BUILDING CODE COMPLIANCE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Building Code Compliance Market size is expected to reach US$ 14.73 billion by 2030, from US$ 8.16 billion in 2023, at a CAGR of 8.8% during the forecast period.

Building code compliance refers to the process of ensuring that the design, construction, and operation of buildings and structures adhere to the codes and standards set by governmental agencies. Compliance is critical for ensuring the safety, sustainability, accessibility, and energy efficiency of buildings. The market is driven by increasing construction activities globally, government regulations mandating compliance, and focus on improving building performance.

The Building Code Compliance Market is segmented by service type, end-user, region and sourcing type. By service type, the market is segmented into testing & inspection, certification, project management, consulting, and others. The testing & inspection segment accounted for the largest share in 2022. Testing and inspection services are crucial for verifying code compliance during various stages of construction. The demand for testing and inspection is increasing due to stringent regulations and building owners prioritizing safety and performance.

Building Code Compliance Market Regional Insights:

• North America is the largest market for building code compliance, accounting for over 40% of the global market share in 2022. The region is home to some of the leading players in the market, such as IBM, Oracle, and SAP SE. The market growth in North America is attributed to the stringent building codes in the region and the increasing adoption of digital technologies to improve compliance.
• Europe is the second-largest market for building code compliance, accounting for over 30% of the global market share in 2022. The market growth in Europe is attributed to the growing demand for sustainable buildings and the increasing complexity of building codes in the region.
• Asia Pacific is the fastest-growing market for building code compliance, with a CAGR of over 14.2% during the forecast period. The market growth in Asia Pacific is attributed to the rapid urbanization and the growing construction industry in the region.

Figure 1. Global Building Code Compliance Market Share (%), By Region, 2023

Building Code Compliance Market Drivers:

• Government Regulations and Stringent Building Codes: Government regulations and stringent building codes are major drivers for the building code compliance market. Governments worldwide are implementing and expanding building codes to ensure safety, sustainability, accessibility and resilience of buildings. For instance, the International Code Council has adopted the 2021 building codes in the U.S., introducing new energy efficiency requirements. Such regulations are creating strong demand for compliance services. Moreover, authorities are conducting rigorous inspections and levying harsh penalties for non-compliance, compelling stakeholders to actively seek compliance services.
• Increasing Investments in Construction Projects: The rising number of construction activities globally is driving demand for building code compliance services. Developing nations are expected to account for over half of the market. With large-scale investments in real estate, infrastructure and energy projects, ensuring code compliance is critical. Construction companies are utilizing compliance services to avoid costly reworks, delays and lawsuits.
• Rising Adoption of Building Information Modeling (BIM): The growing adoption of BIM in architecture, engineering and construction industries is propelling the demand for building code compliance solutions. BIM enables stakeholders to integrate code requirements early in the design stage, conduct automated model checks and perform code validation through the building lifecycle. Several companies offer BIM-based compliance solutions to capitalize on this trend. For instance, Autodesk Construction Cloud provides tools for clash detection, digital plan reviews and assessing BIM models for code violations.
• Focus on Sustainable and Green Buildings: The rising trend of sustainable and green buildings to reduce environmental impact is also spurring the need for compliance services. Green buildings have to adhere to stringent codes and rating systems such as LEED and BREEAM. Companies are offering specialized compliance solutions to help contractors and owners construct sustainable buildings and obtain certifications. These solutions ensure energy efficiency, water conservation, material sustainability and other parameters.

Building Code Compliance Market Opportunities:

• Integration of Emerging Technologies: There are significant opportunities for leveraging emerging technologies like IoT, big data, AI and machine learning to enhance building code compliance processes. For instance, IoT-enabled devices can allow remote, real-time monitoring of construction sites aiding in inspection and audits. Big data analytics enables analyzing large volumes of documents and drawings to automatically detect violations. AI and ML models can be trained to streamline plan reviews. Adoption of such technologies will increase efficiency, reduce costs and open new possibilities.
• New Software-as-a-Service Business Models: The transition from legacy on-premise compliance software to cloud-based Software-as-a-Service (SaaS) solutions provides new opportunities. SAAS models enable easy scalability, faster deployment, and mobile access to compliance tools. Several companies now provide subscription-based compliance software with continual upgrades and support services. The scalability of cloud computing and SaaS enables expanding to new markets and reaching SMEs cost-effectively.
• Growth in Modular and Prefabricated Construction: The growing use of modular and prefabricated construction presents an opportunity for compliance solutions. As modules are built offsite under controlled conditions, there is increased emphasis on design and process compliance before assembly. Prefab and modular construction companies partner with compliance providers early on to integrate protocols throughout the supply chain. Customized solutions can enhance quality control and minimise delays.
• Public Private Partnerships: Public private partnerships offer an avenue to develop advanced compliance capabilities and infrastructure, especially in developing nations. PPP models can help upgrade existing labs, testing facilities and training programs through synergies between companies and governments. For instance, TÜV Rheinland partnered with Ethiopian government agencies to establish testing labs and develop skilled workforce. Such partnerships strengthen local capacities and enable technology transfers.

Building Code Compliance Market Trends:

• Growing Adoption of Smart Cities and Connected Infrastructure: The exponential growth of smart cities globally has created the need for solutions to ensure smart buildings and infrastructure comply with safety, connectivity and data standards. Technology companies are collaborating with smart city developers to implement compliance solutions tailored for connected systems and IoT sensors. For instance, UL Solutions has partnered with smart cities in the U.S. and Middle East to help ensure smart components meet codes.
• Rise in Outsourcing of Compliance Services: Construction companies are increasingly outsourcing compliance services to accredited third-party providers to reduce costs and minimize risks. Outsourcing enables focusing on core construction activities while experts handle code consulting, inspections, certifications and document management. Large compliance firms are offering bundled packages with comprehensive auditing, testing, and reporting capabilities for one-stop solutions.
• Integration with BIM and Project Management Software: Compliance solutions are being integrated with BIM and construction project management software for streamlined workflows. This enables automating code checking directly within the tools used for design modeling and construction coordination. For instance, Autodesk and Solibri solutions allow users to run code checks within Revit BIM software. Such integrations provide a holistic view of compliance needs.
• Use of Drones for Inspection and Surveying: Drones are being increasingly used in the compliance process for building inspection and construction site surveys to boost speed and safety. Specialized drone-mounted cameras allow capturing high-resolution aerial images and videos of structures and components for assessment by compliance officers. Drones can survey hazardous or difficult to reach areas more efficiently. This enables faster verification of code deviations.

Building Code Compliance Market Restraints:

• Lack of Harmonization Between Different Regional and Local Codes: There exists inconsistency and complex variations between building codes and standards across different states, cities and municipalities within a country. Navigating this complexity poses challenges in establishing uniform compliance protocols. Companies have to customize region-specific compliance solutions leading to increased costs. Lack of harmonization also results in construction delays.
• High Upfront Costs of Compliance Software and Training: Though critical, investment in compliance software and training inspectors involve significant upfront costs for construction companies. Adoption is lower in small and midsized contractors. The complexities of operating specialized software also necessitates spending on training employees, further adding to costs. This poses a restrain, especially in emerging economies with fragmented construction sectors.
• Resistance to Adoption of Compliance Solutions in Low Regulated Markets: There is slower uptake of modern building code compliance solutions in regions with lower regulations and enforcement. The absence of stringent penalties for non-compliance reduces the incentive to proactively invest in compliance capabilities. There is also lack of awareness regarding benefits of compliance. Resistance to change legacy practices in such markets is a major hurdle.

Recent Developments:

New product launches:

• In October 2022, Intertek launched Total Code Compliance, a cloud-based solution for managing building code compliance. It features digital plan reviews and automation capabilities. This enhances Intertek's service offerings for code consulting and compliance.
• In June 2021, UL Solutions launched UL Codes, a web-based platform that provides unified access to UL's building codes and standards intelligence. It aims to help streamline product certification and compliance processes.
• In April 2020, SGS acquired BOOM, a tech startup offering BIM-based code compliance software solutions. This strengthened SGS's digital capabilities for automated code compliance reviews.

Acquisition and partnerships:

• In September 2022, Intertek partnered with Tyto Athene to leverage Tyto's microservices and full-stack development capabilities to accelerate Intertek's digital transformation. This aims to enhance Intertek's code compliance solutions.
• In June 2022, Bureau Veritas acquired PreScience, a US-based specialist in Project Management/Construction management services. This helped expand BV's construction project management expertise.
• In January 2021, SGS acquired SYNLAB Analytics & Services, expanding its analytical capabilities in environment, food and agri-commodities testing in Europe. This enhanced SGS's leadership in testing, inspection and certification services.

Figure 2. Global Building Code Compliance Market Share (%), By Service Type, 2023

Top companies in Building Code Compliance Market:

• Intertek
• SGS
• Bureau Veritas
• DEKRA
• TUV Rheinland
• TUV SUD
• Element Materials Technology
• Applus+
• UL Solutions
• NSF International
• MISTRAS
• Building Control Alliance
• SOCOTEC
• QPS
• Acme Analytical Laboratories
• ALS
• Eurofins Scientific
• EnviroScience
• EAG Laboratories
• Engineering Systems

Definition: Building code compliance refers to the process of ensuring that the design, construction, operation and maintenance of buildings and structures conform to the codes, standards and regulations set by governmental agencies at the federal, state and local levels. Compliance helps ensure the safety, sustainability, accessibility, energy efficiency and resilience of the built environment. Code compliance services involve reviewing plans, performing inspections and tests, certifying systems, and providing consulting to assist stakeholders in adhering to building codes and standards. The market comprises testing, inspection, certification, consulting and software solutions offered by companies that assess compliance. Adherence to building codes is critical for risk mitigation and to create hazard-resistant, high-performance buildings and infrastructure.

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