The past two years haven’t been easy on the construction industry.
Lockdown restrictions have paused many projects, material costs have risen and new regulations hinder teams from working at full capacity. Now, as these other challenges start to fade, construction companies must deal with business downsizing.
In the wake of the COVID-19 pandemic, many businesses find themselves facing financial strain. Many companies are downsizing in response. Others are transitioning to a work-from-home model, with only 3% of entrepreneurs and professionals wanting to work from an office full-time.
This downsizing trend means declining demand for large office spaces. This drop in demand could affect the commercial construction industry, but here are a few ways it can respond.
Take Advantage of the Move to Smaller Buildings
In some ways, business downsizing can represent an opportunity for commercial construction firms. As companies downsize, many may look for a new location that fits their new needs. The construction industry can capitalise on this move by focusing on constructing smaller or shared office spaces.
The large office buildings of the past have fallen out of favour, likely for an extended period, if not forever. Construction companies that can recognise and respond to this trend early may see more success. Smaller buildings hosting fewer employees more comfortably will see more demand.
These smaller buildings may not bring in as much revenue per project, but they’re more likely to sell. They also have the advantage of taking less time to complete, leading to faster sales and a quicker post-pandemic recovery. As such, transitioning to these types of office spaces gives construction companies a better chance at success.
Promote Cost-Saving Features
Some businesses may be timid about buying or renting a new building amid their downsizing process. This hesitation can be a challenge for the construction industry, but it also reveals the way forward. Construction companies can appeal to downsizing businesses by promoting cost-saving features of new buildings.
Sustainable architecture is growing in popularity, and it can reduce ownership costs on top of protecting the environment. For example, geothermal heating systems can cut energy costs by 65% in some cases. Integrating these features into new projects can help attract businesses that are now more conscious of their overhead.
Cost-efficient features like this may offer the incentive businesses need to move to a new building. A smaller office space fits their downsizing needs, and a more energy-efficient one helps lessen the financial burden of a new building. As these needs grow, construction companies that can cater to them better may see more business.
Reimagine Commercial Buildings
Finally, as businesses downsize, the role that commercial buildings play will change. Construction companies must account for this change early to sustain their business in the future. On top of being smaller and more efficient, new office buildings need to account for the evolving workforce’s needs.
Namely, commercial buildings must be flexible, hosting a wide variety of different features and services to meet varying needs. Coworking spaces will likely rise in popularity amid mass downsizing and remote work, so buildings must account for this. Building office spaces that can meet multiple companies’ needs instead of serving a more singular focus may sell better.
In the wake of the pandemic, some businesses may pull back from busy urban areas in favour of distributed hubs in more suburban or rural locations. Taking this de-urbanized, distributed approach to commercial construction will appeal to businesses looking to cut costs. The business world is changing, so its architecture must likewise change.
Downsizing Creates an Uncertain Future for Construction
Mass business downsizing could disrupt commercial construction companies’ demand, especially in the short term. At the same time, the workforce’s ongoing evolution could create new opportunities for construction firms. The future is uncertain, but if the construction industry can notice and capitalise on these developing trends, it can emerge strong.