Worker Shortages - Continued

ABC’s 2022 workforce shortage analysis sends a stark message that the construction industry

desperately needs qualified, skilled craft professionals. The situation is especially problematic

since the passage of the Infrastructure Investment and Jobs Act in November 2021, which will

pump billions in new spending into the nation’s critical infrastructure, further intensifying the

competition for qualified craft professionals.


What has been called the Great Resignation has also rippled across the economy, as older workers

opted for retirement in the shadow of the pandemic, and even younger workers saw opportunities to

strike off in new work-life directions. The construction industry was impacted by this trend as well,

exacerbating an already growing labor shortage.


Consequently, the urgency of the worker shortfalls in construction has resulted in contractors seeing no

alternative but to hire younger workers less qualified than employers would prefer to fill desperately

needed positions. And, in an industry subject to a higher number of workplace accidents and injuries

than other professions, an influx of younger, less experienced workers presents obvious safety issues.


Adding to challenges facing many contractors is the reality of an increasingly multigenerational

workforce, as those younger, less experienced personnel work alongside older workers who remain

on physically demanding jobs longer than they have in the past. The potential for sprains, strains and

other injuries among older workers will continue to drive accident and medical costs borne by builders

trying to cope with a super-competitive workforce marketplace.


Directly taking on the worker shortage, many firms are now reaching out to high schools to recruit

trainees upon graduation into skilled trades that will be sorely needed in the years ahead. Industry

trade associations are also recruiting on behalf of their members, communicating to young people not

focused on attending college that there are lucrative, lifelong opportunities available in skilled

construction trades with the right training and professional commitment.


The frayed supply chain


Skilled construction workers are not the only commodity in short supply. Like so many industries,

construction is beset with supply chain woes affecting materials needed by virtually all phases of

construction, including products historically readily available. Material lead times are growing exceptionally

long, not just for specialty items but for commonplace materials. We hear from many contractors that

insulation, PVC piping and roofing materials are becoming increasingly difficult to find on time and on budget.

One customer in the construction of wastewater treatment facilities told us of 30 to 40-week wait times for

some materials, which can increase costs by requiring a search for materials from other sources.


Much of this is no doubt due to production backups due to the pandemic, complicated by pent-up

demand as projects got back on track as surges in the pandemic have eased. The situation has been

complicated by rises in regional demand for widespread repairs and rebuilds due to an increasing

number of damaging severe weather events. And a shortage of qualified drivers in the trucking industry

has complicated reliable, on-time material deliveries. While we expect today’s supply chain bottlenecks

to ease in time, they will continue to affect project schedules for at least the near term.


To avoid negatively impacting their project schedules contractors must engage considerably earlier

in the procurement process. Ordering materials much earlier, paying premiums for expedited shipping,

and much closer tracking and monitoring of supply chains and distribution are needed since the lead

times of the past can no longer be relied upon.


Technology building the future


Despite today’s challenges, the construction industry remains resilient, dynamic and ready to

integrate innovative technologies and approaches aimed at building better and building more

sustainably. As is the case in all industries, the adoption of new technologies in construction

promises to bring about a sea change in how projects are planned, executed and completed.

Some of the technological solutions at varying degrees of development and onsite application



Digital twin technology


A digital twin is a computer program that employs real-world data in simulations able to reasonably

predict how a product or process will perform under actual conditions. Digital twins can provide data

during the pre-construction and design process to help prevent costly rework and mistakes.

Machine learning and artificial intelligence have enabled these virtual models to become common

in modern engineering, driving innovation and improved performance.


Growth of digital construction


Like digital twin technologies, digital construction processes such as Computer Aided Design (CAD), 

Building Information Modeling (BIM) and Virtual Design and Construction (VDC) will continue to

gain momentum and play even larger roles in construction in the years ahead, thanks to more

powerful technology and software applications.


Expansion of AR and VR technologies


The remote capabilities available to architects and engineers through Augmented Reality (AR)

and Virtual Reality (VR) will continue to revolutionize the industry, helping to dramatically reduce

pre-construction costs in the early stages of a project. Using interactive experiences, construction

professionals will be able to examine designs and coordinate changes without visiting the site.

While widespread adoption will take time, the viability of these technologies is already being

demonstrated in the field.


Use of onsite data and analytics


It has been estimated that poor data accounts for about 48% of rework on construction sites.

As remote operations increase, the use of pre-construction and construction software will

increase as well, providing faster, better access to remote data in time to head off errors.

Project leads will have greater access to data to analyze the build no matter where they are.




The field of robotics is poised to begin assisting construction workers by performing

and augmenting small and repeatable tasks that will take some of the pressure off skilled

trades. Some construction firms experimenting with robotics have already found that these

technologies can multiply human ability and increase productivity.


Blockchain for supply chain management


As the pandemic wanes, production shortfalls and logistical problems have disrupted

trusted supply chains, contractors will need to diversify supply chains in ways that prioritize

trust and customer experience. A study by Deloitte projected that some construction

businesses may begin to utilize blockchain technology for supply chain management,

making recording a material’s price, location, quality and other important information

transparent, traceable, and easier to manage.


Utilization of recycled resources


The ongoing materials shortages could prompt more interest in utilizing readily accessible

recyclable resources. According to the World Resources Institute, 40% of waste in landfills

is generated by construction and building. Instead of sending these materials to landfills,

construction could reclaim and reuse many of them. As supply chain disruptions continue,

a growing number of contractors may commit to the use of recycled materials.


Increased modular construction


Prefabrication and modularization techniques offer several benefits, from manufacturing

components indoors out the elements to the speed at which finished elements can be

assembled onsite. With the advent of more sophisticated and capable 3D printing

equipment, construction components may even be fabricated onsite and immediately

fitted into place. Modularization is not new. It has been accelerating in commercial

construction for 10-15 years. But for a variety of reasons, expect these techniques to reach

new heights in the future.


A new breed of construction workers


Ironically, the explosion of technology solutions will open a host of opportunities for

skilled IT technicians who may have never considered a career in construction.

From performing CAD operations to piloting drones, an influx of IT professionals will

help to remake the industry in the years ahead. The application of innovative

construction technologies will also expand opportunities for disabled veterans and

other workers non-skilled in construction who can play important roles in the

manufacture of prefabricated building elements.


Looking ahead, the synergies of new technologies combined with innovative,

new materials and approaches will reduce costs, increase energy efficiency and help

to build better structures more carbon neutral, sustainable and cost effective.






2022 renewable energy industry outlook


New avenues are opening

The year ahead promises new growth paths for the

renewable energy industry,potentially aided by supportive policies from an

administration focused on combatting climatechange. Yet, some challenges

still linger.


Explore how new technologies, business models, policies, and investments

could help address these challenges and accelerate growth in our 2022

renewable energy industry outlook.


The renewable energy sector is ready to branch out

In 2021, the renewable energy industry remained remarkably resilient.

Rapid technology improvements and decreasing costs of renewable energy


along with the increased competitiveness of battery storage, have made

renewables one of the most competitive energy sources in many areas.

Despite suffering from supply chain constraints, increased shipping costs,

and rising prices for key commodities, capacity installations remained at an

all-time high.

Wind and solar capacity additions of 13.8 GW in the first eight months of 2021

were up 28% over the same period in 2020. Many cities, states, and utilities set

ambitious clean energy goals, increasing renewable portfolio standards and

enacting energy storage procurement mandates.


Renewable energy growth is poised to accelerate in 2022, as concern for climate

change and support for environmental, social, and governance (ESG)

considerations grow and demand for cleaner energy sources from most market

segments accelerates. At the same time, the Biden administration’s vision to

fully decarbonize the US economy is helping spur activity in the renewable sector

that will likely drive further growth—particularly if proposed legislation is enacted.

In our renewable energy industry analysis, the following five trends are expected

to move to the forefront in 2022, opening new avenues in the renewable

energy growth story.



New technologies


Five renewable energy industry trends to watch


Growing interest in next-generation clean energy technologies


Activity is heating up in next-generation technologies. Renewable energy industry

stakeholders are considering investments in them, which can eventually help to

confidently integrate variable renewables such as wind and solar into the electric grid.

For an industry that has largely focused on solar and wind, private investment and

pilot projects combined with federal research support could help expedite

commercialization of emerging technologies such as green hydrogen,

advanced batteries, and other forms of long-duration storage.

These technologies can provide zero-carbon electricity and longer-term

seasonal electricity storage, ease grid congestion, stem renewable curtailment,

boost reliability, and facilitate integration of solar and

wind into the grid while supporting goals for 100% clean energy.


A major driving force behind the rise of green hydrogen has been

the decreasing costs of renewable energy—a critical input in the production process.

In 2022, as renewable energy penetration on the grid increases, green hydrogen

development is also expected to grow, owing to its potential to act

as long-duration and seasonal storage of fuel available on demand to

generate power. States and energy companies are also responding to

this opportunity and ramping up renewable hydrogen production.

Interest is also high in a host of evolving mechanical and

battery storage technologies offering long-duration energy storage

options and supporting the grid.



Solar champions new configurations

After an 85% cost decline over the past decade,

solar photovoltaic (PV) systems are among the most

cost-competitive energy resources in the market.

As it flexes its competitive muscle, the solar industry will likely

boost efforts to explore new configurations and business models.

And 2022 could well see the industry growing solar-plus-storage

buildouts, exploring floating solar PV modules, and expanding

community solar projects to new markets. Pairing storage with

solar offers cost synergies, operational efficiencies, and the

opportunity to reduce storage capital costs with the solar investment tax credit.


A second trend is the expansion of community solar projects to new markets

in the United States. Twenty-two states, plus Washington, DC, have

enabling policies for community solar. With more than half of US households

unable to purchase rooftop solar due to lack of sufficient sun, credit access,

homeownership, or other factors, these programs allow residential customers

to enjoy the benefits of shared solar power. And finally, although a nascent

technology, floating solar photovoltaics (FSPV) are also gaining attention in

the United States, and several developers are exploring these projects either

separately or as hybrids with hydro, which could benefit from a shared substation

and transmission.



Transmission infrastructure is becoming a key priority,especially for

offshore wind

Transmission development, which is key for connecting new, often remotely

located renewable energy capacity to electricity consuming centers, is

expected to be an important part of the renewable energy industry’s agenda

in 2022. Policy and regulatory support, investments, and innovation will likely

help unlock progress, which has often been stymied by siting and permitting delays.

Transmission projects, especially interregional, have so far remained a major challenge

for renewable growth as they face difficulty in gaining regulatory approval from

every state they cross, as well as refusal from landowners, and opposition from

environmental groups.


About 844 GW of proposed capacity—90% of which is renewables or energy

storage—is stuck in transmission interconnection queues. This holds especially

true for offshore wind, which is poised for significant growth and must be

connected to coastal infrastructure. Both enhancing the capacity of existing

lines and building new lines could be key in solving the transmission challenge.

In fact, 76% of the power and utility respondents to a recent Deloitte survey

are either planning or depending on new transmission projects to boost

renewable energy access.



Supply chain strategies continue to evolve


The renewable energy industry is likely to continue to evolve supply chains,

as profits have suffered recently amid logistics-related cost pressures and

US-China trade tensions. In 2021, the solar industry remained under pressure

and prices increased year over year for the first time in seven years due to

supply shortages of components, raw materials, and labor as well as rising

shipping costs. In 2022, US renewable energy developers will likely continue to

seek alternative suppliers, including domestic manufacturers, where available;

reassess supply needs; and develop substitutes to help alleviate these pressures.


In the coming year, many solar installers and developers will likely also ramp up

their compliance monitoring activity, as they try to adhere to the Solar Energy

Industries Association’s Solar Supply Chain Traceability Protocol—a set of guidelines

intended to trace the origin of solar materials, especially to prove their procurement

is free of unethical labor practices. In the wind sector, the United States has

increased domestic turbine component production with more than 500

manufacturing facilities in 40 states. But the industry still depends on offshore

manufacturers for many components. To further boost domestic production,

advanced energy manufacturing tax credits are included in legislation that

Congress is considering.



The circular economy is critical to sustainable growth in

the renewable energy industry

In 2022, end-of-life (EoL) management strategies for renewable energy industry

products and materials are likely to capture attention, as early installations

approach the end of their useful life. This could help reduce waste, increase

resource security, and provide additional financial value as well as sustainability

credentials. As solar, wind, and battery installations are expected to climb to new

highs, waste generation in the renewable energy industry will likely soar as well

and require urgent solutions. By 2030, decommissioned PV modules could total

1 million tons of waste, and there could be 80 metric kilotons of lithium-ion batteries

(LiBs) to recycle in the United States.


Industry stakeholders, regulators, and policymakers have started exploring solutions

for extending the life and increasing the performance, recovery, and reuse of

products and materials. The case for building a circular economy for batteries involves

deeper collaboration among industries and between businesses and policymakers,

given battery demand in a range of applications. A secondary market for repurposed

electric vehicle LiBs includes bulk energy storage system applications. But regulations

for reusing and recycling batteries are in early development, and incentives are

required to attract private investors.

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