The commercial construction industry in New Jersey and nationwide is currently facing an array of complex challenges that affect project timelines, budgets, and overall productivity.
Issues such as labor shortages, rising material costs, supply chain disruptions, regulatory compliance, safety concerns, and technology adoption difficulties are reshaping the industry’s landscape.
Below, we provide a detailed analysis of these key issues and strategies to overcome them.
One of the most pressing issues facing commercial construction in NJ and beyond is the significant lack of skilled workers. Factors like an aging workforce and challenges attracting younger talent further compound the problem. According to the Associated Builders and Contractors (ABC), the industry faced a deficit of over half a million workers in 2023 alone.
Commercial construction support firms, including engineering firms, architectural firms, and many of the leading construction management companies in New Jersey, find themselves competing fiercely for skilled tradespeople and project managers, pushing wages higher and straining project budgets.
To counteract this, construction companies must implement comprehensive training programs, offer competitive compensation, and actively engage in workforce development initiatives aimed at attracting new talent into the industry.
The increase in construction material prices, notably lumber, steel, and concrete, significantly impacts construction budgets. The National Association of Home Builders (NAHB) reported that material costs soared by over 19% year-over-year in 2022.
While rising prices have stabilized, they haven’t really retracted. In 2024, the average cost to construct a new single-family home reached $428,215, according to the NAHB, marking a record high in their survey series. This equates to roughly $162 per square foot.
These rising prices have been driven by global supply chain disruptions, limited raw material availability, and geopolitical tensions. Effective solutions involve proactive planning and diversifying suppliers to secure materials with long lead times.
Well-prepared multifamily construction firms like Centurion Construction adopt agile procurement strategies and contingency planning to navigate these disruptions successfully, ensuring projects remain on schedule and within budget.
Delays in construction projects are frequent and multifaceted, stemming from issues such as inclement weather, unforeseen site conditions, and material shortages. Poor initial planning exacerbates these delays, leading to cost overruns and client dissatisfaction. According to Construction Dive, non-public construction projects face significant delays, citing a 36.7% jump year-over-year in on-hold activity.
Utilizing advanced project management tools and scheduling software, along with employing experienced general contractors, can significantly reduce these delays. Accurate upfront estimating and thorough risk assessments are crucial steps in enhancing planning effectiveness.
For example, a Toyota dealership planning to install the latest brand image package and renovate its showroom will face numerous operational challenges – chief among them, executing the redesign without disrupting day-to-day operations. To navigate this smoothly, it would be wise to invest in project management tools like Procore and partner with an experienced auto dealership construction company that specializes in phased construction.
Keep in mind that no job is too small to benefit from good project management software. Even the best interior fit out companies in New Jersey use programs like Kahua or Procore.
Safety remains a paramount concern, as construction sites present numerous risks, including falls, struck-by incidents, and caught-in/between accidents. The Occupational Safety and Health Administration (OSHA) identifies construction as one of the highest-risk industries.
Whether they are remodeling car dealerships or storage unit builders for ExtraSpace, construction companies must enforce stringent safety protocols, invest in ongoing safety training, and maintain a culture where safety is prioritized at every organizational level. Regular site inspections and immediate corrective actions are also vital to preventing workplace injuries and fatalities.
Despite the advantages technology offers in efficiency and precision, the commercial construction sector has historically been slow to embrace digital transformation. Technologies such as Building Information Modeling (BIM), artificial intelligence (AI), and advanced project management software provide opportunities for significant productivity improvements.
Relying on paper plans and analog tools is quickly becoming a thing of the past. Resistance to change, inadequate training, and integration challenges often slow technology adoption. While construction standards vary by state, one constant remains in the Garden State: choosing a tech-savvy general contractor NJ developers trust can be the difference between a streamlined build and a costly mess.
Whether they are building skyscrapers or in advanced healthcare construction, any construction firm that wants long term success must proactively address these challenges by providing comprehensive training, demonstrating the clear benefits of technology use, and gradually integrating new systems into everyday operations.
Beyond the major issues impacting commercial construction today, several other persistent challenges can derail projects if not properly managed. These include financial, operational, and regulatory complexities that require just as much attention and expertise. These challenges are nothing new; they are a constant in the commercial construction industry.
Budget management and maintaining positive cash flow are critical challenges. Accurate budgeting, regular financial reviews, and stringent cost control practices are essential for sustaining project viability and company profitability.
Clear communication between project stakeholders – including contractors, subcontractors, and clients – is essential. Miscommunication can lead to costly mistakes, delays, and reduced client satisfaction. Utilizing centralized communication platforms and regular project meetings can mitigate these issues.
Staying compliant with local building codes and regulatory changes can be daunting. Employing dedicated compliance personnel and conducting regular training ensures firms remain informed and responsive to regulatory requirements.
Finding reliable subcontractors can be challenging but essential for successful project completion. Establishing strong networks and relationships, and maintaining rigorous vetting processes helps ensure subcontractor quality and reliability.
Ensuring workmanship quality directly impacts project outcomes and client satisfaction. Regular quality audits, adherence to rigorous construction standards, and continuous staff training help maintain high-quality construction standards.
Commercial construction is diverse, with each sector presenting unique challenges. Hotel builders and firms specializing in areas like multifamily construction face specific regulatory and operational hurdles.
Similarly, even restaurant construction and church construction companies must navigate industry-specific complexities. Understanding these unique demands allows for tailored strategies that improve project outcomes and operational efficiency.
To navigate these challenges successfully, commercial construction firms should adopt strategic best practices:
Today’s commercial construction landscape requires firms to proactively address labor shortages, material cost increases, supply chain disruptions, regulatory complexities, safety challenges, and technological transformations.
Through strategic planning, innovation, and rigorous operational practices, construction companies can successfully overcome these hurdles and ensure long-term success.
For more insights on navigating commercial construction challenges, visit our construction blog or contact our experienced team at Centurion Construction.
Ready to discuss your next project? Reach out to Centurion Companies, a leading construction management company in New Jersey, specializing in delivering high-quality, compliant, and efficient commercial construction solutions.
Explore today’s top commercial construction challenges – labor, materials, safety, tech – and discover expert strategies to keep your projects on track and on budget.
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