12 Biggest Challenges in Commercial Construction, and How a General Contractor Can Help

As the economy continues to recover from its recent downswing, the commercial construction industry also continues to grow. However, the industry is still encountering challenges that can affect businesses and investors. When it comes to effectively addressing and handling these challenges, hiring an experienced general contractor is a good way to ensure that your commercial construction project goes smoothly and successfully.

1. Cost Overruns

Sometimes, projects can get “carried away” and can end up costing significantly more than anticipated. A McKinsey study estimates that 98% of large construction projects suffer cost overruns of more than 30%. This can occur if materials need to be changed, if there are unexpected delays or additions, or if the planning gets out of hand and the building ends up a bit showier than originally anticipated. A general contractor can help keep track of expenses and scheduling, purchase the right materials for your commercial construction project, and make recommendations if the project has become bigger than it was originally planned to be.

2. Toxic or Polluted Land or Buildings

Land used for commercial development, or buildings rented by commercial tenants, can sometimes be environmentally unsafe if the previous owners or nearby businesses allow the space to become polluted. This sometimes occurs if chemicals or other toxic materials are leached into the ground or if the commercial construction project is built with toxic materials like asbestos or lead. Many general contractors have had previous experience cleaning up polluted land or renovating unsafe buildings and can advise you on the best ways to go about the process.

3. Climate Change

As more and more commercial construction businesses are becoming conscious of climate change, there is a growing push to make commercial properties “green” or “eco-friendly.” However, this can often involve employing new and innovative building techniques that a less experienced general contractor may not have dealt with before. Be sure to look for a general contractor with experience building green or LEED-certified buildings because they will have a good sense of what materials and processes to use, as well as how to make your building eco-friendly without exceeding your budget.

4. Old or Outdated Infrastructure

Often, commercial construction that is 40 or 50 years old needs renovation because the infrastructure is deteriorating or simply not up to modern standards. However, redoing an old building, especially critical parts like the frame or the foundation can be expensive and pose as biggest challenges in the construction industry. General contractors with experience renovating old commercial buildings can determine what needs replacing or if the building needs to be rebuilt from the ground up. They can also determine how to go about the renovation process efficiently and inexpensively.

5. Cost Estimating

Even if you plan very carefully, it is often difficult to determine exactly how much money your commercial construction project will cost and how much to budget for changes or problems that may arise. Once you establish how much you can spend on your project and what investments you can get for your project, talk to a general contractor who has handled similar projects. Your general contractor can review your budget and help you determine if there are any gaps or areas that you have overlooked. They can also tell you how much money changes or setbacks can cost so that you can add that to your budget accordingly.

6. Rising Costs of Materials and Labor

As with many industries, the commercial construction industry is facing the challenge of rising costs of raw materials and labor based on demand and the general state of the economy. According to the Associated Builders and Contractors, Inc., material costs rose by 5.3% between 2017 and 2018. High material prices can drive up the overall cost of your building project and cause problems with your budget. To make sure that your project goes as planned and that you do not have to cut corners, your general contractor will account for the increased costs of materials and labor. They will purchase the best quality materials for the price you can pay and by knowing exactly how many people to hire for the commercial construction project.

7. Renovations and Expansions

Perhaps you already have a commercial building in place, but it needs to be added onto or redone. Many things must be considered before beginning such a project — everything from zoning concerns to structural issues to aesthetic considerations. For any of these concerns, a general contractor can talk through them with you and determine the best way to approach your renovation or expansion.

8. Skilled Labor Shortage

Shortage of skilled labor is another big challenge for the construction industry. According to the Associated Builders and Contractors (AGC) report, a total of 80% of respondents said that they are struggling to fill some or all their salaried or hourly craft positions. General contractors can overcome labor shortages by planning labor for pursuit projects and avoiding potential staffing complications.

They will create a recruitment strategy to attract and retain quality skilled workers. In addition, general contractors will have systems in place that track certifications, experience, work records, and training programs for existing laborers.

9. Safety Concerns

Safety is one of the biggest challenges in the construction industry. As reported in 2021, construction accounts for 21% of all deaths among US workers. The building must meet safety codes and be solid and sturdy, but it is also important to remember safety while the building is being built to protect the workers. Part of a general contractor’s job is to ensure that all the safety requirements are met, both for the building itself and for the contractor’s employees. They will be able to answer any questions you may have about the safety of the building.

10. Managing Competition

You have the option of choosing from many different general contractors, but it is important to remember that the cheapest option is not always the best option. A skilled general contractor will provide the best price for the best quality, not simply the cheapest option or the fastest option. Be sure to consider each bid that you receive carefully, and pay close attention to whether the general contractor seems to be cutting corners solely for the sake of providing you with a lower bid.

11. Unpredictable Work Schedule

All kinds of things can pose challenges to your building process. Changes and delays can be caused by weather, supplies not arriving on time, altering plans, shortage of materials, and many other factors. It is important to consider these when planning your commercial construction project. Experienced general contractors have likely encountered every imaginable setback and can be a resource in helping you budget and prepare for possible delays on your project.

12. Sustainable and Efficient Construction

As the United Nations (UN) stated that the construction industry has the potential to reduce 84 giga-tonnes of CO2 by 2050, building professionals are trying to devise green solutions for their businesses. Sustainable construction is today one of the biggest challenges in the construction industry. It is causing financial strain on small construction companies and putting them at a disadvantage against big players.

Some policies and regulations may not provide consumers incentives to invest in energy-efficient building features. General contractors are now using sustainable building materials, following LEED practices, and incorporating green building designs in their projects. Through prefabrication, and lean manufacturing to reduce energy and waste management, they are increasingly adopting green building construction.

Conclusion

Because an experienced general contractor has handled these challenges before, they can help ensure that your commercial construction project is ultimately successful.

FAQs

What are the other biggest challenges in the construction industry?

Cash flow problems, bad forecasting, poor risk management, and failure to stay on schedule are some of the biggest issues faced by the construction industry.

How to overcome regulatory and legal challenges in a building project?

It’s a best practice to keep up with the regulations and rule updates. General contractors can engage with legal experts and maintain transparency with their clients.

How can general contractors adapt to technological advancements in the construction industry?

Real estate professionals can adopt various construction technologies like data analytical tools, drones, protective wearables, and the Internet of Things (IoT) to stay relevant in the digital age.

Relevant Resources:

• What Is A Commercial Contractor And What do They Do?
• 10 Common Mistakes To Avoid When Hiring a Commercial Contractor