VIDEO: Alex Carrick Interview With Oldcastle Building Solutions - Part 3
ConstructConnect's Chief Economist Alex Carrick recently sat down with Carolina Borges Cavalcante of Oldcastle Building Solutions to discuss the economy and the outlook for the construction industry. In Part 3 of the interview, Alex and Carolina discuss the impact advancements in technology is having on the construction industry.
Highlights from Part 3:
- Construction investment has been lagging behind the overall economy and technology is influencing those changes.
- For example, brick & mortar retail stores are being supplanted by online shopping.
- While technology may eliminate or decrease demand for certain types of construction, it will also pave the way for new types i.e. solar power plants vs. coal burning power plants
- Building Product Manufactures need to spend equal time focusing on construction forecasts and emerging technologies to stay ahead
- Technology is also helping to create better construction materials with things like self-healing concrete and self-monitoring building systems
Full Transcript of Part 3:
Carolina: Alex, first of all, thank you so much for coming here and spending the time with us. It's really an honor to interview you with our partnership with ConstructConnect. We've been working together for several years and it's good to have you here to answer some of my questions.
For those of you that don't know Alex, he is the Chief Economist covering North America for ConstructConnect, as well as CanaData, and he has been providing our industry with economic and forecast data for over 30 years. During our conversation today, we'll talk about the US economy, what we can expect for construction, and also touch upon what is happening in Canada.
So Alex, one of the things you've been wanting to talk about is a possible threat to the construction industry and a change in landscape. Tell us a little bit about how high tech is influencing construction.
Alex: Well thank you for the opportunity to do that because frankly, this is one of the things that I find most interesting, really. I love talking about this because the question has been, people have been struggling with why has construction, why has investment lagged so far behind what's been happening in the economy overall. I don't think it's as complicated as people are making it. I think part of it is that there's just been a huge change in the economy.
One of them is that if you're an owner contemplating building square footage, you have options other than construction. This all began in terms of retail. It began with the bricks and mortar versus putting your money into a web platform. This is something that was talked about 10 years ago. There's hardly anything that you can think about where there isn't a high-tech alternative. Even something as unusual as prisons. You don't need prisons because you just put ankle bracelets on people.
Now, I know that some of what I'm gonna say is gonna sound kind of ridiculous. The changes are happening so fast now. We talked about hotel construction. There's always gonna be hotel construction because people are gonna want to stay in hotels. That's for short term stays but there's this effect called the sharing economy like Airbnb. That's an alternative to building square footage. Concert halls. VR and AR, augmented reality and video sets, 3D video sets. People in small communities can watch what's happening at the New York Met. Banking. Banking has gone to paying your bills over the internet. Brokerages, there's E-Trade.
There's hardly an area that you can talk about. Even medical services you can get analyzed over the internet or there's devices that can monitor your health and send that back to doctor's offices. Post offices and pulp and paper mills. You don't need those the same way because there's instant messaging and emailing. I think that's a big part of it.
There were these greenfield construction activities that were needed before that you have to question whether they're needed now. There's always going to be construction but the nature of that construction is changing. It's really an entirely different world and it's changing incredibly quickly and there's other areas of this that I'd be quite happy to explore as well.
Carolina: Do you have any advice for a building materials company in working through this, in a way, high-tech challenge?
Alex: I certainly do. What I would say is that you used to look at the forecast of construction. I think that's only about 50% of it anymore. It pains me to say that because of course, we sell construction forecasts. But if you're a building product manufacturer. I think you've got to put about 50% of your effort into following the technological changes and what's happening.
All you gotta do is think about something like solar panels. If you're building solar panels of the new residential construction is gonna go ahead with new solar panels on the roof. That just changes everything. There's a huge demand for that. Do you need big generating plants? I mean there's the talk about trying to save the coal industry because coal is used in generating plants. The generating plants, the power plants have been shifting to natural gas. Do you need these big power plants if you've got solar roofs? It's not gonna completely eliminate this kind of construction but it's just a big change.
Driverless cars. If that actually happens...and being my age I'm actually skeptical of this. I was around when cars were first rolled off Henry Ford's assembly line. I'm kidding of course. If we do actually go to driverless cars, what's that gonna mean in terms of signaling systems? If you're building lighting systems and signaling systems, you're gonna have to have some kind of tie-in or hookup with some kind of technology communications firm to put up these new systems.
It’s keeping up with the technology and building materials. The building materials now, they're coming up with ways that they're self-monitoring when they're starting to fail. Some of them, there's even talk about building materials that can heal themselves. So, there's this whole new world that's changing for construction.
Carolina: We need to be able to embrace that because it is something that's happening.
Alex: Yes. And it's incredibly interesting and it presents tremendous opportunities and how neat is that? Really, how neat is that? The way that this is changing.
Carolina: Great. Thank you very much. Alex, it's an honor talking to you and I really, really appreciate your time. I hope all of you have enjoyed it as well.