ABC 101 Blog Series: A New Take on New Construction

August 15, 2019

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Welcome to the Advanced Building Construction Blog Series

This is the first article in a new web series on one of the Building Technologies Office’s new initiatives: Advanced Building Construction. This initiative seeks to address several long-standing challenges that have kept new and existing buildings from unlocking their full potential to reduce their energy consumption. This article focuses on opportunities in new construction, while subsequent articles will discuss how new technologies and approaches show promise in scaling and improving the efficacy of building energy retrofits, potential workforce needs in response to greater automation and reliance on off-site manufacturing, and next-generation building materials among other related topics. 

Why Novel Techniques for Constructing New Buildings Are Needed

The way we construct new homes and buildings has remained largely the same over the past one hundred years, as shown in the side-by-side images below. Because of this, the construction industry is ripe with opportunity to adopt the kinds of advanced technologies and practices that have propelled other industries forward. Innovative technologies, materials and practices can improve the industry’s productivity and competitiveness while tackling other building-related challenges simultaneously, like energy efficiency, grid reliability, cybersecurity, and resiliency.

House framing from 1877 in Nebraska.
Framing for a present day home nearly 150 years later.

House framing from 1877 in Nebraska. Framing for a present-day home nearly 150 years later.

Sources: On the left, photo of wood frame house on an Omaha Reservation in Nebraska by William Henry Jackson, The National Archives, Smithsonian Institution. On the right, Wall Street Journal, October 13, 2015.

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Line graph: Labor-productivity growth in construction.
Source: McKinsey Global Institute analysis (U.S. Bureau of Economic Affairs; U.S. Bureau of Labor Statistics; national statistical agencies of Turkey, Malaysia, and Singapore).

The construction industry is confronting critical challenges, including lagging productivity, undersupply of quality trades, insufficient pace of innovation, and affordable housing. Let's look at each of these challenges individually:

Lagging Productivity

Construction labor-productivity growth, based on the growth of value added per hours worked, continues to lag behind all other non-farm industries by as much as 300%, as reported by the U.S. Bureau of Labor and Statistics. Lagging construction productivity costs the North American economy $580 billion each year and $1.63 trillion globally.1

Bar graph: Builders reporting shortages of labor.
Source: Survey for the National Association of Home Builders/Wells Fargo Housing Market, July 2018.

Undersupply of Quality Trades

Across the country, the construction industry is confronting a decline in the availability of skilled building trades, including fewer practitioners and reduced training opportunities as well as increasing costs. According to a recent survey conducted by the Associated General Contractors of America, 78% of respondents are having a hard time filling positions, while 65% expect that trend to continue.2  The National Association of Home Builders found builders are struggling to find tradespeople for plumbing, drywall, concrete, and framing.

Table: The construction industry is among the least digitized.
Table from McKinsey’s Reinventing Construction: A Route to Higher Productivity.

Insufficient Pace of Innovation

The housing industry invests only 0.4% of revenue into research and development when the average rate for other, non-farm industries is nearly 4%.3  In addition, the construction industry is highly fragmented, with more than 50,000 individual companies, many of which lack the resources and core competencies to sustain meaningful investments in research and development. The low R&D investment, along with the fragmented business structure means that construction is a month the least computerized industries in the United States. Couple power or “digitization,” helps reduce the gap between traditional buildings and high-performance buildings with smarter, energy-efficient technologies.

Line graph: Housing costs vs. wages in 2018 dollars.
Source: USA Housing Costs vs Wages in 2018 Dollars from 1964-2016. Data compiled from the Federal Reserve Bank of St. Louis and the U.S. Social Security Administration’s National Average Wage Index.

Affordable Housing

The National Association of Home Builders/Wells Fargo Housing Opportunity Index shows what affordable new and existing home prices are for the typical American family, and it predicts this figure will likely fall below 50% in 2019.4 The real estate industry recommends a median cost-of-home to median-household-income ratio of 2.6,5 yet the national ratio is above 7, as shown in the chart here.6

Catalyzing Innovations in Constructing New Buildings

The challenges outlined above indicate that the construction industry is ripe for rapid advancement, and recent developments suggest a new wave of innovation on the horizon. The industry has demonstrated a growing market for the use of new structural materials such as cross-laminated timber and structurally insulated panels, an increasing market share of offsite prefabricated building units, and the incorporation of robotics into traditional construction processes.

The U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) is seeking to catalyze innovations and advancements in how we think about and construct new buildings. With the recent release of EERE's Building Technologies Office's (BTO) Advanced Building Construction funding opportunity announcement and the launch of the Advanced Building Construction Initiative, BTO is funding research into new strategies and technologies for the construction of high performing buildings to realize an affordable, reliable, and resilient energy future.

What are some of the innovative construction strategies that can improve energy efficiency? Below is a short, non-comprehensive list of just some of the innovations on EERE's radar:

  • New Building Materials
    Building with newly developed materials, such as recycled materials or existing materials not traditionally used in construction, creates potential to decrease the overall energy used to construct buildings while simultaneously decreasing operational energy expenditures. New materials also pave the way for buildings to host and act as distributed energy resources, incorporating technologies such as solar panel facades, thermal storage, and those with self-healing capabilities.
    Lawrence Berkeley National Laboratory is exploring the development of new materials to leverage the building envelope’s energy storage potential. Oak Ridge National Laboratory is developing self-healing film for specific types of building insulation. Industry partner InventWood, LLC, is reimagining insulation by using natural wood material that is cost effective yet mechanically strong, providing load-bearing function.
  • 3D Printing and New Methods of Fabrication
    Additive and subtractive manufacturing tools, such as 3D printers and computer numerical control machines, have improved dramatically over the last few decades, opening doors for building structures and components that were previously impossible or incredibly time consuming to create. There are opportunities to apply these fabrication techniques to the construction industry to improve the speed and quality of building components. We may even use 3D printing to construct entire buildings and neighborhood blocks in the not so distant future.
    Oak Ridge National Laboratory has capitalized on these innovations by 3D printing precast concrete molds for a New York City redevelopment project and a fully functioning house.
  • Offsite Manufacturing
    Factory and offsite construction methods have the potential to produce higher quality and faster construction timelines, improve productivity, increase the integration of various technologies, and provide workers with controlled working conditions at lower costs. The increased precision and scalability that controlled factory settings provide can help ensure greater energy performance with the integration of tighter envelopes, better installed windows, smart controls, and improved HVAC system designs.
    The National Renewable Energy Laboratory is partnering with modular construction companies to explore opportunities for the integration of energy efficiency and distributed energy resource measures into factory processes.
  • Robotics
    Advancements in robotics capabilities and controls allow for human workers to reach places or perform activities that were previously too difficult or even impossible. For example, robots can safely enter small spaces and cavities, such as ductwork, to perform air sealing or other efficiency activities. Robots can be used to improve productivity and ensure consistency when installing energy-efficiency measures.
  • Digitization
    Complex software and faster computing power, combined with artificial intelligence and machine learning, allow for the rapid intake and processing of information. For energy-efficient construction, machines can intake visual images, energy analysis and modeling, and other inputs to directly translate data into the fabrication of building components including walls, roofs, or interior design features. This process, also known colloquially as "art-to-part," can help bridge the gap between a traditional building and a high-performance building with smarter, energy-efficient components.

Construction choices and activities significantly impact the near- and long-term operational energy performance of buildings. The incorporation of recent advancements in manufacturing, fabrication, materials, and logistics hold the potential to drastically improve the efficiency and comfort of our building stock. As the construction industry adopts technology advancements from other sectors, it will be critical to incorporate energy efficiency and grid flexibility into new advanced building strategies. While we may start constructing buildings faster and cheaper, we can also build them smarter, healthier, more responsive, and with a smaller environmental footprint.

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1 Barbosa, Filipe et al., 2017. “Reinventing Construction: A Route to Higher Productivity.” McKinsey and Company Global Institute. Accessed 24 June 2019. Available: https://mck.co/2IZbEYb.

2 The Associated General Contractors of America, 2019. “The 2019 Construction Hiring and Business Outlook.” Accessed 24 June 2019. Available: https://bit.ly/2FCflDj.

3 Barbosa, Filipe et al., 2017.

4 Richardson, Brenda. “America’s Housing Affordability Crisis Only Getting Worse.” Forbes, 31 January 2019. Accessed 24 June 2019. Available: https://bit.ly/2X1fyK8.

5 Florida, Richard. “Where the House-Price-to-Income Ratio is Most Out of Whack.” CityLab, 29 May 2018. Accessed 24 June 2019. Available: https://bit.ly/2L4crXu.

6 “USA Housing Costs vs Wages in 2018 Dollars from 1964-2016.” Data compiled from the Federal Reserve Bank of St. Louis (https://fred.stlouisfed.org/series/ASPUS) and the U.S. Social Security Administration’s National Average Wage Index (https://www.ssa.gov/oact/cola/AWI.html). Accessed 24 June 2019. Available: https://bit.ly/2Nahrjk.