The Expert Podcast

A couple of very scary articles for the construction industry came out today. The first is on the front cover of Forbes Magazine, a major business magazine. It’s about a company in Boston that is creating a robot army to do construction for his building company. The company is called Suffk Saoke (F-S-U-F-O-L-L-K), and this guy is a billionaire. He's creating construction workers that are all robots powered by AI. He’s going to start with commercial buildings but plans to eventually move to residential. The article is very long, and there’s a video as well, which I'll put a link below. It’s a very viable idea. This may not seem like something that could be done with robots, but his technology and his company's strategy and philosophy suggest that eliminating the cost of labor for construction is worth the hundreds of millions of dollars investment. It may take a few years, but he's done bigger projects before, so it’s happening.

What does that mean for construction workers? Well, first of all, it's already hard to find quality tradespeople anyway, but those that are in the trades make a lot of money. You can make $40, $50, $60, $70—some have even seen $100 an hour for skilled tradespeople. All that may go away. If you’re a smaller construction company or contractor, you may not be able to invest in this kind of technology. So, larger companies may end up taking over everything for building. If you're building even a set of five or six track homes, you may call up this company, and they’ll ship out an 18-wheeler trailer with a bunch of robots and materials—maybe one or two people on site to monitor, and that's it. Construction work as a profession—could it be over? Is that extreme, or is it an exaggeration? Is that overly cautious? I don’t know. I’m sure you have an opinion about it—let us know in the comments if you think this is a risk in the long run or a threat to the industry.

Another troubling issue for construction has to do with building codes and building costs, which are starting to threaten quality construction. In a perfect example of government overreach, the state of Michigan is coming out with new building codes for home builders. To make a long story short, these codes are going to be a lot stricter and a lot more difficult to meet, and only higher-end builders on expensive homes will be able to do it. According to somebody they interviewed, prices will skyrocket. Why is that? Well, if you now have to meet these codes, it could cost an extra $40,000 or $50,000 just to build the house according to these new codes. Now, you have to mark up the house not just by that extra $40,000 or $50,000, but also by your return on investment. So, it may raise the prices of homes by $100,000 or $200,000 for any house. If you have a house that could have sold for $450,000 or $500,000, now you’ll have to sell it for $500,000 or $600,000 just to break even. So, between building codes pressuring one side of the market, robots pressuring another side of the market, and even the economy holding back people’s budgets, buying a home may only be for the rich going forward. Doing construction may no longer be a career path for people.