As we wrap up 2016, businesses are developing strategies designed to embrace the opportunities the New Year will bring. For developers, contractors, and other construction industry professionals, signs point toward continued growth opportunities in 2017. This is good news for insurance agents as growth means an ongoing need for builders risk coverage.
According to the semi-annual Construction Consensus released by the American Institute of Architects, non-residential construction market growth in 2017 is expected to be moderate, although healthy growth is still anticipated. It is estimated that demand will continue to be strong for office space, commercial buildings, hotels, and amusement and recreation businesses. Because of the aging population in the U.S., another area expected to see continued strong growth is institutional medical facilities, including hospitals, clinics and residential care centers.
Some of the trends expected to fuel this continued growth include ongoing demand for energy-efficient construction, including wind and solar power, water conservation, motion-activated and automated controls. Innovative building materials are also expected to help with this growth trend, including new glass/glazing technology, and new building composite materials.
In recent years, many consumers have shied away from synthetic building materials in an attempt to lessen their carbon footprints. This has led to a growing demand for the use of natural materials like hard woods, clays and natural stones like marble and granite, for both residential and commercial construction projects. This trend is expected to continue, as more eco-conscious millennials become increasingly involved in the design and building of their homes and businesses.
When it comes to fixtures, designers are seeing more interest in burnished metals, black steel and brass instead of copper and rose gold, and that trend is expected to carry into 2017 and beyond.
The look of homes continues to evolve. U.S. Census data reports that although the size of new homes has continued to climb to 21 percent within the past 15 years, the size of outdoor space has been on the decrease. In fact, the average lot size of a new home sold in this country is about 400 square feet smaller today than it was in 2011. Contractors are building projects that are taller and more expansive, on smaller lots. This concept, which architects and builders refer to as “bulk and massing,” is another trend ensuring continued growth in construction, though perhaps not landscaping.
Other trends on the rise seem to take “smart” technology and intuitive design into account. From the energy efficiency of daylight harvesting, which reduces unnecessary artificial lighting by taking advantage of ambient natural light, to the practical application of multi-purpose furniture and room dividers, and even to the forward-looking integration of smart technology to automate everything possible in a household, 2017 is looking to be a year of practical innovation.
These changes are important for builders risk agents and their clients to understand, as the cost and type of materials used in construction projects will directly impact the total value of the structure, which is one key factor when determining insurance premiums. Should those materials need change to suit the evolving preferences of the homeowner, a change order endorsement would allow needed flexibility without adding to a gap in coverage.
When you meet with your construction industry clients, remind them that you offer builders risk insurance to provide financial protection during the course of construction for materials both on- and off the worksite, from natural perils, theft and more. To learn more, download our free guide From Groundbreaking to Remodeling: Builders Risk 101 Guide today.
This is intended as a general description of certain types of insurance and services available to qualified customers. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.