Research shows how pre-crisis trends will fundamentally overhaul the construction ecosystem, as two-thirds of surveyed executives believe the Covid-19 pandemic will accelerate industry transformation
A new report by McKinsey & Company finds that up to 45% of value will be at stake for incumbents in the most affected sectors
Covid-19 has forced companies across the construction ecosystem to review their financial position while keeping employees and business partners safe and moving ahead with their ongoing construction projects wherever possible.
As decision-makers shift their attention to reimagining the future and reforming their businesses, McKinsey & Company research offers a blueprint for the next ‘new normal’ of the world’s largest eco-system.
The findings in the report, ‘The next normal in construction: how disruption is reshaping the world’s largest ecosystem‘, highlight that up to 45% of value will be at stake for incumbents in the most affected sectors.
In the executive survey, over 75% of respondents agreed that the shifts the research outlines are likely to occur, and over 60% believe that they are likely to happen at scale in the coming five years.
Two-thirds believe that the Covid-19 crisis will accelerate the transformation.
Time of reflection and reimagination
Jan Mischke, partner at the McKinsey Global Institute, said: “While fast movers can tap into $265bn per year in new profit pools as they take advantage of nine transformational shifts that will change the way the industry operates, others will be left behind.
“Policymakers could support the transformation to help the industry produce better outcomes for their citizens — such as affordable housing and infrastructure; owners can benefit from improved quality at lower costs, and investors could use the foresight in the report to plan their short and long-term investment strategies.”
Gernot Strube, senior partner at McKinsey, said: “We expect to see a transformation away from a complex and fragmented construction landscape building new prototypes in every project, to a more productised, consolidated and vertically integrated construction set-up.
“The industry will move from a project to a production-based approach, and toward increased investments in R&D, plants, talent, branding, sustainability, and digitisation.
“In this time of reflection and reimagination, businesses have the opportunity to transform their business models, redefine the role they play in the construction eco-system and capture new value.”