- 9 Catalysts Changing Construction: McKinsey Report
- Accelerating Change in Construction: McKinsey Report
The June, 2020 McKinsey & Company report, “The next normal in construction,” refers to construction as the world’s largest ecosystem, and indeed when change happens, it now happens on a global scale. Such is the case for the reaction to the COVID pandemic.
Changes had already been taking place in the construction industry: building information modeling (BIM), virtual and augmented reality (VR and AR), artificial intelligence (AI), robots, a tech-savvy workforce, green/ sustainable construction. Whereas these used to be impressive technologies that distinguished companies from their competitors, now certain technologies are becoming must-haves.
The McKinsey report points out that the response to the COVID pandemic will accelerate change that has already started to occur at scale. Three-quarters of the companies surveyed for the report indicated they fully anticipate construction will change as a result of nine shifts in the way they do business. See the blog article, “9 Catalysts Changing Construction” for a summary of what those changes are.
Here are some signs of the change that’s already been taking place and promises to accelerate:
- Changing market – Total cost of ownership has become increasingly important to the new class of environmentally-conscious customers. Efficient building operations are key. That trend will be amplified by economic conditions caused by the reaction to the world’s response to this pandemic and any others in the future. Stricter health and safety regulations are already in place. There will also be increased demand for new, sustainable construction materials, resulting in an increase of 77% in research and development since 2013.
2. Technological progress – Digital technologies, BIM and data-driven decision making, Smart products, and Internet of Things (IoT) sensors, are already being utilized to enable greater energy efficiency. Demand will fuel the increase in their use in the future. The reaction to the current pandemic is forcing companies to adjust the way they do business and integrate digital tools to function in the new business climate. Enabled by technology advancements, modular and prefab construction are increasingly solutions companies are turning to – a 50% increase from 2015 to 2018, long before the pandemic.
3. Disruptive new entrants – A new type of investor is emerging in construction projects, and they must be reckoned with. Those investors have different expectations about budgets, delivery times and building performance. They may not be familiar with the “way we’ve always done” things and possibly don’t care. Half of the survey respondents have already raised investment to stay the course during the acceleration of the industry’s transformation.
A vast majority of construction companies surveyed fully expect the changes in the industry to heat up moving forward. The condition of the economy will demand it. Greater efficiencies, shorter delivery times, compressed budgets, affordable housing; these will all be in higher demand when construction gets back to full production.
The MEP Force 2020 all-virtual event will be held August 31 to September 2. Register today for MEP Force, where you can learn more about the changes affecting the construction industry, especially fabrication and prefabrication. Autodesk’s Queen of Prefab Amy Marks will be the featured keynote speaker. Then choose from over 75 breakout sessions where you can learn from other industry leaders about new technology trends that are affecting your business.