Shared trends and developments across regions might offer a solution to the crisis facing the construction industry due to the pandemic, according to a new research report by tech firm Asite. The report suggests digital engineering and the establishment of strategic operating models as key to building resilience and safeguarding the industry. It calls on companies to recognize their interdependence and develop a regionally engaged, yet globally responsive strategy.
Research was conducted on North America, the United Kingdom, Europe, the Middle East, Asia-Pacific, and India to examine key industry trends.
“When we began our research, we could not have known how drastically the world would change in such a short time. This change and the impact of the COVID-19 outbreak has impacted our findings and will continue to shape our industry long after the pandemic has passed,” says Nathan Doughty, Asite CEO. “Now more than ever, our industry needs to come together and operate as the global industry it is to solve future challenges and build resilience.”
Here are key takeaways from the report.
North America: Airports and smart cities
Steady growth impacted by COVID-19 — Construction in the U.S. was expected to have a CAGR of 2.22% by 2022. This growth is set to be affected by the COVID-19 pandemic regardless of a promised government stimulus package. The sector is witnessing a steady increase in projects stoppages, which will affect the industry overall.
Aviation upgrades — Under the Airport Improvement Program, the U.S. government plans to invest $3.2 billion in the development and modernization of aviation facilities in the country. We predict that this commitment will set a precedent, as according to the American Society of Civil Engineers, a wide scope of repairing, upgrading, and modifying works is required throughout the USA.
Declining demand for workforce — The collapsing price of oil and the impacts of COVID-19 are set to change predictions that the North America market, in particular Canada, would witness a growing labor demand. The increase was linked to major public transportation and infrastructure, utility, liquefied natural gas, pipeline, and health services projects countrywide. However, the region is now seeing a decline in demand for workers. Despite the setback, markets are expected to bounce back. There are positive signs that the energy market’s project pipeline is growing.
North America smart city dominance — The smart-city platform market is expected to register a CAGR of 18% between 2020 and 2025. North America is already the leading region in the area. This dominance will continue and grow as the adoption of smart building technologies becomes common practice in the U.S. with a future focus on transportation and energy. New York’s MTA will become part of this program as it continues its current transformation.
Worldwide: Sustainability and modular construction
Impact of European Green Deal — Building and renovating in an energy- and resource-efficient way is a cornerstone of the European Green Deal. The construction industry will begin to feel the impact of the deal during the first months of 2020 as legislation ensuring the use of longer-lasting products and recycled materials on EU sites come into place.
Easing of Asian construction boom — The infrastructure and construction industries were projected to experience a boom in the coming five years, with Asia forecasting a CAGR of 8.9% by 2023. COVID-19 will impact this growth as site closures across the region result in completion delays. Although sites are beginning to reopen, the initial issues will affect the industry.
Post-Brexit decline before stabilizing — With 65% of the construction industry either “concerned” or “highly concerned” about the outlook for the U.K. industry post-Brexit, this may lead to a dip in construction activity in 2020. Therefore, focus must shift to building resilience and preparing for this potential decline.
Substantial infrastructure development in Dubai — Despite the global pandemic, Dubai will continue to prepare for Expo 2020 (now planned for 2021), adjusting planned preparations as required. Over the coming months, numerous infrastructure projects will be completed to accommodate the needs of the huge 173-day event. Industry data shows that, as of March 2018, the total value of the top 10 active projects linked to Expo 2020 will exceeded AED 120 billion.
Growth of the Indian modular construction market — Along with an increase in BIM usage, modular and prefabricated construction projects are expected to gain popularity to help expedite residential and commercial building projects. Considering the government’s focus on sustainability and energy-efficiency, this projection makes sense. Moreover, statistics indicate that the modular construction market will stand at US$157 billion by 2023.
The full report is available here.