Technology Startups Looking to Revolutionize The Construction Industry

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The United States construction equipment industry is expected to grow 12% from 2016 to 2026.

According to the Census Bureau, 30% of remodeling activity was major additions and alterations (40% was for minor additions and alterations). There are plenty of reasons why the market will continue to grow, including a strong need for numerous construction jobs, an increase in construction spending, and all kinds of innovations within the sector. In fact, with a total market share of around 10%, the United States is currently the second largest construction market worldwide, and it is projected to grow even more. 

As far as construction spending is concerned, the U.S. Commerce Department has released April’s construction spending data, showcasing a surge of 1.8%, the largest increase since 2016. The increase even came after a significant 1.7% decline a month prior.

According to Construction Equipment, Total Construction spending throughout the first four months of 2018 amounted to $387 billion, 6.6% higher than the 2017’s first four months. April 2018 was estimated at approximately $1.3 billion.

New technological startups are poised to revolutionize the construction sector, as well.

Crunchbase adds that there are a few startups focusing on developing technologies that will expedite all kinds of construction projects. These projects are gaining some traction as a number of venture capital firms are investing. Overall funding for North American construction technology startups surged by 318% to $581.6 million in 2017 compared with only $182.7 million in 2013. Those figures are even projected to increase to as much as $865 million as more investors provide funding to new startups.

“Construction is a multi-trillion dollar industry that is beginning to adopt technology aggressively to reduce costs and increase productivity,” added Jerry Chen, Partner.

David Glynn, managing director and president of Glynn Capital Management, added that throughout the last 30 years, the industry has continuously struggled with challenges directly related to productivity.

“Within any project, labor is by far the biggest cost driver, representing over 50% of the total cost,” Glynn added. “With profit margins of 1 to 3%, any improvement in productivity or efficiency makes a big difference to overall profits.”

One of the leading startups that could soon impact the global construction market is Rhumbix, a San Francisco-based startup that has already raised more than $20 million to develop an innovative mobile platform designed for the construction craft workforce.

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