This growth isn’t concentrated on traditional commercial projects. Data centers, healthcare megaprojects and power infrastructure demand tighter deadlines and more labor at a moment when labor is already scarce. According to data from the Associated General Contractors (AGC), 82% of firms report they cannot find enough hourly craft workers and 80% cannot fill salaried roles. Associated Builders and Contractors projects the industry needs 349,000 net new workers in 2026 alone.

That combination, more complicated work with fewer people to do it, is making AI an operational necessity to meet demand. However the technology is still so new that a proven implementation playbook has yet to emerge—adding a layer of difficulty to an already challenging process.

Fortunately, best practices are starting to surface.

Here’s a preview of some tactics construction leaders can use to lay the groundwork for a smoother rollout and stronger returns, based on observations of over one hundred AI implementations across the construction supply chain.

Start With What You Know

Before evaluating a single vendor, leadership needs a clear picture of how much time is spent on manual tasks. Teams stretched thin on delivery rarely have the bandwidth to step back and diagnose their own bottlenecks, which means the most visible problem might be addressed before the most costly one.

The fix doesn’t require an elaborate audit. Simple, consistent reporting—hours spent per task, neglected work that’s piling up, recurring errors that cost time to fix—on any objective metrics can turn a gut feeling into a business case. That said, qualitative feedback is also important, especially from less vocal members of the team. The employees who are the least likely to speak up about a problem are also the most likely to suffer a new issue in silence. 

Prepare Your Systems and Permissions

Even the best AI tool will underperform if it can’t integrate with the systems already in place. Contractors preparing for implementation need to loop in IT leaders early to sort out permissions, API access and technical integrations, since a plug-and-play connector and a custom-built one require different timelines and internal resources.

Skipping this step is one of the most common reasons rollouts stretch from weeks into months. A little technical due diligence up front, including optional steps like cleaning up duplicate vendor records, can be the difference between a smooth launch and a stalled one.

Adoption Goes Beyond the Announcement

Enabling field crews and back-office staff to adopt new technology takes a deliberate approach: Start with credible early adopters then let the results speak for themselves and amplify their success. When organic adoption plateaus, leadership can give it a boost by incorporating usage metrics into weekly meetings and by asking holdouts directly what’s holding them back. Framing resistance as an opportunity for feedback, rather than a reprimand, tends to surface very fixable barriers to adoption.

Not All AI Vendors Are Built the Same

With so many early-stage vendors overselling new technology, a thorough evaluation is critical. A vendor that won’t run a live demo on your own data, has a shallow engineering bench or can’t produce independent security validation is signaling that their solution will come up short in practice.

Going beyond standard software due diligence, into the technical and operational details vendors rarely volunteer, is what separates a solid demo from a solution that will deliver.

Where Contractors Are Already Seeing Results

Accounts payable has emerged as one of the clearest early wins for automation. According to the Dodge Construction Network, contractors who’ve adopted AI for managing payables and receivables report a 100% satisfaction rate with their results. Executives across the 2026 ENR Top 400 Contractors are echoing that momentum, describing a deliberate, phased move toward enterprise-level AI deployment starting with foundational tools.

Getting good results with any new technology depends on the same fundamentals: an honest read of your organization’s needs, systems ready for integration, a long-term change management plan and a vendor that’s earned your trust.

For a free and an in-depth look at the tactics construction leaders are using for smoother AI rollouts, read the complete “How to Audit Your Organization for an AI Implementation” guide linked below.

The post What Every Construction Leader Should Know Before Investing in AI first appeared on Construction Executive.

Despite the common scenario outlined above, labor shortages and material pressures get most of the attention, and not without reason: the RICS-AACE Q1 2025 USA Construction Monitor found that skill shortages, general labor shortages and rising material costs were among the leading factors inhibiting construction activity. This is complemented by McKinsey research showing that large projects already tend to run about 20% longer than planned. The real issue is not that contractors lack machines, but that a machine counted as ‘available’ cannot always work.

True availability is a matter of defined readiness criteria, not physical presence, and closing that gap is where the quickest gains appear. 

‘Available’ doesn’t mean usable

Many field teams judge a machine ready by where it sits or by a single status line in a log, a shortcut that skips the details that determine whether it can perform. Maintenance currency, attachments, operator certification and site-specific setup all sit beneath the word ‘available’, and anyone can stop work cold.

Consider a dozer marked available for grading. On paper, it is ready, but in practice, it still needs greasing, a fluid check and a safety inspection before it can work. A loader can sit idle because no one has confirmed its hydraulic function or whether its attachment is suited to the soil. In each case, the asset was present, but it wasn’t ready to go.

This is where status and scheduling collide, because a status that means ‘present’ rather than ‘ready’ quietly brings a planner’s start time into the realm of guesswork.

Equipment moving across sites creates visibility gaps

Machines rarely stay put in a multi-site operation, and every move risks losing track of one. A transfer logged late, or not at all, creates phantom availability, so the same excavator can read as available at two sites at once, with the conflict surfacing only after both crews have planned around it.

The fallout then lands on handoffs. A compactor stuck at Site A past its return date leaves a Site B crew waiting on a machine that the system still shows as on the way. The log said one thing, the yard said another, and the schedule suffered as a result.

Ultimately, cross-site visibility is less about technology than trust: the confidence that every asset’s location and status can be relied on at a glance. Without it, managers can’t properly plan.

Informal handoffs reduce accountability

Equipment changes hands far more often than the paperwork suggests, passing between crews, back from a subcontractor to the general contractor, or site to site, often over little more than a call or email that records nothing about its condition.

That informality is where accountability erodes. Without a signed condition report, the receiving team inherits whatever the last team left behind. For example, a telehandler can turn up with low fuel, unreported wear and a missing fire extinguisher. The crew loses a morning sorting it out, and with nothing documented, no one owns the problem.

The same gap also raises change-order risk, since an undocumented condition can lead to disputes over damage, with downtime and arguments built on little evidence. A formal sign-off at each transfer keeps responsibility for the asset attached as it moves.

Maintenance disrupts schedules when it is not planned

Reactive maintenance is among the most disruptive forms of downtime, precisely because it arrives without warning. IoT Analytics estimates that unplanned industrial downtime costs manufacturers $1 trillion globally each year, underscoring how quickly equipment issues can become operational and financial problems. On a jobsite, a machine that should have been ready can become an urgent breakdown at the worst moment.

That cost rarely stays contained to the machine itself. When a skid steer is flagged for service during a critical grading phase, it does not just stop; it stalls the crew assigned to it, because no backup was checked for availability in advance. Pull any machine mid-shift for service, and a chain of crew reallocations ripples across the day.

Planned maintenance changes that dynamic. Tied to real service intervals and honest pre-use checks, it turns those surprises into scheduled events, so an anticipated breakdown becomes a routine task, not a delay.

Defining equipment readiness as a productivity metric

The fix starts with language. Availability remains a judgment call until it is broken down into states that anyone can verify, giving every machine a status that means the same thing to the yard, the planner and the crew. One workable model:

• Inspected: pre-use and safety checks are complete.
• Fueled and configured: topped off and set up with the right attachments for the task.
• Certified: a qualified operator is assigned and current.
• Site-deployed: physically on the correct site and logged there.
• In use: actively working and not open for reassignment.
• Maintenance-due: flagged for service and out of the planning pool until cleared.

These states turn a subjective ‘available’ status into objective checkpoints, so a project manager can filter for genuinely deployable machines rather than guessing from an inventory list. Readiness becomes measurable, and what is measurable can be managed.

Improving cross-site visibility and formalizing handoffs

Putting readiness to work requires only a few process controls, most of which cost little. A centralized view of real-time status lets every site work from the same picture; mandatory transfer records, signed at both ends, help to keep accountability attached to each move; and pre-shift readiness audits catch the greasing, the fuel and the missing attachment before a crew stands idle.

None of these demands a large technology purchase; many teams begin with a shared spreadsheet or a mobile checklist and tighten from there. The discipline matters more than the platform: process first, tools second.

There are limits worth respecting. Overly rigid states can slow a small crew that does not need six checkpoints for three machines, so the sensible approach scales to equipment value and project phase, with tighter controls on high-value assets and critical-path work.

Turning readiness into a schedule advantage

Schedule slippage on this scale is widespread. A KPMG survey found that more than a third of firms missed budget or schedule targets by at least 20%. Much of that is treated as unavoidable, yet a real share traces back to equipment that looked ready on paper but was not.

Construction productivity depends on more than access to equipment. It is contingent on whether that equipment is ready when and where the plan needs it. A machine that is present but unusable causes avoidable delays, hidden in inventory lists that look complete.

Defining readiness states, making the status visible across sites and formalizing handoffs turn equipment from a quiet schedule risk into a schedule accelerator. Better still, these controls are mostly process rather than procurement, so most teams can begin within a week. The contractors who treat readiness as a measurable productivity driver, rather than an afterthought, are the ones who stop losing days.

The post Why Equipment Availability Is the Hidden Cause of Project Delays first appeared on Construction Executive.

That matters in today’s market because many commercial clients want to open quickly, control spending and make every square foot work harder. The National Restaurant Association says U.S. restaurant industry sales are projected to reach $1.55 trillion in 2026. The National Retail Federation said core retail sales reached a record $5.28 trillion in 2024. IBISWorld estimates the U.S. gym, health and fitness club market at $47 billion in 2026. At the same time, NFIB reported in early 2026 that only 15% of small business owners said it was a good time to expand, underscoring how cautious many operators still are.

For contractors, that creates a clear challenge. Small commercial clients are still investing, but they want fewer surprises, faster approvals and stronger evidence that the proposed layout will support daily operations from the day the doors open.

What Commercial Clients Need to See Before Signing Off

Before a client approves a layout, the central question is rarely whether the space looks good on paper. The real question is whether it will work in live operation.

First, clients need to understand customer and employee flow. In a café, that means the path from entry to ordering, pickup and seating. In retail, it means how shoppers enter, browse, queue and pay. In a pharmacy or clinic, it means separating waiting, consultation, storage and staff circulation in a way that feels controlled and clear. In a fitness space, it means showing how members move between reception, lockers, equipment zones and recovery areas without congestion.

Second, clients need confidence that the design respects real constraints. Accessibility, life safety, privacy, sanitation and egress are not abstract review items. They shape whether the space can open on time and whether the operator can run it efficiently once it does.

Third, the plan has to support business performance. Many small commercial operators think less in design language than in seat count, transaction capacity, privacy, storage density, staff efficiency and throughput. If a presentation does not connect the layout to those outcomes, it often feels incomplete.

Finally, the presentation has to make functional zones obvious. Clients should be able to identify what is public, what is staff-only, what is regulated and where the likely bottlenecks may appear. A basic line drawing can define walls, but it does not always explain how the business will actually function.

Where Presentations Often Fall Short

One common mistake is focusing on the shell of the project while underexplaining the user experience. Contractors may describe dimensions, partitions and finishes accurately, but still leave the client unsure about what customers and staff will experience in the space. That uncertainty tends to slow approval.

Another mistake is presenting a static footprint without presenting the business process the footprint must support. A restaurant owner is thinking about ticket flow, staff movement and table turnover. A pharmacy operator is thinking about privacy, waiting conditions and secure storage. A gym operator is thinking about equipment spacing, visibility and circulation. When that operational logic is not visible in the presentation, the client has to imagine too much on their own.

A third weak point is failing to show a normal day in the life of the space. A technically correct floor plan may still fall short if the client cannot picture a lunch rush, a checkout queue, a restock path or a locker-room transition. Approval slows when the operator must mentally simulate the entire business from a drawing that does not make movement obvious.

The last recurring issue is underplaying sector-specific equipment and installations. In food service, that may include prep clearances, exhaust needs, refrigeration adjacency and dish return flow. In health care-adjacent environments, it may involve privacy, controlled storage and hygienic separation. In fitness, it includes spacing, mirrors, showers, lockers and staff oversight. In retail, it includes sightlines, display depth, stockroom access and point-of-sale positioning. The smaller the space, the more damage these omissions can do.

How Sector Needs to Change

Restaurants And Cafes

In food service, the layout has to explain the relationship between front-of-house and back-of-house in operational terms, not just architectural ones. Clients need to see where the queue forms, how pickup works, how servers pass one another and whether the kitchen can support the proposed seating plan. With restaurant sales projected at $1.55 trillion in 2026, operators remain focused on labor efficiency, speed of service and revenue per seat. When a presentation does not clearly show adjacencies, prep flow, service routes and customer movement, owners often hesitate for good reason.

Pharmacies, Clinics And Wellness Spaces

Healthcare-adjacent commercial spaces need to communicate calm and control while still showing compliance-minded zoning. Waiting, consultation, pickup, staff circulation and storage must be easy to read. Privacy is not optional. Neither is queue management. Contractors do not need to overload the plan, but they do need to annotate it in business terms so the client can quickly see where confidential conversations happen, where secure products are stored and how staff move without crossing patient-facing areas unnecessarily.

Retail

Retail layouts live or die on customer journey. Entry sightlines, decompression space, merchandising sequence, impulse zones, checkout location and back-of-house access all affect sales performance. The broader retail sector remains enormous, with NRF reporting record core retail sales of $5.28 trillion for 2024. That helps explain why even smaller retailers care deeply about presentation quality. They are not approving abstract square footage. They are approving a selling environment.

Fitness

Fitness spaces are easy to underestimate because they can appear simple on paper. In reality, they require disciplined circulation and careful zoning. Equipment layouts must support movement and clearance, not just placement. Locker rooms, showers, reception, stretching zones and staff oversight need to function as one system. IBISWorld estimates the U.S. gym, health and fitness club market at $47 billion in 2026, which helps explain why operators want more than a furniture layout. They want confidence that the member experience will feel smooth, safe and commercially credible.

How to Make Functionality Obvious

The most effective presentations show the space as a working environment, not just a bounded area.

A strong package often starts with clear visualization. Not because visualization is fashionable, but because it helps clients understand flow, scale, furniture placement and pinch points faster. The goal is not to impress with graphics alone. The goal is to reduce interpretive effort and accelerate sound decisions.

Plans should also include annotations that clarify operational and regulatory zones. Accessible routes, staff-only areas, counters, storage rooms, waiting zones, wash areas and equipment clearances should be labeled in plain business language. Contractors often assume these elements are obvious once drawn. In practice, they become much easier for clients and third parties to understand when explicitly identified.

Realistic views also matter. A client should be able to look at a perspective and immediately understand how an entry feels, how a service line reads or whether a waiting area looks exposed. These images help reduce second-guessing because they turn a technical document into something the operator can evaluate from a business standpoint.

Finally, the presentation should be backed by documentation that is easy to circulate. That means scaled plans, clear notes, site context and any elevations or sections needed to support review. The package should be understandable to landlords, consultants, vendors, reviewers and internal decision-makers without requiring a separate meeting just to decode the drawings.

Why the Right Tooling Matters

This is where a design software becomes more than a drafting aid. It becomes a communication tool.

Contractors need outputs that build confidence quickly. On its commercial design page, Cedreo says users can add plan notes and key furniture symbols so owners, contractors and vendors can understand how the space works, then export floor plans to scale in JPG or DXF.

Cedreo also says it can produce photorealistic renderings, branded presentation documents and site-planning context, including boundaries, setbacks and grading. For contractors trying to move from concept to presentation without stitching together disconnected outputs, that is a relevant value proposition. Gail, contractor, uses this commercial design software to present his designs: “This software is easy to use and offers me the ability to let customers see their finished product before it is built. Many customers have a hard time visualizing typical construction plans. The 3D view lets our customers get a true feeling of the finished product they will be getting.”

The return is easiest to justify in process terms. Better presentation does not guarantee a fixed increase in conversion or revenue, and no responsible contractor should frame it that way. What it can do is reduce back-and-forth, limit misunderstandings, shorten review cycles and improve the odds that unresolved questions are addressed before they become field problems.

What This Means for Contractors

Planning small commercial spaces well means presenting them as businesses in motion, not as empty rectangles with dimensions. Clients need to see flow, compliance, profitability and functional zoning before they are comfortable signing off. They also need to see that the contractor understands the operational realities of their sector, whether that means restaurant service, pharmacy privacy, retail conversion or fitness circulation.

The broader market supports that conclusion. Restaurants, retailers and fitness operators continue to represent large, active parts of the U.S. economy, but many of the small-business clients behind these projects remain careful about timing, spending and risk. NFIB’s early-2026 readings reflect that caution. In that environment, better planning is not just a design upgrade. It is a sales, coordination and risk-reduction strategy. Contractors who present small commercial projects with that level of clarity are more likely to shorten approvals, reduce avoidable revisions and build confidence before the job reaches the field.

The post Planning Small Commercial Spaces for Faster Approvals and Fewer Revisions first appeared on Construction Executive.

Portfolio-level budgeting offers a critical tool for risk prevention. It shifts the focus from individual project performance to the health and value of the entire capital program.

With portfolio-level budgeting in place, asset owners and construction executives gain a consolidated view across all project work. This shared visibility allows both groups to see how every project fits into the bigger picture and align investment decisions with strategic priorities and long-term objectives.

The unified framework of a portfolio-wide approach enables organizations to better evaluate trade-offs, allocate resources strategically and anticipate budget overruns early—driving more predictable performance and stronger ROI across the organization.

Complete Portfolio Analytics Strengthen Capital Planning and Execution

Portfolio-level insights help ensure that every project contributes to smoother operations and stronger returns—and portfolio analytics is the significant differentiator in delivering those insights.

Capital planning decisions rely on real-time visibility into budget performance across the organization, comparing planned versus actual spend across projects and regions.

Portfolio analytics consolidates and organizes every project detail—from project scopes to labor amounts—into quantifiable, data-driven insights across all active and planned projects in the portfolio. This high-level visibility helps identify what performance trends are emerging, where investments may need to be rebalanced and how scenario or what-if planning could strengthen future outcomes.

One of the most effective tools within portfolio analytics is earned value management, which offers real-time insight into schedule efficiency, costs and scope across connected projects. Using EVM at the portfolio level, indicators like schedule performance index and cost performance index can highlight what areas are cause for concern, what teams may be underperforming or what unexpected irregularities are cropping up. Because these metrics are sensitive to fluctuations in both timelines and budgets, they serve as an early warning, drawing attention to what teams should focus on and preventing small variances from turning into major budget overruns.

When the right people have the right information at the right time, better decisions can be made about those kinds of issues to keep the project—and entire capital program—moving forward. But when project and portfolio budgets exist in disconnected systems or manual spreadsheets, it’s difficult to pinpoint responsibility for overruns or understand how local decisions affect enterprise-wide performance.

Timely, easily understood data that helps optimize decision making is vital to profitability across the entire capital projects portfolio, not just day-to-day jobsite progress. With integrated construction budgeting, accountability comes naturally. Teams collaborate more effectively and forecast with confidence, and organizations maintain control over every dollar—ensuring that budgets aren’t just managed but also leveraged for improved ROI opportunities and long-term success.

Portfolio-Level Cost Control Protects ROI

Even with solid budgets and real-time analytics, the ultimate test of capital planning success is cost control. Cost management at the portfolio level, supported by portfolio analytics, allows organizations to track financial performance across every project and evaluate risk through the lens of the entire capital program—ensuring funds are allocated to the right priorities at the right time.

When cost control is handled only at the project level, teams may succeed individually while the overall portfolio still suffers from inefficiencies or overspending.

A portfolio-wide approach brings every cost into focus, revealing where budgets are drifting, where cash flow can be optimized and where resources should be rebalanced to protect ROI.

This approach goes beyond identifying inefficiencies. Portfolio-level budgeting also helps organizations understand where to focus their efforts and how to capitalize on and replicate successful projects. Budgeting at this level protects long-term returns by reducing waste across the entire portfolio.

Modern cost-management tools support this visibility by connecting budget, forecast and actual data in a single environment. With this integration, leaders can monitor performance in real time, compare trends across regions or project types and make adjustments to maintain financial health.

Using data analytics to monitor EVM metrics like the SPI and CPI not only helps to analyze current project performance, but also dig deeper into the data to see where the organization should be focusing its efforts to maximize ROI. Shifts in SPI or CPI can better inform decision-making. For example, if one project is ahead of schedule and under budget, leaders might reallocate funds or labor from that stable project to one trending behind. Or if a high-risk project shows early signs of slipping, project leaders can proactively intervene to avoid cost or schedule overruns.

Maintaining a continuous, connected view of portfolio costs provides clear answers to critical questions:

• How can capital be reallocated more effectively?
• What is overall budget performance?
• What lessons from past projects can improve future ROI?

Portfolio-level cost control ensures capital dollars deliver the strongest possible return. By turning cost data into actionable insight, organizations strengthen collaboration and accountability, resulting in more predictable performance and stronger ROI across every capital construction project.

Portfolio-level budgeting isn’t just focused on better reporting or visibility. It also empowers every decision maker with the insight and confidence to guide projects toward stronger financial outcomes and long-term capital success.

The post Portfolio-Level Budgeting Strategies Reduce Risk and Improve ROI first appeared on Construction Executive.

The attempt here is to describe the trends that have and will have tangible impact today and not the glamorous smoke-and-mirror promises.

Trends of BIM That Will Be Particularly Relevant in 2024

• Efficient pre-construction coordination in trades to prevent re-work and change orders Of course, the good old coordination among trades during the pre-construction phase may not be the most glamorous, but it is still the clear, low-hanging fruit with significant ROI. Through the collaboration between different trades enabled by the BIM coordination process, construction teams can avoid the need for re-work or change orders, which leads to substantial cost savings. This proactive approach ensures that all aspects of the project are thoroughly examined and optimized before construction begins, resulting in a smoother, more efficient install process and the delivery of higher-quality buildings.
• The process of off-site assembling can be made easier through the facilitation of prefabrication The utilization of BIM is critical in enabling prefabrication, particularly in light of escalating labor expenses. Although it may demand a greater degree of expertise in the modeling crew because you need true LOD 400 models, BIM provides the groundwork for constructing off-site. At ENG, we strongly believe that prefabrication is the clear number one when it comes to the ROI of BIM uses.
• RTS: Improving accuracy and reducing labor expenses through layout efficiency The integration of robotic total stations with BIM can significantly improve layout efficiency. Incorporating RTS points into the model enables construction teams to reduce labor costs, save time and achieve superior precision. This streamlined process ensures that project timelines are met with minimum errors, thereby enhancing overall project quality.
• Robots: Layout, prefabrication, scanning Robots are “invading” the construction industry—and across multiple domains, including layout, prefabrication and scanning, among others. In layout, these robots equipped with advanced sensors and precision tools are replacing traditional methods of marking and measuring, ensuring unparalleled accuracy and efficiency in setting up architectural, structural and MEP components. In prefabrication, robots are employed to manufacture building components off-site, the same as in other industries, offering a controlled environment for production and reducing onsite construction time. Additionally, scanning robots, including “dogs” with mounted LiDAR technology and drones, enable 24/7 as-constructed or as-built reality capturing, accessing hazardous environments as needed without compromising worker’s safety.
• Laser Scanning: High precision and design efficiency when capturing existing conditions While still having significant room for adoption, laser scanning has reached a stage of maturity in terms of proven ROI. Whether it’s static, mobile or drones, this technology provides the tangible advantage of being able to capture existing conditions much more quickly and accurately. The integration of virtual modeling with laser-scanning hardware allows construction teams to replicate a space and its elements accurately before getting in. This precision allows for design, pre-coordination and prefabrication without the need for onsite double-checking.
• Significant cost savings for owners, through efficient handover and facilities management Project-lifecycle BIM has had slow adoption among owners, but in those cases where implemented, results have proven to be material. Implementing BIM, with a focus on well-structured information during the design and construction phases, can offer substantial benefits to facilities management and a smoother handover process. To maximize these benefits, a strong BIM management strategy should be put in place to ensure well-organized data. This approach provides operators with comprehensive asset information from the beginning of operations, leading to significant cost savings.
• Generative Design: Embracing a new superpower On the design side, generative design is a game changer. It has had more progress in the architectural design early stages than in other disciplines. This was specifically seen this year at AU when Autodesk announced its AI. Architects need to embrace it as an extended “superpower” rather than a replacement. AI will not, at least for now, understand the client’s specific context. The designer will start becoming the curator of the options that generative design proposes. Those who do not understand it that way will be at a huge disadvantage.
• Sustainable Construction: Building a greener future Sustainability has been a buzzword in the construction industry for some time now, but in 2024, it’s taking center stage. This is partly leveraged by AI and generative design enhancing BIM’s ability to simulate and analyze a building’s performance, empowering architects and engineers to make eco-conscious design choices, reducing energy consumption and environmental impact. Through collaborative coordination, BIM minimizes errors, cuts down on waste and supports sustainable practices like prefabrication and modular construction.

I purposely did not mention virtual reality or augmented reality. VR is used more on the design side to communicate design intent with clients, for example, or perhaps for a GC to communicate logistics plans. AR, for example, helps a foreman visualize how installed MEPs will fit within an existing mechanical room. Both provide value, but in my opinion, when compared to the initial points we discussed, VR and AR have significantly less bottom-line impact. To me, as a general rule for construction innovations, technologies that allow humans to “visualize better” will not have nearly the relevance of those automating or replacing human tasks.

Explore ENG’s BIM Services

The post Top Eight Trends of BIM in Construction 2024…With No Puffery first appeared on Construction Executive.

Doing business in the modern world demands that construction companies stay ahead of a shifting marketplace. As we navigate through the remainder of the year, several overarching trends shape the construction industry. Chances are, you’ve already experienced the impact of some of them on your projects. Let’s dive into these key trends reshaping the construction landscape.

The Rising Tide of Costs

Inflation is a term used to describe the general price increase over time. While it eased off from its peak in 2022, inflation remains a significant concern this year. In July, the cost of goods and services was 3.2% higher than the previous year, although this was lower than the anticipated 4.7%. While these percentages may seem small, they have real effects on budgets and costs.

For construction companies, inflation poses unique challenges. A significant issue revolves around the rising costs of materials. When the prices of materials soar, accurately estimating project costs becomes increasingly tough. This can lead to unexpected budget overruns. Furthermore, disruptions in supply chains are causing delays in obtaining essential materials, adding to project complexities.

Inflation’s impact doesn’t stop at materials. It extends to labor costs as well. Workers often seek higher wages to keep up with the rising cost of living. This adds another layer of complexity to managing construction expenses.

Navigating the Unforeseen

While not new, catastrophic risk is becoming more intricate and harder to predict.

Construction professionals must prioritize disaster preparedness. Disasters can make construction sites even more hazardous. Construction companies must have plans to ensure worker safety during emergencies.

Weather-induced delays are a common headache in construction. Roughly 45% of construction projects worldwide experience delays yearly due to bad weather. These delays translate to increased costs and lost revenue.

Moreover, disasters can disrupt supply chains, causing ripple effects. Imagine a hurricane striking a factory that produces vital materials for your construction project. Such incidents, whether nearby or far away, underscore the interconnectedness of our world and its potential to impact the construction industry.

Understanding Legal Complexities

Legal challenges have always been a concern for businesses, but recent litigation trends have heightened these concerns for construction companies.

One particular trend is the rise of nuclear verdicts. These are monumental lawsuit wins where companies must pay more than $10 million in damages. In 2022, more than 15% of these verdicts were related to accidents or issues on construction sites.

The repercussions of nuclear verdicts extend beyond immediate financial strain. When a company faces exorbitant lawsuit payouts, it can jeopardize its financial stability. Additionally, insurance companies might respond by raising rates and becoming more selective about the businesses they insure. This dynamic makes obtaining insurance coverage more challenging and costly for construction companies.

One factor contributing to the surge in massive verdicts is the growth of litigation finance. This involves third parties funding plaintiffs’ lawsuits, amplifying the financial stakes. Policymakers are beginning to address this trend, weighing regulations on litigation funding.

Facing These Trends Together

Each of these trends has the potential to impact your construction business significantly. Yet, you can navigate these challenges effectively with the right partner and strategies.

One way to tackle these challenges is collaborating with specialists such as Marsh McLennan Agency. Our expertise can help you develop a strategic plan tailored to your short- and long-term objectives. We offer a range of options, alternatives and advice to guide you in effectively managing risks.

The construction industry continues to evolve, and understanding these trends is pivotal to success. Inflation’s impact, catastrophic risks and legal complexities influence the construction landscape. By teaming up with professionals and adopting proactive strategies, you can ensure your construction company remains adaptable and resilient in the face of these evolving challenges.

To dive deeper into these topics, download and read the Marsh McLennan Agency Business Insurance Trends Report. To learn more about how we can assist your company, reach out to a Marsh McLennan Agency construction colleague today.

The post What Trends Could Your Construction Business Face for the Rest of 2023? first appeared on Construction Executive.

As our world becomes increasingly focused on environmental, social and governance issues, many businesses are turning to electric vehicles to help reduce their carbon footprint and take a step forward into the more electrified world of tomorrow. In turn, the benefits they receive range from lower operational costs to higher reputational favor among stakeholders and clients. On the construction jobsite, electric heavy machinery can yield even greater levels of benefit through lowered noise pollution, emissions, energy usage and project costs.

Under the Inflation Reduction Act, contractors can now add significant tax savings to this list of benefits. Effective Aug. 16, 2022, through the end of 2032, qualifying new and used commercial vehicles are eligible for clean vehicle tax credits, IRC 45W. If applicable to your situation, it is also worth noting the availability of IRC 30D for EVs purchased in 2022 or prior and IRC 25E for used EVs.

Qualifying business vehicles weighing 14,000 pounds or more can now achieve up to a $40,000 credit under IRC 45W—and up to $7,500 for qualifying vehicles under 14,000 pounds. To be considered a “qualified commercial clean vehicle,” it must be subject to a depreciation allowance, be utilized for business (not resale) and be primarily used in the United States. It must also be made by a qualified manufacturer and not have already been allowed another credit, such as under Section 30D. As with all proper tax planning or tax credit analysis, each taxpayer needs to make the proper analysis with their tax adviser to determine what makes the most tax-efficient sense for them, not only in the current year but for future tax years to come. Sometimes focusing on the current year and not looking forward could end up actually costing you money or, in this case, losing credits you were counting on.

Mobile machinery is among the list of eligible assets under IRC 45W, making this an important tax-saving opportunity for contractors purchasing or leasing electric vehicles. These vehicles must be plug-in with a battery capacity of 15 kilowatt hours—and 7 kilowatt hours for vehicles less than 14,000 pounds.

The amount of the qualified commercial clean vehicle credit is the lesser of the following—up to the $40,000 or $7,500 cap:

• 15% of the taxpayer’s tax basis in the vehicle—30% if the vehicle is not powered by a gasoline or diesel internal combustion engine—or
• the incremental cost of the vehicle

The IRS defines “incremental cost” for this purpose as “the excess of the purchase price of a qualified commercial clean vehicle over the price of a comparable vehicle.” A “comparable vehicle” is defined by the IRS as “a vehicle powered solely by a gasoline or diesel internal combustion engine that is comparable in size and use to the qualified commercial clean vehicle.”

There is no limit on the number of credits your business can claim, but they are nonrefundable. If the credit amount exceeds the amount of tax owed, it cannot be refunded but can be carried forward as a general business credit.

These rules are for business-use vehicles only. For personal-use vehicles, the rules before and after the enactment of the IRA on Aug. 16, 2022, vary by income, cost and manufacturer limitations. With these recent changes, it is important to seek the advice of your tax professional to determine your business and/or personal eligibility, as well as the tax year in which to take the credit if the date of contract and date placed in service fall in different years.

For more information, please contact Ronald Eagar, Partner at Grassi Advisors and Accountants, at reagar@grassicpas.com or (516) 336-2460.

The post Clean Vehicle Credit Drives New Tax Savings for Contractors first appeared on Construction Executive.

Nearly every industry is currently coping with the effects of supply-chain and labor-shortage issues. Though there has been some relief in both areas, costs for business owners remain high and continue to increase due to inflation. For the construction trade, managing increased material and project costs minimizes profits and cuts into funds that might be allocated to replace or upgrade tired vehicles and equipment. As manufacturers’ backlogs begin to shorten, business owners must be strategic in financing these expenses when replacement inventory is finally available.

To curb rising costs, business owners and their fleet managers may have stretched their replacement cycles and increased preventative maintenance costs to keep older equipment, trucks and vans in service for longer than expected. Unfortunately, putting off inevitable upgrades or replacements can only last so long. When short-term repairs are no longer practical, some budgeting factors should be considered with the support of an experienced financing partner.

Lowering Costs With Vehicle and Equipment Leasing

It’s no secret that equipment for the construction industry comes at a hefty cost. Paired with rising interest rates and the increasing price of vehicles, businesses that need both are faced with significant expenses. While cushioning the company’s bottom line is important, within construction, some of these expenses can’t be avoided for too long without the risk of potentially delaying projects or being unable to take on new work.

So, what are the options? Purchasing equipment and vehicles outright generally requires tying up credit lines or utilizing necessary cash. Leasing can offer alternatives that many haven’t considered. Equipment leases can be structured like a traditional loan in which ownership transfers to you at the end of the term, or they can be tailored to provide a structured replacement cycle that minimizes downtime, maintenance and repair costs. Likewise, utilizing a lessor with vehicle fleet-management tools will also create replacement cycles that limit maintenance and repair costs and provide the latest, safest and most economical fleet, and can also improve employee retention.

By leasing, business owners typically spend less on their monthly payments and can have the peace of mind that their vehicles and equipment will stay reliable. The right fleet-management lessor can also provide 24/7 fuel and maintenance support to help control costs and keep the vehicles properly maintained and on the road. For construction companies with specific needs, the right leasing partner can add the cost of vehicle conversion and upfitting into the monthly payment.

Prioritize Financial Partnerships

The best way for owners to ensure they get the right financing option for their construction business is to find a specialized financing partner. Many options are available, so if time allows, business owners should shop around to choose the right partner to meet all of their company’s vehicle and equipment needs. A partner offering customizable lease terms and guidance throughout the leasing process gives business owners the support and flexibility needed to navigate the challenges of acquiring new equipment and vehicles. The right partner will make the leasing process less of a burden and more of an opportunity.

As the persistent effects of supply-chain and labor issues continue to present financial problems for the construction industry, ensuring the viability of machinery and equipment that keeps projects moving should be a top priority. At The Bancorp, the commercial lending team regularly works with business owners nationwide to offer equipment and fleet leasing for nearly every industry. The team works directly with companies to understand the needs of the business and provides lease plans tailored to each company’s unique requirements. With this level of extra support, construction business owners can successfully maneuver through budgeting challenges in an unpredictable market.

VIsit The Bancorp’s website to learn more

The post Facing Financial Challenges With Equipment and Vehicle Fleet Leasing first appeared on Construction Executive.

An arc flash occurs when there is a sudden release of electrical energy between two conductors, causing an explosion. It is a serious hazard in industries such as electrical utilities, construction, oil and gas and manufacturing, where workers are working around high voltage switches and grounding gear, panel boards, switchboards and transformers. Arc flash related injuries can be extremely dangerous and lead to severe burns, eye damage or hearing loss and can even be fatal. This is why it is essential for workers to have head-to-toe protection including hand protection, arc flash- and flame-resistant clothing, safety helmets and face shields.

Arc flash-resistant gloves offer incidental protection in case there is an arc flash. This article will discuss the key materials used in manufacturing arc flash-resistant gloves.

Materials used in arc flash-resistant gloves

The most common material used for protection against arc-flash hazards is leather due to its inherent fire resistance and durability. However, other materials are also used to manufacture arc flash-resistant gloves.

Leather

Leather is inherently fire resistant and a frontrunner to protect against arc flash. Its solid outer shell provides a natural barrier that makes it hard for flames or heat to penetrate.

Wool

Wool is an inherently fire-resistant natural fiber that forms an insulating layer to prevent flames from spreading further. It is not flammable and has a very high ignition temperature, preventing it from easily catching fire. If it does catch fire, the wool will burn slowly, and the fibers self-extinguish. For arc flash gloves, wool is often used as an inner liner in leather and knit gloves for extra protection and comfort.

Besides being inherently fire-resistant, wool is commonly used as an insulating liner that helps keep hands warm while working in cold temperatures.

Cotton

Cotton is a natural fiber that provides heat resistance. However, cotton must be treated with chemicals that resist fire in order to be fire resistant. Like wool, cotton is most commonly used as a liner in leather and knit gloves for extra protection and comfort against arc-flash hazards.

Aramids

Both major aramids—para-aramid and meta-aramid—are synthetic fibers that are inherently fire resistant due to their chemical structure. For arc flash gloves, aramids are often selected because of their superior natural mechanical protection, particularly para-aramids, since they offer protection against other hazards like cut and abrasion. Aramids are also frequently paired with leather to improve its natural flame and heat resistance.

Modacrylic

Modacrylic is a synthetic fiber that is inherently fire resistant. But, unlike aramids, it lacks any type of mechanical protection. This is why modacrylic is often blended with other materials (natural or synthetic) to improve mechanical protection and comfort.

Neoprene

Neoprene is a synthetic rubber traditionally used for manufacturing chemical gloves and also serves as palm coatings for knit gloves. It is primarily used for its natural high fire resistance against arc-flash hazards.

Learn More

To learn more, visit the in-depth guide that expands on the ins-and-outs of arc flash-resistant gloves, including a better understanding of the underlying forces that cause arc flash related injuries, materials not to use when working around arc-flash hazards and safety standards and tests that determine the level of arc-flash protection required to prevent serious injuries. Click here to read more.

Read More About Arc Flash Resistant Hand Protection

The post Understanding the Fundamentals of Arc Flash-Resistant Hand Protection first appeared on Construction Executive.

Every year, millions of workers get injured on the job, and a significant number of reported occupational injuries are hand related. Depending on the severity, not only do these injuries have a huge medical cost associated with them, they are also expensive in terms of lost productivity and wages.

Believe it or not, reducing the incidence of hand injuries in a workplace does not start and end with wearing the right hand protection—though it is one of the necessary tools to prevent such occurrences.

How to build a safe working space for your workers

The hierarchy of controls identifies the safety controls many industries use to protect workers by minimizing or eliminating exposure to hazards. They start from the most effective measures at the top, to the least effective at the bottom. These include elimination, substitution, engineering controls, administrative controls and PPE.

When viewed through the lens of the hierarchy of controls, personal protective equipment is the least effective safety measure.

So, why is this the case? Aren’t gloves, sleeves and other PPE important to protect workers from the risk of hazards? The answer is not a simple “yes” or “no.” This is because safety managers and workers often forget to consider other important control measures in the hierarchy of controls when they rely solely on PPE. And while PPE, like gloves and sleeves, offers protection against cuts, burns, abrasion, chemical, impact, crush, vibration or other hazards, it cannot protect workers from all workplace dangers. This includes risks of prolonged exposures to hazards, injuries due to mishandling equipment, tripping, falling and other risks that can be mitigated or eliminated using control measures. That said, if all other controls fail, PPE may be the very thing that saves a worker from serious injury.

Ultimately, it is important to follow the hierarchy in order, starting from the most effective, rather than choosing the easiest control measure. And while these controls can be implemented in phases over time, multiple levels of hierarchy can be adopted simultaneously, depending on the company’s logistical necessities—and no one step should be completely ignored to realize the true effects of this system.

Learn More

To learn more about the hierarchy of controls in creating safe work practices that reduce the risk of injuries, check out Workplace Safety: Why PPE Is the Last Line of Defense, which discusses each stage in detail, including gaps in all safety controls.

Read More About Why PPE Is the Last Line of Defense

The post Why PPE Is the Last Line of Defense first appeared on Construction Executive.