Construction is often viewed as a laggard among U.S. industries in terms of pace of change and adaptation to new processes and technologies. For instance, drive by the typical road construction project and one may view a jobsite that looks virtually identical to its counterpart 5 or more decades ago. There is often one person working a heavy piece of equipment, digging a hole where people once drove. Others are standing around. Undoubtedly, they play a role, but it is not clear what that role would be. Finally, there is an individual standing with a sign that alternates between “stop” and “slow.” That sums up much of the construction world nicely.

A construction project that suffers cost overruns and schedule delays would be considered par for the course, as opposed to a bogey or double bogey. And such phenomena are not unique to the United States. According to Bent Flyvbjerg and Dan Gardner’s book How Big Things Get Done, based on the performance of 16,000 public and private projects of various types across multiple countries, mean project cost overruns were 238% for nuclear storage, 120% for nuclear power, 75% for hydroelectric dams, 34% for oil and gas, 16% for fossil thermal power, 13% for wind power, and 8% for energy transmission.

Those cost overruns come atop significant known increases in costs sustained in recent years. For instance, according to the producer price index for new industrial building construction, costs rose 40% during the 4-year period spanning from 2019 to 2023.

Thankfully, mechanical insulation has largely managed to defy such patterns. Standing in contrast to much of the construction industry’s dynamic, mechanical insulation represents a cornerstone of innovation as we move through 2024. Though often overlooked, this segment of the economy plays a crucial role in the inner workings and functionality of a wide range of facilities. As has been the case in the past, the industry has often changed and adapted alongside the broader economy, especially with an increasing focus on sustainability and energy optimization, as well as advancement in material sciences.

In the commercial sector in particular, mechanical insulation has emerged as a non negotiable aspect of many projects, including in the large infrastructures of corporate buildings and headquarters, retail complexes, and medical facilities. It is a key player in HVAC systems, themselves a critical element in large and expansive projects. Likewise, in the industrial sphere, from power plants to manufacturing facilities, insulation supplies a technical backbone by maintaining proper temperatures and enhancing workforce safety. With America rebuilding its supply chains, energy generation, and distribution infrastructure, there will be even greater call for reliable thermal management solutions going forward.

The move toward more efficient solutions and innovation has not slowed in recent years. Materials such as aerogels, vacuum-insulated panels, and supercritical foam technologies are setting new benchmarks for thermal efficiency and environmental compatibility. Moreover, these new technologies do more than enhance performance. They can also alleviate and reduce rising concerns regarding construction’s environmental footprint.

The regulatory side of the equation also must be considered. The current landscape is incorporating increasingly stringent building codes and standards, primarily intended to reduce emissions and increase fire safety. These changes, however, are not uniform across the country, varying widely across states. This poses a problem for industry professionals who must navigate the matrix of regulations while also remaining flexible and well informed to retain competitive advantages, including along the dimension of cost.

For engineers, specifiers, designers, and other stakeholders entrenched in the world of mechanical insulation, understanding and adapting to these potential shifts is essential. Those who adapt will prosper. Those who fail to do so will professionally perish. Exploring these challenges and the best way to deal with them will provide all those involved with the greatest chance to succeed not only in 2024 but for years to come. The balance of this article considers three megatrends that could help separate the winners from the others.

Artificial Intelligence: A New Frontier that No One Fully Understands

What was once the buzz phrase of 2023 has now become a catalyst for the economy, including for the mechanical insulation industry. Artificial intelligence (AI) continues to revolutionize the way the construction industry approaches insulation, from design to implementation and maintenance.

In the category of design, AI’s biggest impact will be revolutionary. Tapping into its ability to deploy sophisticated algorithms and programs, AI has the potential to simulate and analyze various insulation materials and configurations. Moreover, it can do this with extreme speed and high levels of precision.

The mechanical insulation industry has existing tools to predict thermal performance, optimize along the dimension of insulation thickness, and make better decisions regarding what materials to use but, combined with AI, these tools become exponentially more powerful. Its genius lies in its capacity to account for numerous interacting variables at once, including climate conditions, material response, and energy utilization. Remarkably, AI not only can account for environmental performance in its computations, but also simultaneously for financial performance. Anyone working in mechanical insulation who does not benefit from such analytical prowess will suffer massive competitive disadvantage. They will also be supplying their customers with sub-optimal outcomes.

AI can even extend the operational life of current and future insulation systems. By turning data into foresight, AI can determine when maintenance is required.  However, this may require a paradigm shift in the type of data and means of data collection. The data needed for predictive maintenance may not exist in a form readily available for AI. For example, testing and models are currently being performed to predict timeframes for the development of corrosion under insulation (CUI), however that data is not widely available yet. When this data is collected for AI implementation, and done properly, this will avert long downtimes and extend the overall life spans of systems, saving property owners massively. In the context of industrial facilities, AI can also detect irregularities in performance, potentially spotting issues with machinery and equipment before they escalate into costly or deadly problems. This proactive approach ensures that both insulation and machinery operate at high levels of efficiency, maximizing energy conservation while minimizing costs.

For commercial projects, AI-integrated insulation systems are part of a broader system. They communicate with building management’s systems, creating harmonic efficiency. AI algorithms can analyze various data from within a building and dynamically adjust “active” insulation in building envelope insulation properties when and as needed. This helps ensure the comfort of tenants while also optimizing energy usage. What was once science fiction has become our new reality, but it has also become a competitive battleground that will segregate the leading edge from the also-rans.

One of the principal objectives of businesspeople is to learn from each experience to improve performance. AI is not only able to customize and respond, it learns from the past and integrates project-based learning neatly into the future. In other words, those who utilize AI in their project design and delivery are also positioned to navigate learning curves more quickly, staying ahead of the competition while positioning younger people to master their trades with greater rapidity.

Nothing worthwhile is easy. AI is complicated. Learning and implementing these new AI driven systems will not be simple. It will test both managerial and front-line workers. AI is more than a new technology; it is a paradigm shift, set to fundamentally alter how the mechanical insulation industry operates. Nonetheless, it is at least theoretically possible for one to become so enamored by the capabilities of AI that one forgets the contributions of other technological advances, including with respect to material and mechanical science.

Cutting-Edge Materials + Smart Technologies = A Radically Different Future Available Now

Similarly, the emergence of new materials in the insulation manufacturing process is helping project managers cut costs and emerge as more eco-friendly. For instance, aerogels provide a high level of thermal resistance while remaining relatively lightweight. Nicknamed “frozen smoke” for its ethereal appearance, aerogels have been used by NASA to catch tiny particles left behind by comets. Other bio-based compounds are also finding a niche in the insulation market, providing alternatives to traditional materials. As these materials become more commonplace, the need for fossil fuel–based insulation will decrease, further reducing the industry’s carbon footprint in the process. As another example of innovation, vacuum-insulated panels supply low thermal conductivity, offering R-values in the range of R-30 per inch of thickness.

Unlike AI, which embraces an active role in insulation systems, smart technologies aid building managers by supplying real-time monitoring and energy tracking. Sensors installed within the building relay metrics such as temperature, humidity, and energy usage. Proactive maintenance can keep energy costs under control, provide a comfortable climate for building tenants, and prevent small problems from escalating into larger (and more expensive) problems.

Analytically, separating smart technologies from AI is an artifice. It makes as much sense as trying to discuss Taylor Swift without including Travis Kelce. Among other things, AI will supply insights into optimal material use, technological mix, and predicted environmental and economic outcomes.

Regulatory Overload

If change is good, then those impacted by regulatory shifts must be loving life. Mechanical insulation stakeholders find themselves in a precarious position in 2024, facing an increasingly complex and intricate regulatory framework that seeks to move the industry rapidly toward greater environmental sustainability. Coming years will undoubtedly feature a prominent shift in the way the construction industry operates for several reasons, including attempts to at least partially offset the massive delivery cost increases of the past several years, as well as to satisfy environmental imperatives.

In the past, the primary focus on environmental regulation was on energy efficiency. Today’s regulations are more all-encompassing, embracing a more holistic approach to sustainability. Aspects of the production process that were once largely ignored by regulators are now at the heart of the conversation, including the types of materials used and from where they are sourced.

Many regulators have embraced the concept of a “circular economy,” a theme more likely to impact mechanical insulation stakeholders. According to the Ellen MacArthur Foundation, a circular economy is based on three principles: 1) eliminate waste and pollution, 2) circulate products and materials (at their highest value), and 3) regenerate nature. The idea behind this is to move away from the “take-make-dispose” model that has been a construction industry hallmark. Rather than take-make-dispose, materials would be continuously reused and recycled from one project to the next. The objectives are obvious—use less material, produce less waste, and deploy less energy. But while the principle is straightforward, the practice is not.

For those bidding on projects, emphasizing circular economy principles may be a pathway to securing victory without sacrificing pricing power and margins. Guess what? AI may be able to help determine how practice and principle can find their way into alignment.

From Where Will Demand for Industry Services Emerge?

To this point, this article has focused on the supply side of the mechanical insulation industry equation, but there is also market demand to consider. As usual, market demand for industry services and capital goods will depend on several factors beyond the reach of the construction industry itself.

In America, the mechanical insulation market is observing expanding demand from a handful of segments that are especially well positioned to grow in the future. Among these are manufacturing, data centers, and health care. Supply chains are coming back to the United States. While that has driven up costs and rendered America’s shortages of skilled tradespeople even more apparent, there is little doubt that global manufacturers will continue to pour more capital into the United States in order to simplify logistics, take advantage of ongoing infrastructure improvements, better protect intellectual property, limit the intrusion of foreign governments, and avail themselves of massive public subsidies. Among the manufacturing segments generating the most construction activity are chip production facilities, and battery and electric vehicle plants.

Data centers will also be a source of massive demand for mechanical insulation solutions, in part because of (what else?) AI. Data centers produce an abundance of heat that must be managed. For its part, health care also stands to be a prime driver of activity. Health-care facilities must be temperature precise and stable. Demand for them will continue to expand as America continues to age, driving up health-care utilization in the process.

Beyond the United States, demand in the global insulation market also stands to be elevated. Many developing countries will require mechanical insulation to support the transformational changes taking place within their economies; including India, with its rapid industrialization and terrible air quality. Regulatory demands are likely to play an outsized role in Europe, where governments are racing both toward net zero and to eliminate dependence on fossil fuels, including those supplied by the likes of Russia and Iran.

Looking Ahead

The world of mechanical insulation is undergoing a revolution. There is no way to avoid it. Between AI, materials science, environmental regulations, mechanical innovations, and a desire to massively drive down costs, those who stand still will falter, while those who change with the times will achieve success. That is how life works.

Thankfully, change—at least occasionally—comes with benefits. Innovations in mechanical insulation stand to make the world greener, cleaner, and more affordable. Under those circumstances, everyone wins.