The passage of a huge infrastructure bill will bring good news to the construction industry in the next few years, but this is not the only thing that will help push the industry higher. According to ForConstructionPros.com, technology is becoming more and more important in the construction industry, especially in the context of supply chain issues and labor shortages in small and medium-sized companies.
Although the market and construction demand are slowly recovering, the supply chain problems caused by the pandemic and the massive shortage of skilled workers have put many small and medium-sized companies into trouble. Facts have proved that technology is a bridge across difficulties, achieving a certain degree of automation and streamlining, thereby improving efficiency and helping to speed up the design process of 3D tools such as virtual reality.
Construction companies, especially small and medium-sized construction companies, rely heavily on technology to simplify the customer experience and help find and recruit the skilled labor required for the job. Automation improvements provide customers with a smooth, automated billing experience. They also help simplify the sequence of work routes, electronic points of sale, and more.
Verizon recently conducted a small business survey and found that 63% of small and medium-sized companies reported that they want to digitize this year, an increase of 10% from last year, and the number of purchases and integrations of large-capacity Internet as labor compensation has increased significantly. This is an important change because Associated Builders and Contractors has set the labor recruitment demand this year at 430,000 and will increase it by more than 1 million in the next two years.
Technology provides a lot of potential and prospects for the future development of the construction industry, including 3D applications and combined with artificial intelligence to optimize the labor required at various points of the project, thereby reducing costs. Technological innovation means that small and medium-sized companies can withstand the changes brought about by the pandemic and rebound at a faster rate than other situations, and the construction industry is no exception.
Global Construction Perspective and Oxford Economics reports estimate that by 2030, the global market value of the construction industry will exceed US$8 trillion. For investors who want to gain the growth potential of the construction industry, Invesco Dynamic Building & Construction ETF (PKB) is a good choice.
PKB uses a full replication strategy to seek to track the dynamic building and construction Intellidex index, which is compiled and maintained by ICE Data Indices. The index includes companies that mainly provide construction and related engineering services for the construction or renovation of residential properties, industrial or commercial buildings, and large-scale infrastructure projects. These may include highways, bridges, tunnels, dams, power lines, and airports.
In addition, these companies can also be manufacturers of building materials used in general construction and home improvement; manufacturers of specialized machinery for construction; companies engaged in maintenance, installation or repair work; and land developers.
The current market value allocation includes 19.99% weighting for large-cap hybrid securities, 25.70% for mid-cap hybrid securities, and 24.69% for small-cap hybrid securities, with a smaller allocation of growth or value among all three caps.
PKB has an expense ratio of 0.50% and currently holds 31 shares.
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