AECCafe Industry Predictions for 2023 – Plans4Less

 By Brian Burke, CEO and Founder,  Plans4Less

Brian Burke

The year ahead for residential and commercial construction professionals will be choppy as they navigate higher interest rates, a softer housing market, increasing inflation, jumpy material costs and a firmer recession taking hold.

The ConTech professionals we speak with have a universal desire to streamline workflows, reduce the number of touch-points and limit headcounts on each and every process. They basically want to do ”more done with less”. Re-engineer as many work flows to make them fast, easy, accurate and reliable. Done right the first time. On time and on budget. Control what they can control as the outside environment is fraught with the headwinds we have been discussing.

2023 Plans4Less Outlook:

1.  Federal Reserve Headwinds:
The Fed says, at their 1/4/22 Meeting, that they see rates remaining high for “sometime” – while taking the target range for the benchmark fed funds rate to 4.25%-4.5%, its highest level in 15 years. What does this mean for home buyers? Well, the Fed’s fight against inflation has caused mortgage demand to plunge 13.25% to end 2022 – and that trend should be in place for “some time”. Demand for refinancing, which is a super-sensitive indicator, is down 87% from the same period in 2021 – and that trend, yes, should be in place for “some time”. As the Irish say, “may the wind always be at your back.” In this case, the Fed has made the wind go squarely in the face of the construction market for 2023.

2. Housing Market Weakening Quickly:
If you waited a year until now to jump into the housing market – OUCH. Your financing costs have doubled. You will face an average contract interest rate on a 30-year fixed rate mortgage of 6.58% that is up from 3.33% at the end of 2021. These numbers have detoured would be home buyers from entering the market and lead to a weakening housing market in general. Inventory is building, sellers are increasingly using buyer incentives according to Redfin. With the Fed holding steady against inflation the housing market inventory will only build, seller pressures will increase and the pipeline stops at the builders front door – Pun Intended.

3. Construction Jobs Remain Open:
This is a pesky one as the general labor market has had a “We are Hiring” sign out for most of 2022. US job openings in November were stronger than expected coming in at10.5 million. This problem is not going away in the near term as the Boomers retire and Gen Z and Gen Y start to fill the construction jobs pipeline via trade school or through a4-year curriculum. With the headwinds from the Fed and a stalling housing market, these ubiquitous construction job ads show that the industry is having trouble just treading water. This will not change in 2023.

4. Commercial Office Spaces = Recession?
Recent Layoffs by some key employers like JP Morgan, Amazon, Salesforce, Cisco and Goldman Sachs mean we are either dipping our toes into a Recession or we have totally embraced this new Tik Tok trend and have fully submerged ourselves in the “ice bath” of a Recession. It sure feels like the latter.
The name of the game is less friction. How can the residential and commercial builders conduct their same fundamental process, with less friction in their workflows, making more alert and intelligent bids for instance. We are right in the middle of that, making the process of ordering and shipping blueprints anywhere in the U.S., even to multiple offices, job sites or the home, Fast, Easy, Accurate & Reliable. Reduce pain points, smarter bidding, more potential revenue. On time and on budget. No cost overruns, limit rework and no project delays.

5. Black Swan = China’s New Covid Strain hits US Shores
I put a mask on for this first time in a year the other day and boy did it feel strange. Even stranger is the feeling in my stomach when I read about the new level of Covid roiling China and the restrictions they have put in place. Forcing our State Department, the other day to place travel restrictions again on incoming travelers from China. As Yogi Berra said, “Deja vu all over again!”

Some Solutions from @Plans4Less to address these Market Headwinds With some friendly pressure and a lot of feedback from our nationwide customer base of Owners, GCs, Subs, Architects and Engineers, our team at Plans4Less was tasked with creating a set products that would make our users lives easier, more efficient, less painful. With the ability to drive incremental potential revenue.

To reduce shipping costs we came up with Plans4LessPRIME. We deliver large format blueprints anywhere in the U.S., to the home, to the office or to the job site. Our more active users order plans 2 to 3 times per month and the sets can average 500 pages each so you can imagine the shipping costs. Our Plans4LessPRIME service allows our construction users to control, reduce and then potentially refund (and then some) a fixed cost each year. The cost of the service is only $95 for a 12 month membership. The customer then receives the benefit of unlimited Free Nationwide UPS Ground Shipping on all blueprint orders for one year.

To increase workflows and reduce the friction within the enterprise-wide blueprint ordering and shipping process for larger GCs and subs – especially those with multiple-offices within a state or multi-state locations – we came up with Plans4LessENTERPRISE. Lets use a large general contractor as an example. If they purchased our Plans4LessENTERPRISE – which costs $495 per business unit – then their office would receive all of the following benefits: a Free membership to our PRIMEservice (Free Nationwide UPS Ground Shipping, reduces a fixed cost), Color plans printed at our low B&W rate (reduces a fixed cost), Customized Ordering Platform for Desktop & Mobile (reduces friction, pain points & increases workflow), and OpenNet 30 days terms account (centralized billing, reduces pain point). As a use case general contractors with multiple offices is we could ship plans to each location.

The majority of our customers use one or more of the large ConTech software platforms like Procore, Smartbid, Autodesk BIM360 & Plangrid. To meet our customers “wherethey are” we have embedded our Plans4LessAPP inside Procore, BIM360 and PlanGrid. Plans4Less is also the default printer option within Smartbid. The user saves time and worry as they can now order plans without leaving the ConTech platform, like Procore for example, that they are working in. Time is money, less clicks reduces chances of error.

Remember how I started this Summary section as to how our construction customers are going to look to compete in the 2023 Construction Industry environment we are forecasting: “The ConTech professionals we speak to….Make as many work flows fast, easy, accurate and reliable. Done right the first time. On time and on budget.”

About Author:

Brian Burke is the CEO, Founder and President of Burke Reprographics, Plans4Less. Established in 2015, Plans4Less is PaperTech and ConTech company, leveraging both technology and their national network of reprographic partners to provide printing service to the construction industry.
Mr. Burke has been involved in the commercial construction technology and reprographics business for over 25 years. He has created and run two previous companies, Universal Copy and Buck A Plan. He began his career at SuperiorBlueprint, and then moved on to become the top Sales Manager at Space Age Copy.

Category: Industry Predictions

This entry was posted on Monday, January 23rd, 2023 at 10:58 am. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.