Construction Industry- Looking back at 2019
The past year has flown by, with new projects underway and many developments in technology leading to changes in the way construction companies do business. The engineering and construction (E&C) industry has had a robust year, and E&C firms have been positioned as active participants in building the smart, connected future. The Indian construction industry is predicted to grow at an average rate of 6.4% according to Global Data. Overall market growth is expected to continue through 2019 as construction spending follows the overall GDP growth rate.
While firm revenues are steadily rising, the bottom lines are still under considerable pressure. Among the challenges the industry faces are sustained cost pressures, ongoing labour shortages that affect productivity, and trends toward fixed-bid projects that often demand a level of pricing and operations precision that is difficult to obtain with traditional systems. While the industry still trails broader digital adoption maturity, the continued adoption of digital technologies could alleviate some of these issues.
Despite these challenges, E&C firms are poised to remain competitive. Construction industry leaders will likely continue to define a new vision and map a comprehensive digital blueprint to realign their business and operational processes to reflect the opportunities that innovation and technology provide. While slower to adopt digital than other industries, the construction industry is moving quickly to incorporate game changing technologies into operations to increase safety, reduce operational costs, provide innovative solutions to customers, and find competitive advantages with real-time insights that can change project outcomes.
Mobile technology provided many applications from real-time inspections to on-site accountability and being able to measure spaces with just a mobile phone camera. Those without complete mobile connectivity will be at productivity and sales disadvantage from this year forward. Internally, digital technologies like robotics have the ability to make significant impacts on back-office operations for engineering and construction firms.
In addition, building information modelling (BIM) systems that allow contractors to create 3D models and make immediate changes to designs today are evolving quickly. With the inclusion of cost and project scheduling to add two more dimensions, 5D BIM systems can help bring projects in on time and on budget, ensuring no overruns—a key to driving operational efficiencies with large construction projects. Look for potential further maturity of BIM in the coming months into offerings that incorporate 7D, adding energy efficiency and facility management for comprehensive life cycle project management.
Digital is also driving 'connected construction' adoption. Drones, wearable, augmented reality (AR), and GPS tracking services are revolutionizing job sites, streamlining surveying, improving worker safety, and capturing valuable data. 2019 witnessed a push toward better safety equipment to counter the higher number of construction-related accidents and fatalities seen in recent years.
Incorporating construction management software is one of the best ways to modernize operations and advance your organizational growth. Generally, software removes paper processes, making your organization more efficient. 2019 will see more large and small companies making use of affordable integrated software solutions.
Overall, the outlook for the construction industry is positive. Industry strives for greater efficiency and safety. And then there is the entire buzz around construction tech start-ups that are set to transform the E&C space. Over the last decade, more than $10 billion has been allocated to funding construction technology. While many of today’s construction tech start-ups may be in growth mode right now, E&C is an unpredictable sector. So, where venture capital firms may be involved with it during the 'boom' times, the real test comes when E&C start-ups must maintain growth during a downturn.
There appears to be much we can be optimistic about, and signs of great potential for change. There will undoubtedly be more legal cases which change the way we view things and more updates to come in 2020.