INDUSTRY - Labor Costs, Higher Prices, Collaborative Tech

Costs for materials and labor are prime concerns on any construction project, and new data suggests some costs may be rising. With construction activity increasing in many areas, the cost to hire skilled laborers could have an impact on the bottomline.

According to IHS, www.ihs.com, El Segundo, Calif., construction costs in North America rose for the 22nd consecutive month in November. IHS cites labor cost increases as a main driver of higher costs, and the research firm says there is growing concern in the industry regarding the availability of skilled workers.

IHS provides the ECCI (Engineering and Construction Cost Index) to measure construction costs. A number higher than 50 indicates a monthly increase in prices paid, and a reading below 50 shows a price decline. The index registered 53.2% in November, which is up from 52.6% in October. According to IHS, the index shows construction costs in North America have been rising for nearly two years since January 2012.

Some the costs for labor can be traced back to the shale gas boom in the U.S., which is requiring a number of workers for energy-related projects, says IHS. Analysts cite the Gulf Coast region as an area where labor shortages have been reported due to energy projects.

In the past, IHS says materials costs were the major factor in increasing construction expenses, mainly due to building in China that consumed many materials. However, IHS says China’s growth has slowed, and today labor is the prime driver for increased prices.

Right now, construction firms in North American report that a continued increase in labor costs is their main concern. As the U.S. spends more on construction, and many skilled workers age out of the labor force, the industry could continue to see shortages of workers.

Regarding materials, IHS reports that November recorded the seventh consecutive month of falling prices for carbon steel pipe, as well as a fourth month of declining freight rates between Asia and the U.S. Other materials with falling prices included copper-based wire and cable and fabricated structural steel.

As construction companies deal with possible worker shortages, technology platforms can play a pivotal role in helping them do more with less. Management software can allow executives to see where employees are located in relation to jobs, making sure they use their labor force to the best of their ability.

Many solutions are available to meet these needs. Aconex, www.aconex.com, San Bruno, Calif., offers an online collaboration platform that allows documents, communication, and business processes to be managed and shared among employees. By enabling multiple project participants to have access to the same information, companies can make faster decisions and identify where there might be holdups on a project.

To manage a construction workforce, Viewpoint Construction Software, www.viewpointcs.com, Portland, Ore., offers the Viewpoint V6 Software. Designed to provide a tool for project managers to view and manage work to be performed, the software features an interactive Dispatch Board. The board is drag and drop and helps manage resources by providing a quick look at tasks to be completed. Managers can send workers only where they are needed, eliminating unnecessary truck rolls and directing resources to the most vital spots.

Today’s technology solutions allow companies to manage a shortage of workers by putting the labor they do have to the most efficient use.

Source; Constructech magazine