Covid-19 and the European construction sector
Near-term prospects for the construction sector are challenging, but the Covid-19 pandemic may bring about a sustained period of modernisation.
The urge to reboot the global economy as lockdown conditions ease can't distract us from those challenges that pre-existed the pandemic. The drive towards a digital-ready, environmentally responsible construction sector must continue in our new normal.
Sander Scheurwater, Director of Communications, Marketing and External Affairs – Europe, RICS
14 October 2020
Society 1.5 refers to the 1.5 metre social distance restriction observed in most European countries during the Covid-19 lockdown. By coincidence, it will be necessary to limit any increase in global temperatures to 1.5°C if we are to avert the worst effects of climate change.
Over recent months, it has often been said that we’re moving towards a ‘new normal’, prompted by Covid-19. Megatrends, such as high-tech development, climate change, and shifting human needs and expectations were already challenging the status-quo. In effect, we were already moving towards a ‘new normal’. Covid-19, in that case, may simply be the accelerator. This is a theme already touched upon by urbanist Greg Clark, in his most recent WBEF column.
One emerging pressure point is that between the wish to do something different for people and the planet, and the economic drivers pushing us back towards the way things were. This is perhaps best evidenced in the tourism industry. Prior to the outbreak, decision makers from tourist hot-spots such as Venice, Barcelona and Amsterdam were voicing serious concerns about over tourism. The lockdown has underlined the importance of visitors to local economies. Many major cities need the tourists to return.
Construction in Europe – What’s next for our society 1.5?
As most countries in Europe are finding ways to ease the lockdown, construction resumes. But will it be the same as it was before? Beyond Covid-19, we are still confronted with many challenges that have the potential to severely impact well-being and happiness of our societies. Climate change, resource scarcity and fast urbanization are among the most severe of these challenges. What have we learned? How do we respond? And will the impact of technological development be accelerated whilst we live in “society 1.5”?
Our panel was comprised of voices from across Europe, and we asked them to address how the choices we make today will impact our future. Our foremost concerns were climate, people and the economy. Finally, what will be the consequences of our choices for the speed and direction of travel towards full recovery?
In his opening comments, Massimiliano Pulice, CEO of Arcadis in Italy, explained that the continued global economic downturn will cause shortages of construction materials, particularly concrete and steel. This can, and probably will, lead to higher prices, as well as extended project timelines, and even cancellations. Whilst, on the one hand, many challenges still lie ahead of us, Covid-19 is generating new ways of working – not least in the increased adoption of smart technologies. For the sector, this represents a long overdue development.
The continued global economic downturn will cause shortages of construction materials, particularly concrete and steel. This will lead to higher prices, as well as extended project timelines, and even cancellations.
Jacopo Palermo, CEO of Impresa Percassi, spoke about the impact of social distancing on the construction site. With fewer workers present on site at any given time, projects are slowing down. Next to a different way of working as a result of Covid-19, many processes already manifest before the pandemic have accelerated. Most notable among these is off-site operations.
Both Pulice and Palermo live and work in one of Europe’s worst affected countries. At the other end of the spectrum is Cushman & Wakefield’s Frank Masuhr, whose responsibilities centre on the Germany, Austria and Switzerland (otherwise known as the DACH region). He introduced the “six-feet office” concept that might be better understood as a socially distanced workplace strategy. Covid-19 will change the way we work and the places where we work. The German construction sector has been largely unaffected by the lockdown. As such, adoption of new technologies, procurement laws and the war for talent remain the main points of attention.
Krzystztof Krzosek, Director of IT & Digital Innovation at Echo Investment, explained how new technologies are supporting health & safety on construction sites. Optimised logistics processes, prefabrication and offsite construction, and digital project monitoring tools such as BIM will all lower the need for people on-site, without disrupting usual functions. Specifically, the imminent arrival of 5G has the potential to make huge changes, provided we set the right standards, including the creation of a common language. The industrial revolution of the 18th and 19th centuries ushered in a world of greater personal comfort. The digital revolution should safeguard those gains while exacting a lesser toll on the environment.
Optimised logistics processes, prefabrication and offsite construction, and digital project monitoring tools such as BIM will all lower the need for people on-site.
Finally, Chris Brown, Executive Chairman of Igloo Regeneration, explained that the UK construction sector was largely exempted from the lockdown. One result has been high levels of infection among workers, and numerous lives sadly lost. The above-mentioned pressure point between people and planet on the one hand, and economic drivers on the other, is clearly evidenced in construction. However, the long-term trend is clear: we are moving towards a more sustainable economy. To quote from Greg Clark’s column: “The pandemic hasn’t changed the course of our journey; it is only the speed of travel that has changed.”
The spread of remote working will prompt a rethink of how commercial real estate is designed, constructed, used and maintained. Off-site construction will reduce the number of people needed on-site. The inter-connectedness of the world will see to it that even local projects draw materials and expertise from global supply chains. Underpinning these trends is the need for a common language through standards. The choices we make today will have consequences for tomorrow’s world. Let’s make sure that those choices are both economically sound and sustainable. Only that way can we save jobs and lives, and protect the planet.
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