![]() Smart building technologies, energy and operational efficiency, and the flexibility of built structures are much higher priorities for this savvier customer as total cost of ownership (TCO) begins to take precedence over choosing the lowest initial investment. The disruption comes from the fact that these customers have very different expectations in terms of delivery times, budget, and the level of engagement they receive from their construction companies. In 2019 alone, these sources raised over $100 billion in infrastructure investment, a 24 percent increase from 2018. With a significant increase in investment from private equity firms and institutional investors, the level of customer sophistication is rising dramatically. The following evolving market characteristics will challenge construction companies to accept the heightened need for change and to move quickly to implement the necessary changes.ġ. The COVID-19 crisis will not delay these changes but will amplify them. In the coming years, changes in market characteristics and emerging disruptions will continue to drive changes in how we do business and how building is accomplished. The construction industry was already experiencing an unprecedented rate of disruption before the COVID-19 pandemic changed everything in early 2020. The new characteristics will combine to erect higher barriers to entry, which will be positive for companies that manage to strengthen their market position and to invest.” 7 Sources of Disruption in the Construction Industry As the McKinsey report points out, “A refusal to adapt to this upheaval will only worsen performance, while developing new business and operating models could allow companies to generate more value and profit. So, the wise course is to view the list of trends as a loose roadmap for future planning and investment. The heart of the report involves seven key disrupters impacting the construction industry and nine trends for the future that those disruptions have put into motion. While your company may not be seeing all seven disrupting influences affecting your local market just yet, they’re definitely coming. But, with months to analyze and recalibrate, the indications are that the near-term and extended ramifications of the pandemic will only serve to accelerate the trends that the survey data brings to light. Much of the data McKinsey is publishing was collected via survey prior to the rise of the COVID-19 pandemic and its unprecedented impact on our industry. It’s thorough, at 90 data-packed pages, but we recommend setting aside some time to take it in because it offers some powerful insights into the future of construction that you need to understand. McKinsey released an outstanding report in June 2020 that’s well worth a read, called The Next Normal in Construction: How Disruption is Reshaping the World’s Largest Ecosystem. ![]()
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