The construction industry is facing a phase of digital disruption, despite being one of the fastest-growing sectors in the world.
According to a new report by Global Construction 2030, the volume of construction output will grow by 85% to $15.5 trillion worldwide by 2030, with three countries, including China, the US and India leading the way and accounting for 57% of all global growth.
With all these promising scopes, the industry has gained only 1% of productivity in the past 20 years due to digitization.
Experts predict that over the next decade, these below trends will hugely affect the construction industry:
Trend 1- Labor shortages
During the Green Recession period (2008-2009), the construction sector lost over 2 million employees with many of them who have not returned or turned to other companies. As per the report from Associated General Contractors of America, about 80% of construction firms are facing problems in hiring workers.
The major problem lies in the lack of interest in the younger generation to work on construction sites. On the other hand, the existing workforce is all old and weary with about 32% of laborers belonging to the 45-64 years old, as in 2018.
In addition to this, the lack of diversity and uncertainty of immigrants will only make the matter worse.
To combat these issues, construction firms are introducing various in-house training and apprenticeship programs in collaboration with the locals and state governments to create awareness and train new talents to prevent the issue of a labor shortage.
3 tips to overcome this:
- Create a bigger pool of laborers by promoting talents locally
- Give a tough fight to your competitors by hiring, onboarding, recruiting, managing performance, compensating and retaining your employees
- Change your formula to- More dollars x huge workforce = greater output
Trend 2- Megaprojects to affect small firms
With the arrival of digital technology, projects will become larger and faster, with fewer chances for failure. Thus, companies need to focus on project delivery with the help of design-build construction and prefabrication.
Design-build project delivery is different from the traditional project delivery wherein the designer and contractor work together as a team. This method enables faster delivery with greater reliability costs in comparison to other alternative delivery methods.
Also, the reason why more people are moving towards technology-driven construction projects is that design-build projects are 1.9% less expensive than the construction manager at risk (CMR). In addition to it, these projects are 13% faster than CMR and are delivered 61% faster than CMR.
With the growth in megaprojects, smaller firms will find it difficult to sustain in this arena. Larger firms are going to increase while small firms will remain to be competitive.
Trend 3- Technology in construction will increase
The use of innovation in the construction industry is just going to increase in the next decade. The construction industry too believes that the solution for all their problems lies in technology.
The demand for technology is only going to increase and has already been deployed in many countries.
The disruption of technology in the construction industry will change drastically.
Among all these challenges, industrialists can gain a competitive advantage by:
- Starting your own workforce along with a proper strategy in place
- Building a bigger balance sheet
- Developing a better portfolio by diversifying the market tendencies
- Thinking twice before investing in technology
Is the Construction Industry moving towards a new dimension?
Yes! According to a recent infographic from Raconteur, the adoption of technologies can impact the sector’s processes that will either make or break this industry.
Almost 46% of the construction companies are on their way towards digital transformation, while 41% are still in the early stages of transformation.
With the influx of 3D printing, the depiction of complex structures is being made simple and fast. Constructions are now done remotely and unmanned using automated robots to drill, lay bricks, paint, construct beams and much more.
Drones are deployed to keep a watch on the construction of the building as they can cover a wide area in a short period providing high-quality images to various computer systems and machines in real-time.
Tech adoption: Statistics
Data from the KPMG Future-Ready Index, about 20% of innovative leaders in the construction industry have the highest technology adoption rates.
- Building Information Modeling (BIM) – 86%
- Basic data analytics – 83%
- Project management and information systems – 79%
- Drones – 72%
- Mobile platforms – 69%
Now, the fate of the construction companies is all about going digital to gain profits and fend off competitors. Manufacturers who fail to join the bandwagon will probably go out of business.
I too believe that digitization will improve productivity, speed up delivery and meet all sustainable challenges.
About the Guest Author:
George Webster has been serving as a civil and a structural engineer at Shah and Talati. She has acted as an arbitrator and mediator in many construction deals. She is a music lover and holds a keen interest in history and politics too.
