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A majority of index participants say their companies are innovative, while 69% say the nonresidential construction industry is only moderately innovative or less. (Copyright: alphaspirit / 123RF Stock Photo)

Nonresidential construction executives recently revealed a lot more about the sector’s challenges than simply trying to gain some economic traction. Forty-seven percent of respondents in the FMI Nonresidential Construction Index Report said their firms don’t have ongoing research and development efforts, and 69% ranked the industry’s ability to innovate as moderate to very slow.

Lack of innovation, according to the report’s authors, is troubling, given respondents saw no improvement in the sector’s productivity compared to last quarter’s index, in a time when labor shortages loom large. Tied to that, panelists revealed that lack of training and not finding innovative personnel is a concern for more than half of them. Their confidence in a favorable cost of labor also slipped from Q1 to Q2, dropping more than six points.

Generally, panelists participating in the index thought innovation needs to focus on increasing productivity and solving the shortage of skilled labor. Reducing commoditization of construction and improving safety and quality were also top of the list.

When asked where they thought innovation was coming from in the industry, 44% respondents nodded toward the supplier community, while 25% said from their own R&D efforts. Research universities and industry associations each received 14% of responses, and architecture and engineering firms got 3%.

Beyond the R&D and innovation issues, this quarter’s index is up on the overall economy, overall economy where panelists do business, panelists’ own construction businesses, the nonresidential markets where panelists do business, and panelists’ expected backlogs.

You can see the whole report, right here.

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