Renovation of existing infrastructure to comprise large portion of commercial construction market

The changing face of the workforce as well as the changing nature of work itself were highlighted at this year's MCAA 2004 convention, Feb. 28-March 4, in Orlando.

More than 2,400 people attended the show, which included other educational seminars, plus keynote speeches by former New York City mayor Rudy Giuliani and former senator and presidential candidate Bob Dole.

“It's important to realize that the future isn't fixed,” said consultant Atul Dighe. “The purpose of understanding these trends is to do what you need to do now in order to reach the outcome you want in the future.”

The Mechanical Contracting Education and Research Foundation commissioned Dighe to conduct the study, “Five Key Trends for the Future of the Mechanical Contracting Industry.”

“As mechanical contractors, we literally touch everything that goes into construction and renovation,” added Robert W. FitzGerald, chairman/CEO of FitzGerald Contractors, Shreveport, La., and president of the MCERF. “Understanding these trends is the best way we can make sure we continue to add value to the work we do, now and some 15 years in the future.”

Dighe, a principal senior futurist with the consulting firm Social Technologies LLC., Arlington, Va., conducted roundtable discussions with mechanical contractors and related manufacturers, as well as gathered other information from similar studies of the construction industry to make his pronouncements. He is also working on the future of distribution within the mechanical construction industry, and should have that work done later this summer.

The report identifies five key trends that will affect mechanical contractors between now and 2020.

Two of the trends are occurring within the industry and should be considered challenges to face:

  • Recruiting, Retaining And Training Workers: A growing Hispanic population and the changing nature for future workers, even those currently in kindergarten, are a couple of issues that will provide answers to who will join the ranks.

    According to the 2000 Census, Hispanics are the largest minority in the United States. What's more, by 2010, Hispanics will be the single largest population group in the prospective labor pool for the construction industry.

    Meanwhile, children born between 1980 and 2000, known as the Wired Generation, will grow up taking high tech for granted.

    Dighe recommends that the MCAA and UA work together to focus on minority recruitment. In addition, the MCAA is already well underway with creating a presence for the industry at the collegiate level with its 20 student chapters throughout the country. More than 120 students attended this year's convention.

    “I know everyone thinks that college graduates all want to go into every industry except construction,” Dighe. “But I think this industry is more high-tech, more entrepreneurial and, at the same time, more team-oriented than we give it credit as being. These are the types of values that will attract the Wired Generation.”

  • Continuing To Add Value: Overlapping roles and skill sets among the various trades found on a jobsite will be more prevalent in the future, Dighe said.

    “The distinctions among electrical, mechanical and sheet metal contractors will be tough to make in the future,” he added.

    What's more, reverse auctions and direct purchases of equipment by end-users will eat away at reliable profit centers.

    Dighe sees a bit of the recent past providing a roadmap to a profitable future, at least for design-build contractors.

    “These contractors have taken on many job roles previously performed by the general contractor,” Dighe explained.

    Thanks to the increasing complexity of building methods and a growing demand to “get it done yesterday,” Dighe thinks the role (as well as the revenue) of the general contractor could be assumed by a set of specialty contractors working as “virtual GCs.”

    “An individual's, as well as a company's, coordination and cooperation skills will be highly valued by the marketplace and will serve as a key competitive advantage for mechanical contractors,” he added.

    The other three trends Dighe identified are occurring outside the industry and should be considered opportunities to capitalize on:

  • Rebuilding Aging Infrastructure: Look for more brownfield than greenfield construction, Dighe said. Over the next 10 years, the demand for renovation and updating 1960s-era public buildings and infrastructure will comprise a large portion of the commercial construction market.

    Much of this building stock is reaching the final years of its life span. Also, long-neglected public works projects, such as municipal water and wastewater treatment facilities, also will need to be improved.

    Finally, the economy is on the verge of a huge transfer of wealth that will further develop the real estate market. The parents of Baby Boomers will pass on $2 trillion in assets, much of it in the form of property. How the Boomers choose to reinvest this amount will drive the direction of the nation's economy over the next 20 years.

  • Understanding Sensor Technology: Could the nature of the industry change to the “mechanical and communications coordinating contractors” industry? Maybe. With sensor technology more powerful, portable, disposable and pervasive every day, sensor technology may radically change the nature of a simple service call.

    “There will be increasingly fewer unforeseen system problems,” Dighe said, “since sensor technology will be able to diagnose its own problems, warn of failures well in advance and, in some cases, even fix what ails the equipment.”

    As a result, by 2015, the majority of mechanical systems servicing work will be scheduled preventative maintenance.

    “In a world filled with sensors gathering billions, if not trillions, of bits of data on a daily basis,” Dighe added, “coordination and communications skills become crucial.”

    That will make the ability to determine which piece of information gets communicated to which system a highly sought after skill.

  • Using New Material Technology: Clearly this was the part of the seminar that sounded the most like science fiction. Suffice to say that if you're still wondering about CPVC, you ain't seen nothing yet. Breakthroughs in materials sciences will create entirely new classes of lighter, stronger construction materials.

    The phrase “all construction is local,” could also take on a whole new meaning, Dighe said. “Many materials needed for a given job could be manufactured on site, on an as-needed basis.”

    In addition to “smart” materials, Dighe said “nanorobots” could create self-healing materials and systems. As a result, a service contractor's “technician” could be a microscopic, versatile robot that can continually monitor and repair systems and materials. (Nanotechnology refers to the ability to manipulate individual atoms to create new materials.)

    Next year's convention will take place Feb. 27-March 3 in Scottsdale, Ariz.