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Future Constructions to be Favored by Construction Tech Activity

Accounting Support • Jan 14, 2022
The construction industry has been predicted to grow at a quick pace, partly due to supply chain issues and workforce shortages. We also predict that it will continue to be active in the near future with an expected 10.8% growth per year over the next five years.

The construction industry has been predicted to grow at a quick pace, partly due to supply chain issues and workforce shortages. We also predict that it will continue to be active in the near future with an expected 10.8% growth per year over the next five years.

When there is an increase in construction activity, it usually leads to innovation as project developers and managers seek new opportunities to optimize resources and maximize profits. The sector of technology that deals with construction has been benefiting from this environment, and developments today should have a clear impact on the industry going forward.

CONSTRUCTION TECH TO PERSEVERE INVESTOR INTEREST

Deals in the construction technology industry have been going up, with 127 deals executed as of mid-December 2021. The general M&A activity has been strong for many industries and PE firms and public corporations are being strategic about its deployment to ensure it satisfies shareholders' demands.

Companies will never have to face shortage of opportunities given the amount of activity and buyers in the market. Large companies are always looking for opportunities that amplifies and enhances their reach, and so they offer their clients a flexible range of solutions to counter any issue.

TECHNOLOGY TACKLE TRADITIONAL ISSUES

Investments are flowing into technology, geared towards preserving high-value assets and introducing efficiency into operations. This is great news for the construction industry. Some of the most compelling technologies not only solve a problem in today's world but also have a potential to address support concerns down the road.

Companies that have the ability to track key assets, such as human capital and manufacturing equipment, are also seeing an increase in investments. On the surface, such platforms help companies protect against theft and liability at construction sites among other things. For example: between pandemics and other jobsite risks it can also be used to monitor health care workers or contractors on site for safety reasons. Much of this software is currently niche-focused but will likely grow to impact industries like manufacturing as well as play a role in managing insurance costs down the line due to worker's compensation claims because employers need more information about employees' health before they hire them.

The investors in the construction tech sphere pay attention to exclusive software platforms that can combine data from multiple sources such as general and sub contractors and also provide them with updates. It is quite important for investors to manage costs.

So, to reiterate, for construction technology companies that are focused on estimating software, the most compelling prospects make accommodations for niche and specialty contractors such as electricians, plumbers or roofers. They also build in open APIs to allow communication with broader estimation platforms.

With the progress of new technology in this space, owners and project managers should see improvements to user experience. In addition to building software or a platform, tech companies will be challenged with creating native apps that offer the functionality of a browser or desktop experience. The success and strength of these offerings will depend largely on how easy they are to use for users no matter where they may be working; if it’s not usable from any connected device, then there is an issue with consistency and seamlessness.

AVOIDING INCONVENIENCE, BENEFIT FROM INNOVATION

PitchBook reports that, by mid-December 2021, there were 282 deals in the construction tech space and $3.53 billion had been invested in them. The numbers aren't complete but they are good indications of robust activity within the market. For most construction project owners and managers this activity has flown under their radar because it isn't really disrupting day-to-day activities just yet .

More importantly, new software or platforms require careful consideration. Adopting these will demand time and training. The benefits of current M&A activity and PE investment may not be seen quickly though because it takes time for tried-and-true platforms to introduce new features to address common pain points in managing construction resources only when they are ready.

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