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You Asked Us: Is there any light at the end of the tunnel for the global construction sector?

Is the industry primed for a ConTech breakthrough? What will the post-COVID-19 international client look like? You asked us during our recent webinar covering the results of the most recent RICS Global Construction Monitor. Here, two of our expert panellists respond.

World Built Environment Forum
22 February 2021

WBEF expert panel:

Michael Gabert, Director – Prairies, BTY

David Johnson, Managing Director, Gleeds EMEA

There is endless discussion around technology, but it still feels as if the sector is lagging. How close are we to a ConTech breakthrough both on- and offsite, and in the professional services sector? Can ConTech improve the sector’s notoriously problematic productivity record?

Michael Gabert: I believe the pandemic has accelerated the use of many technologies and will help expedite sector wide adoption. We see companies placing an increased focus on tracking devices, digital twins and robotics. In turn, this will drive up use of advanced analytics with the potential to increase accuracy on productivity, and transform the life cycle of assets through improved risk analysis and optimised asset management. This should lead to faster gains in useable technologies that can be implemented industry wide. I don’t believe that ConTech itself will solve issues around productivity. It will, however, allow for the implementation of various strategies to deal with the issue, based on the increased volume of data received and more efficient processes. 

David Johnson: Our sector has traditionally lagged behind others on tech adoption. That said, we feel a breakthrough has been made - onsite, offsite and in the delivery of services. The use of modern methods of construction, site robotics, BIM models and digital twins is increasingly common. Data analytics is also playing a major role in helping design teams, clients and contractors analyse and forecast trends. Properly organized and consistent data collection will assist in setting realistic productivity expectations based on actual project performance and not speculation. But we cannot lose sight of the fact that some technologies take time to implement at a global level. Often, tech solutions don’t fully address or respect the unique needs and capabilities of differing regions.

We cannot lose sight of the fact that some technologies take time to implement at a global level. Often, tech solutions don’t fully address the unique needs of differing regions.

David Johnson
Managing Director, Gleeds EMEA

With government support schemes likely to diminish in importance as the year wears on one, is there a risk we end up in race to bottom on cost once again?

DJ: There is a significant risk that businesses will be unable to afford a return of their furloughed to the payroll if support were to stop before the market recovers. Although there is optimism in the EMEA region for ongoing private sector construction, challenges in the international supply chain are already increasing costs. Forecasts also show a decrease in tender pricing, implying that the race to the bottom may have already started.

How will the new global client differ from the pre-COVID-19 archetype?

DJ: The Global Client will remain the same – what will change are business plans, investment opportunities and, very importantly, the ESG agenda. New projects will be designed with an emphasis on flexibility for future-proofing investments. Clients may begin to focus on multi-use projects to attract people and increase footfall. Renewed interest in lifecycle costing and carbon footprints will promote wiser design and construction which is both financially and environmentally sustainable.

We are currently seeing unprecedent government spending on social programmes related to the pandemic. These programmes will require timelines for future infrastructure investment to be lengthened

Michael Gabert
Director – Prairies, BTY

How credible is the generally positive sentiment towards infrastructure, given that it’s much easier to talk about investing in the sector than it is to actually invest?

MG: Infrastructure has been seen as a somewhat proven strategy to move out of an economic downturn over the years. Most governments are implementing infrastructure policies as they attempt to build out of the COVID-19 crisis. As noted during the webinar, this should be viewed with the knowledge that we currently have unprecedent government spending on social programmes related to the pandemic. These, in turn, will require timelines for future infrastructure investment to be lengthened, and the implementation of new investment strategies incorporating the private sector. Private investment will be key for governments as they seek to move infrastructure forward through the current build cycle.

DJ: Infrastructure projects tend to be driven by government initiatives, major international events such as the Olympic Games, or urgency – as is the case in disaster recovery and rebuild projects. Considering infrastructure is the cornerstone of most modern, productive economies, national expenditure typically represents a significant portion of GDP. Enormous government spending has been required to combat the economic effect of the pandemic. As such, we expect an increase in use of Public-Private Partnerships; PPPs have the advantage of being driven by economics, and not only politics.

RICS Global Construction Monitor: Q4 2020 results

RICS Global Construction Monitor is the leading indicator of conditions in construction and infrastructure markets around the world. In this webinar we will present the results of the Q4 2020 survey. At the end of a difficult year, is there any evidence of light at the end of the tunnel?

Download the APAC and MEA presentation slides

Download the Europe and Americas presentation slides