Construction cranes are so popular out there that they've become a punchline. A wiseacre living in the Pacific Northwest will test your knowledge of trivia with the question "what's the city bird of Seattle?"
If the response is a shrug, or an "I don't know, what is the city bird of Seattle?" the answer will be, "the crane."
Rider Levett Bucknall, a global construction management consultancy that's been around since 1785, counts cranes, and each year RLB publishes its Crane Index, a roll-up of its job site survey work. The 2018 RLB index reflected "peak crane," with two out of every five construction cranes in action working on residential projects.
Companies with names like Maxim, ALL Erection & Crane, Bigge, Lampson, Mammoet, TNT, Barnhart, Buckner, W.O. Grubb, and Deep South show up in the top 10 of American Crane & Transport's ACT 100 index of top crane-owning--crawlers, boom trucks and other mobile units, etc.--companies, which notes:
Employee counts are back on the rise with the ACT100 employing 31,907 workers as compared to 29,287 in 2017. This was a healthy gain as compared to employee losses last year. Still, the ACT100 has not reached the peak we saw in 2015 of 37,040 workers.
Crane operators, like many roles and functional positions in construction, are in demand. Bureau of Labor Statistics data from 2017 suggest that, actually 43,000-plus make a living as construction crane operators, with a median annual wage of $55,690. Meanwhile, digital job search engine Payscale notes:
People in this role can earn an average of $24.42 per hour nationwide. Final cash compensation to Crane Operators varies from around $35K to approximately $97K; choice pay grades include potential for bonuses and profit sharing as high as $17K and $6K, respectively. This group's pay is mainly influenced by geographic location, followed by the company and experience level. The majority of Crane Operators claim high levels of job satisfaction.
There, you know all I do about construction cranes. Still, why all this talk of cranes? Cranes go with high rises, right, not single-family homes.
Welcome to the eve of disruption. Here's this week's announcement of our Hive 2018 event, in Austin, Nov. 28-29, entitled Reignite the Dream: Affordability for Profit and Purpose."
What better symbol of the sea change to come in home construction productivity than the almost regal moving metal workhorse, towering over a site, turning hours, days, and weeks of --at best--roughly connected workflows into minutes of precision, right-the-first-time results?
We're going to go out on a limb here--judging from the enormous traction factory offsite building technologies, systems, and solutions have gotten from capital investors and, more recently, home builders--and suggest that "peak crane" is only now about to trace a new upward trajectory. Single-family, high-volume builders as we know them today will be hauling more and more fully-integrated pre-constructed structures and systems to job sites, and craning them into place with Lego-like order, accuracy, and speed.
All this speaks to a productivity breakthrough--one that home builders and residential real estate developers and investors never might need to have imagined if labor were always cheap, if material costs remained predictable, and if real estate price appreciation could cover up the sins, inefficiencies, and waste in an architecture, engineering, and construction vicious circle that seemed to provide no alternative.
A productivity breakthrough--especially when the housing recovery is showing increasing signs of fatigue and vulnerability to weakness based on a disconnect between the cost-to-develop and average household working wages--is, few can deny, not an option.
A productivity breakthrough assumes taking all the same raw materials of housing development--people, money, dirt, materials, time, and applied talent--and, once-and-for-all, getting rid of the value sucks in the process.
A productivity breakthrough takes a fresh, primal look at value creation, just the way Skanska and IKEA cleared the table and started their BoKlok enterprise--a highly advanced, robotic, home design and construction facility based in Gullringen, Sweden, now producing 1,200 affordably-priced homes a year--based on who they wanted to serve as they model a sustainably profitable new business. They put it this way:
BoKlok is not like other housing developers, and that makes us really proud. The idea of our concept is – in short – that our customers should get as much house as possible for as little money as possible.
When we started planning BoKlok we decided to look at some important facts first, such as: Whom are we building for? What are they able and willing to pay? And how do they want to live? The answer was: We should imagine our buyer being a single pre-school teacher with one kid, and a small wallet. This family would prefer something bright and roomy, near public transportation and nature.
One could say it sounds contradicting – such good living at such a good price – but we chose to take it on as an inspiring challenge. We decided: Our monthly cost of living should always be lower than an equivalent flat in the same area.
Who would argue that what American housing, the American economy, and American culture and society needs--now, as much as ever since the middle part of the last century--that kind of dynamism, that promise to the present generation of workers, and their children, and their children's children? Who would argue with the simple premise that a successful, profitable housing enterprise business model should start with a worker--like a teacher--making his or her living wage and having an opportunity access a decent, safe, livable, place to prosper and enjoy well-being?
Who would argue that--even as many of housing's leading enterprises continue to succeed, sustain growth, improve performance, and build futures--housing itself is broken and failing to create a regenerative process to inspire, mobilize, and build new equity in communities across economic segments?
Who would argue that--as much as local policy, building codes, land-use restrictions, anti-housing advocates, materials costs, and cost of money are real, serious, growing impediments in the way of doing business in residential development and construction--the first, best, essential place to look for and find opportunity to meet the need of American workers for more affordable housing options is productivity?
Even, despite hiccups and speed bumps in housing activity of late, in a year where housing starts, permits, and completions are expected to continue to make further gains, as has occurred for more than five years running, recovery has been highly selective, leaving out many entirely.
For more than 35 million households whose total incomes range between 50% and 120% of America’s median income of $60,542, homeownership is moving further out of reach. More than one of every three households pays more than 30% of its income on housing, with 21 million renters among those who are cost-burdened. Fully a quarter of renter households pay half their income or more on housing.
Developers, builders, multifamily property owners and managers, and all of their partners may resign themselves to the fact that their own rising costs make it a poor business prospect to try to serve more and more locales, or they can start breaking the rules that say those costs and their impact will only get worse. They can do battle with municipality after municipality, or they can come to local jurisdictions with solutions that make more sense all around.
This is why our Hive conversation--announced here this week--is important to you. The rules that have locked builders, developers, architects, distributors, manufacturers, investors, and their partners into a vicious-circle of productivity loss need to be broken. They need to be discarded. They will cost too much--in company failures, in lost jobs, in lost profits, in future dynamism, and ultimately, in community dysfunction.
Fix the productivity impasse and housing stakeholders will gain new purchase in dialog with localities on the value of development and housing activity.
Hive is a thought-leadership conference, but its substance, its purpose, and its commitment goes beyond thought and theory of how innovation can break through the barriers to productivity. Action is the heart of Hive. Seeing innovation applied in the real world, and taking a measure of its impact on performance, profitability, and purpose is how the increasingly cohesive network that is Hive works.
You can be a participant. You can change how your firm works, and be part of breakthroughs on the productivity front.
That's why cranes matter, and why they're going to matter more in the months and years ahead.
