“Statistics are like a drunk with a lamp post: used more for support than illumination,” — Winston Churchill.
I love this Winston Churchill quote. It’s my second favorite one, in fact. My favorite, of course, is this pithy saying of his: “When you don’t know the origin of a quote, simply follow the lead of every other idiot on the Internet and attribute it to me.”
I have no idea if he actually said that about statistics, since 95% of Churchill quotes circulating online are fake, as someone once said. Probably Churchill. But the sentiment rings true: statistics by themselves don’t really tell you that much, it’s the context surrounding them that tells the real story. The stats are just there to support the point.
The same is true for construction statistics. We’re all aware of general trends, but statistics, when used as a supporting point, really help cement which trends are important and which are just noise. And when you step back and look at the broader picture in construction management, five statistics stand out.
1. $35.4 Billion:The increase in the total value of construction projects nationwide in the last year
The construction industry is growing at a healthy clip. The U.S. Census Bureau estimates that the total value of construction put in place in the month of January 2017 (seasonally adjusted) was $1.18 trillion. That’s an increase of $35.4 billion compared to the same time last year, or a 3.1% increase. (Tweet this stat!)
But there’s a deeper story hidden within those numbers: the growth greatly differs depending on whether you’re in residential or non-residential construction.
Growth has been a lot stronger lately on the residential side (which includes remodeling), increasing 5.5% from $456.6 billion in January 2016 to $481.9 billion in January 2017.
The growth has been a lot more sluggish on the non-residential side, increasing by just 1.5% over the same time period (from $688.3 billion to $698.4 billion). But again, a deeper look at the numbers tells a more nuanced story. Commercial projects have been chugging right along with a 10.6% increase over that period. The public sector is what’s holding the non-residential category back: there’s been big decreases in public safety, transportation, road, sewage, and water supply construction projects. With a new presidential administration taking the reins that is promising big infrastructure investments, however, that could change in the coming years.
2. 16%: The increase in construction industry fatalities between 2012 and 2015
Construction spending may be increasing, but something not so nice has been increasing as well: fatalities. The Bureau of Labor Statistics reports that 985 construction workers died in 2015 in the United States, an increase of 16% over 2012’s total of 849.
It’s a sobering reminder that construction work is a dangerous job. Construction is the 11th most dangerous profession in the nation based on fatal occupational injuries per 100,000 full-time workers.
The onus is on you, the construction manager, to provide a safe environment for your workers. And no matter what needs are pressing on you at the moment, you cannot lose sight of worker safety for even a moment. A reminder that nearly a thousand workers died in 2015 on construction projects will hopefully keep that truth in the front of your mind at all times.
Want to prevent construction injuries? Pay attention to OSHA’s guidelines, invest in safety-focused construction management software like Intelex, Safesite, or HCSS, and invest in properly training your contractors.
3. 10.6% – The percent of a construction project’s cost that falls under “other”
Going over budget on a construction project is a fact of life, but it’s a big problem in this industry and it results in tremendous headaches for construction managers.
Is it possible your budget is off before you even begin? A report from the National Association of Home Builders found that 10.6% of the cost of a typical home construction project are things that can’t be categorized and get stashed in the broad “other” category. In the case of an average home construction cost of $184,125 as listed in the NAHB report, that comes out to $19,487 per build.
So after you’ve finished your budget accounting for excavations, materials, plumbing, wiring, HVAC, drywall, appliances, and all the other million things that go into a project, ask yourself this: are you tacking on another 10.6% for “other,” or are you just budgeting a couple thousand dollars for unforeseen expenses and hoping for the best? If it’s the latter, you may be setting yourself up for a cost overrun nightmare.
Plenty of things can surprise you in the midst of a construction project. You might encounter a jurisdictional fee or permit that you didn’t know existed for that locality. Surprise litigation can come out of nowhere if some sort of dispute arises, leading to costly delays. You may find decay and dry rot much deeper in your building site than you thought when you first inspected the location. Or, god forbid, perhaps you stumble upon some asbestos while on a roofing replacement project. The possibilities are endless, and expensive.
4. Less Than 2% – The budget percentage that most construction managers spend on IT
The construction work site of 2017 is a lot different from what you’d see 15 years ago, or even five years ago. All industries have become more reliant on networks and technology, and information technology (IT) is the necessary support structure behind those systems. So why do more than half of construction managers spend 2% or less of their revenue on IT? And why do only 42% of construction managers have a dedicated IT staff they can depend on?
Most likely, it’s because the construction industry is a bit old fashioned and resistant to change. Many construction managers haven’t adapted to a new climate where there are all sorts of technological tools at their disposal to make their lives easier.
The statistic is a reassuring sign that even if you’re not the most technologically inclined construction manager, you are far from alone in the world of construction if you barely have an IT budget.
5. 72 – The number of construction software options added to Capterra’s directory in the last year
Construction management software is certainly a form of technology, so it’s no surprise that just like with all the other technologies out there, it’s growing exponentially. Each passing year brings new software options that are available to construction managers seeking to better run their businesses.
Between February 2016 and February 2017, Capterra’s construction management software directory added another 72 construction software options, and if anything that number is likely to increase this coming year.
What does that mean for you? Perhaps it’s wise to set aside some time to poke around and see what software is out there. You never know what cool new stuff has hit the market in just the last few months.
More construction statistics for 2017?
Have any other construction industry statistics that blew you away when you first heard them? Please, share them below. We’d love to hear your take.
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