Global pandemic hit the construction industry hard. While many projects were initially delayed and some even canceled, ongoing supply chain bottlenecks continue to impact recovery projects around the world.
"New regulation around energy efficiency is expected to have a high impact on sustainability and connected buildings in the short-term."
But there is a silver lining: coronavirus actually accelerated the adoption of sustainable construction programs, connected buildings, and an industry-wide focus on smarter analytics. That’s according to the first edition of Roland Berger’s Construction Disruption Radar, which recently surveyed leading Spanish constructors and their suppliers (i.e. SEOPAN members).
Although our inaugural Construction Disruption Radar examines market conditions specific to Spain, many of the strategic implications are similarly affecting global markets, which we hope to study further in future editions of the radar.
Until then, this is what we learned.
Through expert interviews and market analysis, the first edition of our Construction Disruption Radar revealed that leading construction companies in Spain are focused on sustainability, operations efficiency, new construction solutions, and more robust organizations . Within the next three years, they hope to increase the number of connected buildings, smart construction sites, and better analytics to fuel their futures.
"Increasing efficiency in operations, new construction techniques, and the rising importance of data also rank high on the ‘challenge’ list. "
So far, smart functionalities are becoming a common feature in new builds and retrofits, according to survey participants. Among them, energy efficiency, improved safety and security, and maintenance optimizers are the most commonly used.
While less than 50% of new builds use modular materials today, respondents acknowledge that the technology will play an increasing role to lower the future cost of construction. On top of that, improving onsite project management, reporting, and resource planning were also cited as top priorities.
Overall, our survey results show that leading Spanish construction firms are undergoing a pragmatic change with a focus on adapting to new regulatory and client requirements, while increasing operational efficiency to improve their competitiveness. The monetization of new business models around these innovations is the logical next step.
To achieve much of the above, our research shows that industry participants are actively pursuing new partnerships and collaborations with technology , design, and engineering specialists. To that end, many leading firms are launching innovation hubs or start-up incubators to foster innovation.
This is particularly relevant since construction and infrastructure companies are expected to play a key role in Spain’s (and the greater global) economic recovery. Not only for the works they produce, but also for the many benefits they provide for public administration and greater society. After all, the construction industry constitutes 7% of the world’s working population and 14% of its total GDP. The importance of this industry cannot be overstated.
Of course, challenges remain for the entire industry. But next generation EU recovery funds expected to arrive this year and beyond will provide a historic opportunity to drive real structural and systemic changes to modernize the Spanish construction industry and beyond. All told, over 90% of respondents believe sustainability efforts will “deeply affect” the industry over the next three years.
To that end, we believe infrastructure investment must be substantially increased in the coming years. Thankfully unprecedented public investment programs and relief packages to fight COVID-19 are supporting a quick recovery, and subsequently, a significant boost to the construction industry. Spain alone will receive $150 billion Euro for construction modernization projects. While relevant challenges remain, so too does determination and the strategic vision needed to succeed.
With R&D expenditures rising more than in other industries, the Spanish construction industry has been progressively adopting some of these initiatives in recent years. Nevertheless, innovation and productivity levels remain lower than nearly every other industry. What’s more, Spain falls behind neighboring countries in certain construction innovations such as connecting buildings.
Of course, the reality is further aggravated by a lack of standards and ongoing supply chain shortages brought about by pandemic. So the need to act quickly will become even more imperative in the coming years. Players who fail to quickly adapt run the risk of losing market share or even disappearing.
To learn more about how the construction industry is change, including best practices and future strategies, please read the full Construction Disruption Radar or contact us .
New Roland Berger survey examines the key disruptions taking place in the global construction industry. The series starts with the Spanish construction industry.
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