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Construction Industry Trends in 2023

Steve Thompson
January 6, 2023

Understanding the current construction industry trends in 2023 will help contractors prepare for the major economic challenges ahead. Construction projects in the United States are expected to increase slightly. Yet there's still a need to meet the demand for 4.3 million new homes by 2035, as estimated by the National Multifamily Housing Council. Here's a closer look at construction industry trends for the new year.

Overall Economic Construction Industry Trends in 2023

Due to high inflation, the Russia-Ukraine war, volatile oil prices, and other economic challenges that a wide range of industries face, the nation's top economists forecast a recession for 2023. These economic issues further strained supply chains and the construction industry, which have faced difficult labor and cost challenges since even before the pandemic.

Unemployment and interest rates are expected to rise while home prices are pointed downward after hitting record peaks in 2022. Construction of multi-family homes is expected to fall 8 percent in 2023, according to the National Association of Home Builders (NAHB).

Continued Labor Shortages

One of the most widely expected construction industry trends in 2023 involves labor shortages, which ballooned during the pandemic as construction workers rethought their careers. Part of the problem with the construction industry workforce is that many carpenters are near retirement age or have already retired. It will be difficult to replace them with the same skill level as new entrants in the construction industry.

One solution to labor shortages has been to hire more women in construction. Over the past decade, the number of women turning to construction careers has increased by over 50 percent. Construction firms seeking to attract women to improve diversity and fill labor gaps should consider a flexible approach that allows for parental leave. Promoting a work-life balance is key to filling labor gaps these days.

Rising Costs of Building Materials

Prices of building materials are expected to stay high compared with pre-pandemic levels due to supply chain difficulties. But since the Federal Reserve is fighting inflation by hiking interest rates, there are chance prices for critical building materials will go through a cooling phase. Developers of building products are under pressure to reduce waste and utilize recycled materials to help cut production costs. So the industry will continue the development of new construction materials that help builders cut costs.

Expansion of Smart Cities

One of the other construction industry trends in 2023 will be the rise of smart cities. It began with utilities and other large organizations, including local governments. The most advanced smart cities use IoT monitoring devices, AI, automation, and robotics. Real-time data from IoT devices have enormously contributed to improved supply chain decision-making. Smart cities include smart parking meters, smart thermostats, and smart appliances that allow for remote interaction via mobile devices.

Smart technology is heavily based on wireless internet capabilities, in which real-time data can be accessed easily by management personnel of a smart building. Ultimately, greater use of digital technology will help create safer workplaces and homes, as IoT sensors send alerts when they detect danger.

More Virtual Construction Activity

Virtual design and construction (VDC) is a new trend that includes Building Information Modeling (BIM) with the help of construction management software. The virtual construction market is expected to grow in the coming years, allowing for greater planning flexibility among project leaders to communicate online rather than in person. It allows a construction management team, engineers, and architects to visualize structures before they are built.

Since reworks account for nearly 30 percent of construction industry costs, BIM is advantageous because it allows for an easy rethinking of projects without wasting resources. It can help drive a contractor toward a sharper focus on net profits.

More Sustainable Build Processes and Materials

New building methods that encompass sustainable solutions are in high demand these days. Many builders are developing ideas for cutting construction spending and construction time. The use of magnesite decking for exterior flooring is a sustainable solution due to its lightweight material with a high strength-to-weight ratio. This magnesium-based material keeps outdoor walkways resistant to grease, oil, and water.

An Uptick in Modular Construction

Home building kits for modular construction are popular once again, as they were a little over a century ago. An increasing number of residential construction projects call for prefabrication and modular construction. The kits allow a crew to quickly assemble manufactured parts before arriving at work. This trend is contributing to changes in how modern structures are developed. Prefab and modular kits present a convenient, affordable, and efficient option for people seeking simplicity and sustainability.

Wider Adoption of Advanced Digital Supply Chain Technologies

The path to greater market share for many supply chain operators has been to embrace advanced digital technologies such as 3D printing, machine learning, and drones. Each of these technologies can speed up the building process and make it more efficient. This modern approach has led to the growth of third-party logistics (3PL) firms that partner with manufacturers for distribution.

Construction companies can cut costs in various dramatic ways by investing in 3D printers. These versatile machines can manufacture a wide range of construction equipment parts. Instead of putting production machines out of commission until parts are shipped, printing your parts reduces downtime. A 3D printer can print various sections of a small building, such as the foundation, at a much lower cost than traditional construction methods.

Robotics are useful for making a work site environment safer and more productive. Automated machines that handle redundant or dangerous physical tasks allow contractors to use their human workforce for safer and more analytical tasks.

Emphasis on Green Building Principles

One of several quietly emerging construction industry trends is biophilic design, which falls under the broader category of green building. Commercial building owners can promote their businesses as going green by using "living building materials." The biophilic design emphasizes natural building materials. These innovative design concepts include natural light, earthy colors, curves, green plants, and an ambiance that highlights natural beauty.


Digital technology and sustainability remain major themes for the construction industry going into the new year. If you are planning a construction project, it's a good idea to become familiar with the construction industry trends in 2023. If you’re looking for deck waterproofing contractors in the new year, get in touch with the deck waterproofing pros at West Coast Deck Waterproofing today!