impacts of higher interest rates.”
As the industry navigates challenges such as the qualified worker shortage and rising interest rates, technology will continue to play an important role in helping teams increase their efficiency with limited resources. Nearly all firms plan to increase or keep their current level of investment in software. Only 1 percent of respondents expect to decrease investment in any of the 15 technologies included in the survey.
Most respondents, ranging from 61 to 89 percent, say their investment will remain the same as last year in each of the 15 technologies. The top categories for increased technology spending are accounting software and project management software, both with 38 percent of respondents planning to increase their investment. Close behind is document management software, with 36 percent of firms expecting to increase their investment. Thirty-one percent plan to increase spending on estimating software. All of these percentages are higher than in the 2023 survey.
The biggest change was in accounting software, which saw a 13% increase over last year. This is not surprising as more construction businesses realize the value of a robust financial management solution. Having the right accounting solution that can navigate the complexities and nuance of construction financial management is critical to helping construction firms remain competitive and grow their business. Advancements in construction accounting technology automate many key accounting functions, ensuring businesses always have real-time insights into their financials, and freeing up more time for financial leaders to focus on strategy and increasing their bottom line. The impact is even greater when accounting solutions are integrated with project management and preconstruction solutions, two other top categories for increased technology investment.
Cloud-based and Mobile Technology
As construction firms seek more flexibility and anytime, anywhere access from their solutions, we have seen more firms turning to cloud-based technologies the past few years. The most prevalent use of cloud-hosted technology is in project management, cited by 58 percent of firms. Nearly half use cloud technology for accounting (48 percent) and field operations (47 percent), while time tracking is noted by 46 percent. However, only 17 percent list tool management, while 20 percent say they do not use the cloud. These percentages are little changed from the 2023 and 2022 surveys. The biggest gains over last year are in accounting (5 percent) and time tracking (4 percent) software.
As we’ve seen in previous years, when it comes to the use of mobile software technology, the adoption numbers are higher. Two-thirds (67 percent) of firms are using mobile software for daily field reports, while 59 percent will use mobile technology for employee time tracking and approval. More than half plan to use mobile software technology for employee time tracking and approval (59 percent), access to customer and job information from the field (58 percent) and sharing of drawings, photos, and documents (54 percent). Other widely cited uses include access to job cost and project reports from the field (48 percent), punch lists and scheduling (42 percent each), and equipment tracking (41 percent). Only 8 percent of firms report having no plan to use mobile technology.
Top IT Challenges
While technology delivers a host of benefits, firms cite several IT challenges. Among the biggest IT challenges noted by firms, three stand out. Forty-three percent of contractors say it’s difficult to find the time to implement and train on new technology. Forty-two percent of firms mention keeping company data secure from hackers, while 41 percent cite employee resistance to technology. These were also the top three challenges cited in last year’s survey. In addition, 35 percent point to connectivity to remote job sites as among the biggest challenges and 33 percent list communication between field and office.
Technology will continue to play an integral role in helping contractors succeed amid current challenges. Cloud and mobile technologies in particular help ensure teams have real-time data and insights anytime, anywhere, while streamlining operations, automating time-consuming and error-prone tasks, and improving collaboration and communication between all stakeholders. Businesses will need to prioritize technology and make it a part of their business culture to overcome the hurdles of finding the time to implement and train on new technology and employee resistance to technology. Once businesses make that commitment, cloud technology can help alleviate many other challenges cited by keeping data secure, providing connectivity to remote job sites, and improving communication between the field and office. Implementing the right technology can give businesses a competitive advantage as they navigate uncertainties in the year ahead.