Construction is continually transforming, and contractors must adapt to shifts in the economy to survive. Traditional sectors that contractors long thrived in may no longer offer the same growth potential as newer, booming industries like data centers, infrastructure projects, multifamily buildings, and water treatment plants. To stay profitable and competitive it’s time to reorient, but with caution. The risks of inefficiency, miscommunication, and cost overruns are prevalent, but pivoting with an iron-clad strategy will help keep you afloat. Here’s why these industries matter, how you can pivot effectively with the right tech, and steps to make a smooth transition.
Hot Industries
The Rise of Data Centers
The rapid digitization of everything from entertainment to banking has led to an explosion in demand for data centers. These facilities serve as the backbone of the internet, housing critical infrastructure for cloud computing, AI, and more. The rise of 5G and edge computing means the need for more localized, smaller data centers is also growing.
→ Why Pivot: United States data centers are expected to grow at a CAGR of 10-11% through the next decade, presenting a massive opportunity for contractors.
Improving Our Infrastructure
The Bipartisan Infrastructure Law (BIL) is reshaping the construction landscape in the United States by providing billions in funding for infrastructure projects, including roads, bridges, water systems, and advanced manufacturing facilities. This influx of investment is creating substantial opportunities as the country looks to boost domestic production and strengthen supply chains.
→ Why Pivot: $480 billion represented over 60,000 projects ranging from repaving roads and water system upgrades is being funded through formula grants to states to competitive funding for massive bridge and transit projects.
Multifamily Residential Boom
In many urban centers, the housing shortage is driving up demand for multifamily buildings. This includes both affordable housing and high-end luxury apartment complexes. Cities and suburban areas alike are encouraging these projects to meet the needs of growing populations, driven by urbanization and changing demographic trends.
→ Why Pivot: Multifamily construction continues to boom as home ownership becomes less attainable for many. According to an LBM Dealers Report Lumber suppliers are seeing a 12.1% uptick in multifamily sales, and multifamily units under construction are up 9.7%. It’s a sector with long-term demand, offering contractors and suppliers ample opportunity to diversify.
Water Treatment Plants: A Growing Necessity
The pressing need for clean water, especially in growing urban areas and regions suffering from droughts, has put water treatment plants in the spotlight. Governments and municipalities are investing heavily in upgrading and expanding these facilities, often as part of larger infrastructure projects.
→ Why Pivot: There’s increasing investment in water treatment due to regulatory pressure and environmental challenges. It’s a long-term sector with both public and private funding streams, offering stability. STACK customer PCL Construction just landed a $600 million Wastewater Treatment project in San Diego.
Redirect Your Efforts with the Right Technology
STACK can help maintain profitability as you pivot into growing sectors by enhancing collaboration, improving decision-making through data, and optimizing processes. Be in the best position to succeed with:
Accurate Estimating and Budgeting
Hyperaccurate takeoff and estimating is crucial when entering new industries with unfamiliar pricing structures, materials, or labor needs. With STACK’s comprehensive platform you can also leverage real-time total project visibility with dashboard analytics to ensure accurate estimates by summarizing project by square foot, projected profit, and project details.
Resource Allocation and Labor Planning
Better predict job success and strategically allocate resources with accurate estimating in STACK. This is crucial when entering new sectors, where the types of resources required may differ significantly from traditional projects. With our powerful estimating tools, you can forecast labor needs and ensure the right teams and skillsets are available when needed and reduce costly delays due to resource shortages.
Streamlined Communication and High-Level Data Security
New industries may require working with different stakeholders, from engineers and suppliers to government officials. STACK’s 100% cloud-based platform enables smooth communication and collaboration across different teams, ensuring everyone stays on the same page, reducing the chances of errors and rework. When it comes to highly sensitive data from government or healthcare sectors, our industry-leading platform is SOC2 compliant, features SSO capabilities, and offers user settings to ensure that only authorized people have access to specific information protecting your data integrity.
Mitigate Risk with Plan Access and Issue Tracking
With STACK, all versions of projects are accessible anytime, anywhere in a centralized hub. You’ll have seamless project communication for RFIs, change orders, punch lists, inspections, tasks, and more avoiding rework, errors, and collaboration issues. In addition, you can leverage real-time data with Daily Reports, and include attachments, project photos, and automatic weather reports.
Using Data for Better Decision-Making
Using STACK’s dashboards, you have access to analyze large amounts of data about project performance, helping you make better-informed decisions. When entering unfamiliar industries, this data becomes invaluable in understanding trends, identifying inefficiencies, and optimizing processes.
Scalability
STACK can grow with your business. The construction industry is dynamic, and your software needs to adapt to changing demands. Our platform can handle larger projects, more users, has a robust, open API for integrating with your systems of process, and is highly flexibility in terms of customization and configurability to your specific workflows.
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Make it a Smooth Transition
Pivoting to these booming industries isn’t just about expanding services, it’s about mastering the specialized knowledge each sector demands. Here are some additional strategies to ensure a smooth transition:
- Invest in Training: Make sure your team is certified and up to date on the specific requirements of these new sectors, whether it’s cleanroom protocols, advanced electrical systems, or modular construction techniques.
- Partner with Experts: If your team lacks expertise in a specific area, consider forming partnerships with specialists who can consult and lend knowledge.
- Stay Ahead of Regulation: Booming industries often come with tight regulations, especially those that are publicly funded or heavily tied to environmental laws. Ensure your team is well-versed in compliance to avoid costly delays.
- Focus on Long-Term Relationships: These sectors offer opportunities for ongoing work, as facilities often need regular upgrades and maintenance. Building long-term relationships with clients in these industries can ensure a steady revenue stream.
The construction industry is undergoing a transformation, and the most profitable contractors will be those who can adapt to new opportunities. By pivoting toward these sectors, you can ensure your business stays profitable while expanding into high-growth areas. The key is understanding the unique demands of these industries and leveraging your existing expertise to meet them.
