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.
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
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
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.
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
Transmission infrastructure is becoming a key priority,especially for
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
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.