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Looking back at 2022: A year in the making



The construction industry has flourished in 2022, but the year has also brought its challenges. Issues related to environmental impact, labor shortages, material costs, covid and safety are all important issues for contractors. Let’s take a look back at the developments that have shaped the construction industry in 2022.

The construction industry is grappling with its environmental impact

Construction is a major source of carbon dioxide emissions, which has led to a demand for increased sustainability.

In New York City, Local Law 97 was passed in 2019 as part of the New York City Green New Deal. The law requires most buildings over 25,000 square meters to meet new limits on energy efficiency and greenhouse gas emissions. Although the requirements don’t go into effect until 2024, the city says building owners are already starting to focus on compliance — with the threat of hefty fines motivating them to take this issue seriously.

Other requirements will also come into effect soon. New York City Local Law 154 will phase out fossil fuels, requiring new buildings to be all-electric by 2024, according to Urban Green. The New York State Senate says the All-Electric Building Act would impose similar requirements for the state as a whole.

At the federal level, the Executive Order on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability (issued in late 2021) established a net zero emissions building goal for 2045. Additionally, the US General Services Administration (GSA) issued new carbon standards on March 30, 2022, according to the Facilities Standards for the Public Buildings Service. These new standards require the use of low-carbon concrete products and asphalt pavement.

Labor and material costs and shortages continue

Inflation, supply chain issues and a shortage of skilled labor continue to pressure the construction industry.

According to CoreLogic, construction materials costs in the US increased by an average of 13.6% and wages by 0.6% in the second quarter of 2022. In some cases, problems securing materials may have led to project delays. For example, the Wichita Business Journal says supply chain issues delayed the opening of WSU Tech’s new culinary school, while Out There Colorado says several major commercial construction projects in Colorado Springs have been delayed by skyrocketing material and labor costs and rising interest rates.

Labor shortages – particularly skilled labor shortages – have been a major issue for the construction industry. The Associated Builders and Contractors says the construction industry would need to attract close to 650,000 workers above the normal hiring rate to keep up with labor demand. Turner Construction Company says the lack of skilled labor allows contractors to be more selective in the projects they pursue.

Covid is no longer a reason for delays

According to data from nPlan, large-scale construction delays increased by more than 100% due to the pandemic.

COVID Still Spreading – ABC News recently reported that Los Angeles County may roll back its mask mandate in response to rising cases. However, Construction Dive says owners are pushing back against COVID-19 force majeure clauses citing the virus as an excusable delay. As one lawyer pointed out, a force majeure event must be unpredictable – and at this point in the pandemic, covid is a predictable factor.

Preparing for a global recession

CNN warns that experts expect a global recession by 2023. In fact, research firm Ned Davis says there is a 98% chance we will see a global recession.

This begs the question: what would a recession mean for the construction industry?

Anirban Basu, chief economist for Associated Builders and Contractors, says a recession could reverse the trend of demand outstripping capacity, forcing contractors to compete more aggressively. But a recession can also increase retention. Companies worried about the effects of a recession should conserve their cash and focus on financial relationships with banks and insurance companies.

Fall safety is still an issue

In November, a construction worker in New York died after falling from 15Th floor scaffolding, according to Construction Dive. The New York City Department of Buildings is currently investigating the site. At the time of reporting, it was not clear whether the worker was wearing fall protection equipment. This can be critical because New York’s Scaffold Law holds contractors and owners 100% responsible for falls that occur when construction workers are not wearing proper safety equipment. OSHA says falls are responsible for one in three construction worker deaths.

Protect your business against today’s risks

During 2022, many existing risks in the construction industry developed and new risks emerged. You need a strong insurance program to protect your business. BNC provides tailor-made construction insurance packages to meet your needs. Read more.




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