US Construction Spending Is Down….Will Demolition Spending Go Up?
Looking at the construction industry headlines recently, I often wonder when the US economy, barely growing by most main indicators, will begin to boost the anemic construction industry.Yes, there are some bright spots (Hotel Construction Sees a Modest Comeback – WSJ) , but the overall construction spending is down (report).
So, where can a construction outfit go to grow, in such stagnant conditions? How about Demolition? But not just any demolition… specialized demolition. Demo that’s dangerous and hazardous! I’m talking about nuclear power plant demolition.
The past 30 years have been difficult for pro-Nuclear power proponents. In that time, nuclear power has not been a favorite source of low-cost energy due to highly visible failures at Three Mile Island and Chernobyl for example. So, we’ve seen a decline in nuclear power plant construction. And today, other sources of energy like natural gas cost much less, further hindering the justification and demand for nuclear energy.
So, it could be safe to predict there will be less and less projects for building nuclear power plants in the coming years. And, if you take it a step further, it might be logical for a contractor specializing in demolition to look at the end-of-life scenario for these existing plants and see potential opportunity.There are currently about 100 nuclear power plants in operation today in the US. Recently, four plants have been scheduled to be shut down (Nuclear Plants, Old and Uncompetitive, Are Closing Earlier Than Expected – NYT). The average age of the operating plants is about 32 years old. So, many of these plants are nearing the end of their productive life-span. They’ll need to be demolished eventually. Who’s going to bid on that? Who’s going to win the bid? Will it be profitable?
Technology can be a big difference-maker in how can a contractor takes advantage of a potential trend like this. How can technology play a roll in transforming a construction and/or demolition contractors business to take that business? Technology that supports and optimizes the whole business lifecycle, from the bidding and project delivery to tight financial management, will enable a faster more adaptive firm to grow (maybe when the market is flat and growth is a challenge).