— F O R E WO R D

How we build now.

Construction is both inspiring confidence and In the U.S. and Canadian construction markets, confidence
driving new opportunities across the industry. levels in the industry are high. Despite challenges, there is
significant digital transformation underway, led by owners.
We’ve seen massive strides in both digital and cultural
Effective preconstruction is top of mind for respondents as
transformation, spurred on by new technologies arriving
they seek to improve processes. As construction management
every day and talented people who are building for the
platforms start to become more and more ubiquitous, the
future. In the U.S. and Canada, changes in construction
industry is noticing the benefits of a single source of truth
are happening across all regions with an ever-improved
for all their project and workforce data.
focus on delivering the best projects.

Procore is committed to helping the industry gain never-

To get a pulse on the current construction climate in the
before-seen insights, unlock data-driven decision making, and
U.S. and Canada, Procore teamed up with Censuswide to
create a culture of safety and well-being for their teams. Better
determine how business owners, general contractors and
access to real-time and historic data means that organizations
specialty contractors feel about the industry today. Over
can work proactively instead of reactively. Procore wants to
1,000 surveyed respondents dove into a variety of topics,
help raise performance levels and support the industry as it
from digitization and workforce well-being to labor
undergoes transformation.
challenges and sustainability.

Read on to explore how we build now – and how we can build

better in the future.

Anthony Frattali
Head of Region, North America, Procore
— KEY HIGHLIGHTS

Respondents are dissatisfied with the

Business confidence is high. Data-driven construction is the future. current state of payments and insurance.

90% 43% 47%

of respondents feel confident, with 50% of respondents say having access to of specialty contractors and 39% of
feeling very confident about market historical information would help them make general contractors report experiencing
conditions over the next 12 months. better decisions. Additionally, respondents cash flow problems arising from delayed
believe 13% of total project spend can be payments, while 36% of owners report
saved by capturing and standardizing data that delays from not getting payments
more efficiently. made quickly have cost them money.

Project performance leaves room for Economic volatility could help accelerate
improvement. digital transformation.

28% 32%
of total project time is spent on rework, while of respondents report they need new technology
18% of project time is spent searching for data — that will help drive operational efficiencies and cost
significantly impacting performance with nearly controls in reaction to the economic conditions.
half of projects going over time and budget.
Contents
01 Business Outlook and Challenges on the Horizon 5
+ Business Sentiment and Outlook
+ Top-of-Mind Challenges on the Horizon
+ A Case for Optimizing Delivery of Financial Services

02 Technology, Data and Digital Transformation 15

+ Current State of Digital Transformation
+ Future of Construction is Data-Driven
+ Construction Technologies on the Horizon

03 Reacting to a Rapidly Evolving Labor Marketplace 29

+ Cautious Optimism about Labor Challenges
+ Spotlight on Workforce Diversity and Wellbeing

04 5 Steps Forward 35

05 Appendix 36
+ Methodology & Demographics
— CHAPTER ONE

Business Outlook
and Challenges
on the Horizon
 2023 | 6

Business Sentiment and

12 Month Outlook
Strong industry confidence despite economic difficulties across Confidence around construction industry market conditions
business types and sizes.
At the start of 2023, the construction sectors in U.S. and Canada faced a mixed
economic picture. On the positive side in the U.S., energy prices began to fall and All
construction input inflation eased. But set against that, materials prices were still
up 11.9% year over year by November 2022 and the Congressional Budget Office
forecasted that the U.S. economy would expand by a mere 0.1% in 2023. Similarly 50% 39% 9% 1%
in Canada, inflation declined, but economists also reported a weak economy that
would expand by just 0.3% in 2023.
Owners / Developers

Despite bleak economic projections, construction leaders in both countries

express optimism as they look to consolidate and make post-pandemic progress. 54% 38% 8% 1%

General Contractors

53% 37% 9% 1%

90% of respondents feel

confident about the
construction industry market conditions
Specialty Contractors

over the next 12 months.

44% 44% 11% 1%
Half of respondents are very confident
about the market conditions, and 74% of
all respondents expect both the number
and value of projects completed by their
organizations to increase in the next 12 Very confident Somewhat confident Not particularly confident Not confident at all
months.
 2023 | 7

Broken down by company Expectations around number of future projects Expectations around value of future projects
type, specialty contractors
are more conservative
about the construction
outlook when compared
to general contractors All All

and owners. Eighty-one

percent of owners and
28% 46% 17% 8% 1% 27% 46% 19% 6% 2%
79% of general contractors
expect the number and
value of projects completed Owners / Developers Owners / Developers
by their organization to
increase in the next 12
months compared to 67% 32% 45% 15% 7% 1% 32% 44% 16% 6% 2%
of specialty contractors.
General Contractors General Contractors

31% 48% 15% 5% 1% 25% 50% 19% 5% 1%

Specialty Contractors Specialty Contractors

22% 45% 21% 10% 2% 24% 44% 22% 8% 2%

Increase Increase No change Decrease Decrease Increase Increase No change Decrease Decrease
substantially slightly slightly substantially substantially slightly slightly substantially
(over 20%) (up to 20%) (up to 20%) (over 20%) (over 20%) (up to 20%) (up to 20%) (over 20%)
 2023 | 8

Some of this confidence in the U.S. rests on the Bipartisan Infrastructure Law, Percentage of respondents who expect the number of projects
as enacted in the Infrastructure Investment and Jobs Act, which authorizes completed by their organization to increase over the next 12 months
up to $1.2 trillion for public transportation and infrastructure projects — the
largest federal investment in public transportation in the nation’s history. In
addition, many contractors will win work off the back of the 2022 CHIPS and
79%
Science Act, which gives a $280 billion boost to investment in manufacturing Energy and 79%
semiconductors, scientific research and development, and workforce Utilities 73%
development. 71%
Civil and
68%
In Canada, the government’s ‘Investing in Canada’ program — estimated to Infrastructure 64%
be worth $180 billion over the next decade — will see upgrades in public 57%
transportation, ongoing nuclear refurbishments and new wastewater projects.
Multi-Family
To date, over 85,000 projects across all sectors have been approved, with a
Residential
total value of over $131 billion.

Accordingly, organizations in both countries involved in civil, infrastructure, Commercial

energy and utilities (defined as organizations that do 40% or more of their
work in a construction area) are more likely to be confident about an increase in
the number of projects completed by their organization in the next 12 months Healthcare
compared to organizations involved in single-family residential, education and
healthcare.
Single-Family
Residential

Education

While respondents across construction sectors expect growth, this may not
translate to improved availability of real estate assets in these segments. For
example, just half of the respondents working in the residential sector expect
to build more housing units in 2023 than they did in 2022.
 2023 | 9

Top-of-Mind Challenges
on the Horizon
Performance remains a cause for concern with almost half
of all projects going over budget and schedule. Average percentage of projects going over budget and over schedule

0-1% Over Budget

1-5% Over Schedule

On average, respondents report

49%
6-10%
that 49% of their projects go over

PERCENT OF PROJECTS
budget and over schedule. 11-15%

16-20%

21-25%

26-30%
A constantly in-flux operating environment is partly to blame for these dismal
performance numbers with rising project complexity, rising material prices and 31-35%
labor shortages all having a role to play.
36-40%

> 40%

0% 20% 40% 60%

PERCENT OF RESPONDENTS
*Don’t know responses not shown here.
 2023 | 10

Economic headwinds occupy mindshare Sustainability and rework are in focus

and impact bottom lines. across projects.
The current economic environment is top of mind for organizations. Respondents Tackling climate change and becoming more sustainable is likely to be a
consider its potential impact on current and future projects as one of the top significant challenge for the construction industry over the next few decades,
challenges they face over the next 12 months. Their two other top challenges are evidenced by both countries’ governments committing themselves to achieving
improving productivity to help manage backlogs along with protecting margins and net-zero emissions by 2050. As building construction is directly responsible
maintaining profitability across projects. for around 10% of total greenhouse gas emissions, the sector has a unique
opportunity to make an impact by reducing its annual carbon dioxide emissions.
Poorly performing economies in both countries mean that margins and profitability
are under pressure from a range of higher input costs. With an increasing emphasis on building sustainably, it’s no surprise that 41%
of respondents are either tracking or plan to start tracking carbon emissions on
their projects within the next 12 months. Just 31% of respondents report that
sustainability is not a key issue for them right now on their projects.

of general contractors and specialty

50%
contractors report that fluctuating
33% material costs have eaten into their
margins as they’ve been unable to
Approximately half of owners,
general and specialty
contractors report focusing
pass them onto owners. on strategies like prefabrication and improved
material selection in order to reduce the carbon
footprint of projects.

52% OWNERS

51% GENERAL CONTRACTORS

45% SPECIALTY CONTRACTORS

of owners report higher project

38% costs due to fluctuations in
material pricing.
Finding a way to minimize the amount of rework is
also essential — high levels of waste are currently
a major impediment to improving sustainability.
Improper planning, coordination issues and scope
changes can create rework and waste as well.

Rework can also push projects over schedule and

budget, thereby degrading construction’s overall
performance. Contractors are keenly assessing
technology’s potential to offer a transformative
solution to these systemic problems. This is
exemplified by the impact technology has on
productivity and profitability, as discussed later
in the report.

On average, around 28% of a

project’s total time is spent on
rework or rectifying issues.
 2023 | 12

Companies are leveraging advanced

purchasing and localized supply chains
to balance material shortages. A Case for Optimizing
With both countries suffering from high inflation rates, 50% of general
contractors and 43% of specialty contractors are considering or have
Delivery of Financial Services
considered advanced purchasing of materials to counter price fluctuations,
shortages and other supply chain problems. Localization of supply chains is Improving payment processes is a necessity.
another way to manage these fluctuations.
Over half (55%) of respondents feel the industry can do a better job of
leveraging existing data to simplify payments and improve insurance
Percent of organizations starting to programs. This sentiment is felt most strongly by general contractors with
look at local material suppliers: 64% feeling the need for improvement, compared with 55% of owners and
47% of specialty contractors.

48%
OWNERS

39% 47%
41%
GENERAL SPECIALTY
CONTRACTORS CONTRACTORS

GENERAL CONTRACTORS
Experience cash flow problems arising from delayed payments.

39%
SPECIALTY CONTRACTORS
 2023 | 13

Percentage of projects on which payments are received on time

PERCENT OF PROJECTS

1-10% 1%
11-20% 4%
21-30% 9%
31-40% 14%
41-50% 12%
51-60% 14%
61-70% 20%
71-80% 17%
81-90% 4%
91-100%

Owners have their own set of challenges when it comes to payments. 0% 10% 20%

36%
PERCENT OF RESPONDENTS
of owners report that overages and/or delays from not
getting payments made quickly have cost them money.
These cash flow problems often impact a contractor’s risk profile, which may lead to
banks being reluctant to lend to them. In fact, 44% of specialty contractors report
Additionally, 38% of owners report their frustration that invoiced amounts experiencing trouble getting approval for financing from traditional lending institutions.
regularly do not match the amount of work completed. Contractors who This adds further financial strain which can be catastrophic for specialty contractors,
reported experiencing cash flow problems due to delayed payments who must often pay for materials 60-90 days before they get paid, on top of covering
received payments on time on just 55% of their projects. overhead, labor and other operating costs.

*Out of respondents who reported experiencing cash flow problems arising from delayed payments. Don’t know responses not shown here.
 2023 | 14

Insurance needs to be more

data-driven.
Percent of project costs attributed to insurance-related expenses
Despite industry innovation, outdated insurance processes persist,
causing frustrations like long waits for quotes, rising costs and a lack of
data-driven risk assessment. Notably, the insurance industry has been PERCENTAGE OF RESPONDENTS
slow to utilize data to reflect the technology-enabled risk mitigation 50%
contractors are implementing, leading to an inefficient representation of
modern contractors’ true risk profiles.

40%

30%

36%
of respondents report frustration
with the time it takes to get
construction insurance quotes.
20% 39%

26%
10% 19%

6%
0%
1-5% 6-10% 11-15% 16-20%
or more

These respondents also report that, on PERCENTAGE OF PROJECT COSTS

12%
average, around 12% of their total costs
on a project are due to insurance-related Given these financial implications, contractors should take a long, hard look at their
expenses (across all stakeholders). insurance costs as a strategic initiative to reduce costs, increase cash flow and improve
their bottom line. When optimized, insurance can be a powerful tool for business
protection, risk minimization and long-term cost-saving.

*Out of respondents who reported get frustrated with the time it takes to get construction insurance quotes. Don’t know responses not shown here.
— C H A P T E R T WO

Technology,
Data and Digital
Transformation
Current State of Digital
What impact has the economic/industry volatility had on the way your
company thinks about digital transformation over the past 3-6 months?

Transformation
32%
Need new technology to drive
operational efficiencies
Economic volatility has triggered the need for
digital transformation.

When asked about the impact economic/industry volatility has had

on the way their company thinks about digital transformation, 32%
23% Consolidate tech investments

of respondents report they need new technology that can help drive
operational efficiencies and cost controls. About 22% of respondents
feel they need to start looking at existing technology to understand
what’s working and what’s not, while 23% want to consolidate their
23% Re-evaluate current tech stack

investments in technology to bring down ownership costs.

21% Scale back plans for evaluation

new technology
This emphasis on
optimizing technology
stacks can lead to
reduced tolerance for 1% No change

poorly adopted tools

and for solutions that
0% 10% 20% 30% 40%
are leveraged by siloed
teams to solve smaller
point problems.
As some organizations look for new technology and others review the effectiveness and efficiency of their
technology stack, a small fraction (21%) of respondents report the need to scale back plans for evaluation and
rollout for new tech. A majority of these respondents represent small- and medium-size builders (GCs and
specialty contractors). The need to conserve cash flows and lack of workforce bandwidth are likely reasons
for this. Additionally, this may be due to some software vendors overpromising and under delivering in the
past. However, with margin protection and productivity in sharp focus as highlighted in the report earlier this
may not be the best approach to get out stronger from a period of economic stagnation.
 2023 | 17

Owners lead the way when it comes to

digital transformation.
With the need to cope effectively with economic volatility driving them, owners lead
the construction industry in terms of digital transformation. Twenty-seven percent
consider themselves to be a digital-first business and another 44% of owners say they
are well on their way to adopting digital formats and workflows.

Journey towards digital transformation

2% 2% 3% 2%
100%

28% 26% 28% 30%

75%

50% This high level of digital adoption by owners contrasts with the state and
47% 44% 52% 46% Not yet started
speed of digital transformation in the rest of the construction sector. Thirty
percent of general contractors and 32% of specialty contractors are either
Just starting out just starting out or have not yet started on their digital transformation
journey.
25%
Well on way
Despite slower digital transformation across the board, more specialty
23% 27% 18% 23% contractors (23%) compared to general contractors (18%) consider
Digital-first business
themselves to be a digital-first business.
0%

OVERALL OWNERS / GENERAL SPECIALTY

DEVELOPERS CONTRACTORS CONTRACTORS
2023 | 17
 2023 | 18

Non-digital workflows are not totally

Key workflows and state of digitization
a thing of the past. Responses are averaged across 13 software areas surveyed.

Regardless of what type of workflows respondents were asked about, on

average, 26% of them still use paper-based records or non-digital processes
as part of their workflows.

Standard productivity
and/or communication
software
40%

Specific software solutions

or point solutions 34%

Integrated
software suite 34%

33%
Customized software
or software developed
in-house

Paper-based records or
non-digital process 26%

0% 20% 40%
Specialty contractors are more likely to have some element of paper-
based records and non-digital processes as part of their workflows
compared to owners and general contractors.

*Software asked about 13 categories, ranging from estimating, invoicing, document management, quality, safety to production tracking.
 Internal and external challenges exist when it comes to 2023 | 19

digital transformation.
As organizations navigate their journey towards digital transformation, they face a set of challenges
both external and internal, which vary based on type of firm.

Top challenges towards digital transformation

OWNERS / DEVELOPERS GENERAL CONTRACTORS SPECIALTY CONTRACTORS

40% 40% 40%

30% 30% 30%

20% 20% 20%

28%
26% 26%
24% 24% 23% 23% 23% 22%
10% 10% 10%

0% 0% 0%

Lack of support Time and capacity Overcoming Changing established Overcoming Lack of software Lack of support Lack of software Lack of internal
from technology restrictions concerns around practices and concerns around solutions that from technology solutions that capability
providers data security behaviors data security meets needs providers meets needs

*Based on the highest percentage of respondents to choose this answer as one of their top three choices
 2023 | 20

Which of the following would improve productivity

Technology and within your organization?
preconstruction are
key performance
enablers.
50%
This focus on preconstruction
should come as no surprise,
as increased risk and project
Productivity has been a focus area for
complexity lead to more 40%
construction, rightfully so considering
collaborative delivery methods
the workforce shortages the sector has
such as integrated project
experienced over the past several years.
delivery (IPD). Effective
Globally, construction productivity has 30%
preconstruction can help key
generally lagged behind other sectors such
stakeholders better manage
as manufacturing.
some of the top challenges
around schedule and supply
When asked about the factors that 20%
37%
chain disruptions that were 34% 32%
would improve productivity within their
highlighted earlier.
organization, one of the top answers
from respondents was involving
Besides preconstruction, 10%
contractors early on during planning and
upskilling employees and
preconstruction stages of a project.
adopting tech to make teams
more efficient were other top
Effective preconstruction, as outlined 0%
factors that respondents felt
in an earlier research study, involves Adopting technology Upskilling employees Involving contractors
could drive productivity.
initiating the preconstruction process to make teams more (e.g. soft skills, early on during
early, allocating specific resources for efficient, reduce rework technical skills and planning and
preconstruction tasks, involving all project and prevent costly trade specific skills) preconstruction stages
stakeholders and utilizing technology to overheads of a project
optimize the preconstruction phases.

*Based on the highest percentage of respondents to choose this answer as one of their top three choices.
Which of the following would improve profitability
within your organization?

50% Key tenets of preconstruction again

have a role to play when it comes
to profitability. When asked about
the factors that would improve
40%
profitability within their organization,
the top responses from respondents
were simplifying existing tech and
30% processes, making improvements
to the way projects are priced to
improve the accuracy of estimates
and adopting tech to make teams
20% 39% more efficient.
32% 32%
Effective preconstruction planning
10% can provide early visibility into
potential risks, help establish
realistic budgets and help create
more accurate timelines. All these
0%
together can help reduce project
Adopting technology Simplifying existing Making improvements delays and unexpected costs,
to make teams more technology and to the way projects are leading to higher profitability.
efficient, reduce rework processes to reduce priced to improve the
and prevent costly time spent on accuracy of estimates
overheads manual, repetitive
and low-value
administrative work

*Based on the highest percentage of respondents to choose this answer as one of their top three choices.
The Future of Construction
is Data-Driven

Up to 13% of total spending on projects

can be saved by capturing and standardizing
data more efficiently.

The impact of capturing, integrating and standardizing data more efficiently

cannot be understated. Respondents feel they could save up to 13% on
average of their total spending on projects if they captured, integrated and
standardized data more efficiently.

Owners report increased productivity, improved visibility and help in achieving

sustainability goals as the top benefits they expect by investing in capturing,
integrating and standardizing data from different parts of their business.
 2023 | 23

However, cost savings aren’t the only benefit that comes from making
investments in better capturing and connecting data. General contractors
report better visibility, help in achieving sustainability goals and improved
decision making on current and future projects as the top benefits they expect
by investing in capturing, integrating and standardizing data from different
parts of their business.

Specialty contractors report increased productivity, better regulatory of time on a typical project

18%
compliance and improved decision making on current and future projects
as the top benefits they expect by investing in capturing, integrating and
is spent searching for data
standardizing data from different parts of their business. or information.

Accurate data also drives better

decision-making.

The industry clearly realizes the value of data. However, the way data is

43% currently managed at most organizations leaves much to be desired. It’s

often inaccessible and under-utilized in decision-making. Solving both of
these problems can increase the valuable insights accurate data provides.
of respondents feel they would make
better decisions if they had greater When asked how much time they spend just searching for data or
access to real time and historic information, respondents reported spending 18% of their time on average
information on project performance. on a typical project — a significant number of hours to invest in a low-
value task.

Predictably, the time spent searching for data or information increases as

the company size increases, rising from 16% for smaller builders to 19% for
larger ones. A similar pattern exists for owners too.
Data maturity is a function of size for builders. 2023 | 24

Although large amounts of time are spent searching for information, not everyone is able to
leverage data effectively.
When it comes to general contractors and specialty contractors
Forty-five percent of respondents consider themselves at Level 2 when it comes to their use (builders), the level of data maturity varies based on company size,
of data. This means they have a foundation in place to begin learning from data but don’t with smaller businesses more likely to be at Level 1. Twenty-seven
necessarily have a dedicated data team in place. Another 21% are at Level 1 — here, much of percent of respondents from small businesses reported being at
their data exists in spreadsheets and or paper. Level 1 compared to 21% from mid-size businesses and 12% from
large builders. Large builders lead the pack in terms of data maturity
Twenty-six percent report having highly data-driven decision making, made possible by with 48% reporting they are at Level 3 or 4.
dedicated data teams (Level 3). Eight percent are gaining insights from data that they
consider as a differentiator for their business (Level 4).

Data maturity levels Data maturity based on company size for all respondents

Level 4: Optimized
Small Company
At this level the organization is gaining insights from data that are

04 differentiators for their business. Continual process improvement

initiatives spawn from insights found in data.
26% 43% 25% 6%
y
rit

Level 3: Leveraging
tu

The organization’s decision making is highly driven by data. There

Ma

03 is investment in business intelligence (BI) tools and dedicated data

ta

Medium Company
engineering and analytics groups to enable data-driven decision making.
Da
ing

Level 2: Learning
21% 50% 25% 4%
s
rea

The organization has a foundation in place to begin learning from data.

02
Inc

There are no dedicated data professionals on the team, but individuals

are leveraging data to drive metrics for their own role/team.

Large Company
Level 1: Foundation
At this level the organization is early in it’s data journey. Much of
01 the data currently exists in spreadsheets or paper form and is not
15% 39% 29% 17%
leveraged to drive business outcomes.
Construction Technologies
on the Horizon
Construction management platforms are transforming
the industry.

Respondents rated construction management platforms as one of the top

technologies that will drive change in the construction industry over the
next three years.

Ranking alongside construction management platforms, respondents said

clean technologies (involving green, sustainable or innovative materials)
and BI platforms will also be among the top technologies that drive change
in the construction industry over the next three years.

This emphasis on construction management platforms as a catalyst for

change is also visible when it comes to adoption.

34%
of respondents report using a construction
management platform, with 30% planning
to adopt one in the next 12 months.

Meanwhile, 62% of respondents are either currently using or plan to adopt

a BI platform within the next 12 months.
 2023 | 26

Use of technology

Business intelligence (BI) platforms

including data capture and analytics

Traditional BIM (building information

modelling 2D/3D)

Construction management platforms that

connect and simplify workflows across
preconstruction, project execution,
financial and workforce management

Drones

Prefabrication and 3D Printing

Telematics or asset and equipment

tracking (fleet/asset management
technologies)

Internet of things (IoT)

Clean technologies involving green,

sustainable or innovative materials
Next-generation BIM along with AI and ML (artificial
intelligence and machine learning) represent the two
technologies that are most likely to take the longest Robotics

time to adopt, with 36% of respondents stating that they

are neither currently using nor planning to adopt these Extended reality technologies
including AR, VR
technologies within the next 12 months.

Artificial intelligence (AI) and

We expect this timeline to change with the advancements machine learning (ML)
of AI into technologies respondents are using daily. The
ability to grow further into data maturity will become Next generation BIM (4D, 5D, 6D,
easier as large language models (LLM) are integrated into 7D, and 8D)

existing solutions through in-app directions, command 0% 25% 50% 75% 100%
driven actions and search intelligence all with accurate
context for the tasks at hand.
Currently using Planning to adopt Considering adoption but Have not adopted Unsure
within the next 12 mos not within the next 12 mos / not under
consideration
Respondents recognize these technologies can dramatically change how the industry
functions. They expect their top three areas of impact to be improved construction
efficiency, tighter collaboration between owners, general contractors and specialty
contractors, and reduced requirements for human labor in some construction functions.

How will these technologies impact the construction industry as a whole?

OWNERS GENERAL CONTRACTORS SPECIALTY CONTRACTORS

Improve construction Reduce build times Improve construction

efficiency efficiency
Reduce human labor
Reduce human labor requirements in some Reduce human labor
requirements in some construction functions requirements in some
construction functions construction functions
Require people in the
Lead to tighter industry to develop Lead to tighter alignment
alignment between broader skills between owners, GCs
owners, GCs and and specialty contractors
specialty contractors

The need to improve collaboration remains a key focus area for the industry. Almost half (49%) of
respondents agree that the industry needs to embrace greater collaboration (including virtually)
among stakeholders (owners, developers, general contractors, specialty contractors, engineers
and consultants) on projects.
 2023 | 28

Owners and general contractors see

more value in tech consolidation
compared to specialty contractors.

Nearly half (48%) of owners and 46%

of general contractors report they

48% prefer an integrated solution (a single

platform that can meet most of their
OWNERS needs) compared to 39% of specialty
contractors.

Of the respondents who

report preferring an individual

46%
solution, the top three reasons
for doing so are:
GENERAL CONTRACTORS
+ Ability to target a specific
business need

+ Access to specialized expertise

from the technology provider

39% + Faster or easier implementation

SPECIALTY CONTRACTORS
— CHAPTER THREE

Reacting to a
Rapidly Evolving
Labor Marketplace
The industry is cautiously
optimistic about labor
challenges despite shortages.
The construction industry has been in the midst of a labor crisis for awhile now. In
the U.S., industry research estimates that the industry will need to attract 546,000
additional workers on top of the normal pace of hiring in 2023 to meet the demand for
labor. In Canada, BuildForce expects 20% of the 2022 construction workforce to retire
by 2032, with Statistics Canada reporting over 60,000 construction job vacancies during
each quarter last year.

The impact on the industry has been

significant. Nearly 29% of respondents
29% have been unable to take on more
projects in the past three to six months
because of labor shortages.

2023 | 30
Labor problems have a significant impact on all aspects of company
performance. As well as restricting bidding opportunities, they damage
productivity, create work backlogs and can make it harder to maintain a safe
working environment.

When asked to identify the root of the problem, 30% of respondents feel it is
hard for construction to compete with other industries for good employees,
and 25% say there is too much competition within construction itself for the
existing talent.

To add to the pressures, because of the

aging workforce as reported above, 30%

30%
of respondents believe some of their most
experienced people will retire within the
next few years, taking valuable knowledge
with them.

Yet despite these fundamental challenges,

respondents are optimistic about the future.
Eighty-four percent are confident they will have

84% enough people to meet their organizational needs

over the next 12 months. The same number are
confident their workforce will have the necessary
skills to meet demand over the next 12 months,
with larger builders the most confident of the
three groups surveyed.
 2023 | 32

Fostering workforce well-being

through an inclusive, diverse and Diversity and inclusion policy/plans to improve workforce diversity

safe environment can help fight

labor challenges. All

Opening up the industry to a more diverse range of people will help

increase the pool of available talent and should help ease the labor
45% 43% 11%
challenges.
Owners / Developers

Organizations recognize this, with 40% of respondents agreeing they

need to improve diversity and inclusion in construction workplaces to
attract women, minorities and historically underrepresented groups.
53% 37% 10%

45%
of respondents have a diversity and inclusion General Contractors
policy in place already, and an additional 43%
plan to implement one in the next 12 months.
47% 45% 8%
Owners are leading the way: over half have a diversity and inclusion
policy in place now, compared to 36% of specialty contractors and Specialty Contractors
47% of general contractors.

36% 48% 16%

Currently have Planning to implement Not planning to implement

in place in the next 12 months in the next 12 months
 2023 | 33

Despite these efforts, more needs to be done to improve diversity in the

construction industry. Respondents report that on average, just 26% of the
executive staff and leadership at their organizations are female. Wellness and mental health practices and/or policies to improve staff
well-being and reduce the likelihood of burnout
Staff well-being is important to construction organizations, with 48% of
respondents having a wellness and mental health policy in place to reduce the
likelihood of burnout, and 41% planning to implement one in the next 12 months.
All

Increased use of construction management platforms can help teams upskill

traditionally underrepresented groups in construction through streamlined 48% 41% 11%
training, certifications and better managed schedules. This ensures their work
is both productive and innovative, creating better operational visibility and
Owners / Developers
improved workforce management.

Additionally, construction management platforms help organizations improve the 49% 41% 10%
safety of their jobsites through reporting and standardizing safety procedures.
Increasing the physical and mental safety of jobsites is just one to make
General Contractors
construction a more attractive career for novice workers.

54% 38% 8%
Specialty Contractors

41% 42% 17%

Currently have Planning to implement Not planning to implement

in place in the next 12 months in the next 12 months
 2023 | 34

Project management is one of the

top skills likely to be in demand.
When it comes to skills, respondents consider data analytics,
project management and commercial/financial management as the
top skills likely to be in demand in the construction industry over
the next 12 months.

Organizations are preparing their workforces for these

new demands.

47%
of respondents say that they currently
have in place employee training
programs for upskilling and reskilling,
while 41% are planning to implement
one in the next 12 months.
 2023 | 35

5 Steps Forward
How can you and your organziation take action
on these learnings? Here are five ways to work
towards a better business based on the findings
in this report.

01 Engage in effective preconstruction to improve productivity 04 Proactively manage data to improve payment and
and profitability. insurance processes.
With nearly half of respondents reporting their projects go over Risk data generated by construction technology platforms
budget and over schedule, it’s critical to find ways to deliver better are currently not evaluated in risk decisions. Over half of
outcomes across projects. Getting projects off to a solid start begins respondents feel the industry can improve the way they
with a thorough, well-documented preconstruction process, and the leverage data to simplify payments and improve the way
right technology to support it. contractors view insurance.

02 Focus on diverse hiring strategies to combat labor shortages. 05 Leverage construction management platforms for
Faced with a limited pool of talent, organizations see the value of competitive advantage.
tapping into historically underrepresented groups in construction, Respondents consider construction management platforms
including women and minorities. With easily adopted software, to be one of the top technologies that will drive change over
upskilling inexperienced hires can help alleviate the pressure of the next three years. It’s no wonder, then, that many owners,
workforce challenge and foster the next generation of construction. general contractors and specialty contractors already
are or plan to implement such a platform within their own
03 Standardize data to free up project time and unlock insights. business to stay ahead.
Currently, 18% of time on a typical project is spent searching for
data. Often, this information is inaccessibly located in silos rather
than flexible software. Capture and standardize data more efficiently
to save up to 13% of total project time.
 2023 | 36

Methodology Demographics
In early 2023, Procore partnered with Censuswide to survey 1,005 Nature of Firm
construction industry stakeholders in the U.S. and Canada across
owners, general contractors, and specialty contractors. Questions
provided to the participants were focused on market conditions, top

33% 33% 34%

challenges, digital transformation and technology adoption.

Please note that Censuswide abides by and employs members of

the Market Research Society and follows the MRS code of conduct, Owners General Contractors Specialty Contractors
which is based on the ESOMAR principles.

Company Size by Revenue Regional Diversity

Company size designations
used in this report
To provide a comprehensive perspective, survey respondents
35% 50% Canada

include companies that range from the local equivalent of $5 million $5 million – $50 million
to over $1 billion (USD) in annual construction volume. For analysis 50% U.S.
purposes in the report, these are grouped into three categories:

+ Small companies: $5 million to $50 million 43%

+ Medium companies: $51 million to $250 million $51 million – $250 million

+ Large companies: $251 million and above

22%
$251 million and above
Produced by
PROCORE TECHNOLOGIES, INC.

Procore is a leading global provider of construction management software. Over one million projects and more than $1
trillion USD in construction volume have run on Procore’s platform. Procore’s platform connects key project stakeholders to
solutions Procore has built specifically for the construction industry—for the owner, the general contractor, and the specialty
contractor. Procore’s App Marketplace has a multitude of partner solutions that integrate seamlessly with Procore’s platform,
giving construction professionals the freedom to connect with what works best for them. Headquartered in Carpinteria,
California, Procore has offices around the globe. Learn more at procore.com.

Disclaimer: Some percentages throughout report may not sum up to 100% due to rounding.