Commercial Construction Trends for 2022

We, at AO Contractors, noticed some commercial construction trends for 2022 are a continuation of what’s been happening over the last 18 months, which is not unusual. These trends are amplified with the volatility of the economic landscape.

1. Construction Costs Continue Rising

According to Forbes, “Over the past year, a combination of labor shortages, supply chain disruption and economic growth pushed inflation to its highest rate in decades. In commercial real estate, the impact was largely felt in new construction, where materials drove project costs up significantly.”

Although construction costs started to rapidly rise year-over-year from 2020 to 2021, the sticker shock we’re experiencing in 2022 is exponentially higher with a trajectory that hasn’t been seen since the early ‘80s. 

According to Bloomberg.com, “U.S. inflation hit a 40-year high of 7.9 percent before the recent oil spike,” some of the highest on record. And with the Federal Reserve starting a series of interest rate hikes to begin next week, the result will only compound the economic impact.”

However, there is an upside for commercial real estate when there’s such volatility in the stock market. “Real assets-and real estate in particular tend to maintain their value or potentially see their value increase in inflationary environments,” according to CADRE Insights, especially commercial real estate. 

2. Construction Technology Sees Increased Growth 

The pandemic has affected the way the commercial construction industry does business. Normally more reticent than other industries to implement technology,  the commercial construction industry is continuing the trend of adopting new technology in 2022 and beyond. 

​​According to Construction Dive, “Notably, this past year has seen rapid technological advancements on job sites, in part due to necessity. Contractors were faced with various COVID-19 challenges that accelerated their adoption of new tech.”

Innovative tools, software, semi-automated and automated machinery, data gathering and analysis, digital visualization, 3-D printing, and AI are increasingly solving many of the commercial construction industry’s biggest problems. From safety and productivity to project management and labor shortages, “contech” is playing a larger role.

3. Hybrid Office Space Trend Remains 

The evolution of the hybrid work space has become more the trend and norm than traditional physical commercial office space. “​​[The physical office] is looking to upgrade. While the office market contends with its highest vacancy in recent decades, investors can expect to see occupancy and rent growth stabilize this year,” according to Forbes.

According to Harvard Business Review, “More than 90% of employers are planning to adopt a hybrid working model for their knowledge workers in 2022. With hybrid and remote work as the norm, the geographic radius of the organizations that someone can work for also expands.”

With two decades of collective experience in commercial construction, Alpha Omega Contractors knows that staying ahead of 2022 Commercial Construction Trends is helpful to our clients and your business. As your go-to construction company in Southern California, our AO team helps bring your renovation wish list to life while helping you safeguard and future-proof the profitability of your business. Our experienced team of general contractors, designers, and design-build experts will collaborate with you from the initial stages of pre-construction through to putting the finishing touches on your dream remodel project on time and within budget.