The future of the construction industry – Rebuilding from COVID-19, Brexit and recession

Fraser McInnes Date published: May 12, 21

The future of the construction industry will see opportunities such as new government spending on infrastructure, a rethink on how commercial space is used and a drive towards sustainability. But industry success will also be tested by the ongoing effects of COVID-19, a slow economy and Brexit.

Here, we look at the challenges that construction firms can expect over the coming year, and how they can be mitigated by a digital approach to quality and risk management.

What has the impact of COVID-19 been on the construction industry?

While some parts of the construction industry have been hit harder than others, everyone’s business operations will have been disrupted in 2020. At the worst end of the spectrum, almost 4,500 construction businesses fell into significant distress in the last quarter of 2020. But even those that performed better than expected faced the same issues, including:

• Site closures and project delays
• Disrupted supply chains
• Changing health and safety demands
• Decline in investment
• A restricted workforce

No one knows how long the pandemic itself will stay with us, but these disruptions could affect the construction industry for some time to come.

What challenges will the construction sector face in 2021?

The construction industry is always vulnerable in a recession, and the economy will continue to struggle in 2021. Recovery could also be slowed by the effects of Brexit on the economy and on regulation. Whatever happens, construction firms should be ready to adapt quickly to specific challenges that emerge.

In many ways, the pandemic has highlighted known challenges in the construction industry around efficiency and a reluctance to plan for a digital future. But digitisation could be the very thing that helps construction firms stay agile and competitive in difficult times.

How digital technology can shape the construction industry’s future

The construction industry has a reputation for being slow at adopting new digital technologies. This is starting to change as compliance involves more data collection, for example in Building Information Modelling (BIM). But digital tools are about more than just compliance – they can help to improve quality, minimise risk and make operations more efficient.

Here’s where digitisation can make the biggest difference in shaping the future of construction:</p >

1. Protecting the health and safety of staff

The challenge:

The top priority is making sure people can work safely on-site. As well as the usual health and safety procedures, COVID-19 will continue to affect the way we work until the vaccine is widely available. This includes the need for social distancing and PPE. Whole teams could find themselves unable to work if they’re exposed to the virus in an unsafe workspace. In this sense, health and safety (H&S) is a workforce efficiency issue as well as a set of regulations.

How digital tools can help:

To truly embed a health and safety culture across your business, there has to be a unified system for recording, tracking and resolving H&S issues. This is only possible with software, helping you to:

• Avoid penalties and human harm through non-compliance
• Communicate policies easily between sites and teams
• Record on-site incidents with mobile devices
• Plan resources efficiently around expected needs

2. Managing supply chain disruption

The challenge:

Any blockage in the supply chain can delay projects and incur costs. This can be caused by a range of external factors. For example, builders in the UK began to run short of construction materials in December when a surge in imports caused processing delays at ports. This could be an ongoing problem as COVID-19 restrictions continue and new Brexit processes are adopted. Economic recession can also affect the supply chain, from smaller companies becoming unviable to cost-cutting on quality.

How digital tools can help:

Extending your construction quality management system to include suppliers can give you full oversight of how their performance affects your business:

• Monitor the compliance and performance of suppliers
• Choose the best partners for your business needs
• Adapt operations to cope with supply chain disruption
• Refocus business strategy to mitigate risks

3. Adapting to new standards and regulations

The challenge:

There are three core areas where regulatory changes could affect your productivity over the coming year: employment, sustainability and quality. The Government’s National Infrastructure Strategy responds to COVID-19 and Brexit with plans to simplify procurement in the construction industry, modernise its processes and improve sustainable practices. This could lead to a range of regulatory changes for construction firms. Having the necessary workforce to deliver new projects could also be affected by the end of freedom of movement post-Brexit and any changes to working visa rules.

How digital tools can help:

If your compliance management systems are disconnected and manual, it can be difficult to align all parts of your business to new regulations as fast as you need to. A centralised, online system makes it easier to:

• Avoid penalties and reputational damage for non-compliance
• Translate regulation into everyday best practice
• Beat the competition to opportunities by adapting faster
• Audit, track and trace risk more accurately

4. Integration and collaboration

The challenge:

Bidding for projects and delivering them successfully can involve a high degree of collaboration and documentation. This can often cause delays due to poor communication, missing information and re-writes. There’s also a risk that commercially sensitive information will be shared accidentally. All of these affect the quality and success rate of proposals and the project delivery itself.

How digital tools can help:

The ability to collaborate with partners more easily through online platforms could give your business a valuable competitive edge:

• Reach consensus with stakeholders more easily
• Avoid mistakes that lead to re-works and expense
• Protect confidential information when sharing data
• Ensure all your processes are transparent and auditable

5. Getting it right the first time

2021 could be a challenging year for parts of the construction industry, making opportunities more competitive. To get ahead, companies must be able to combine agility with water-tight risk management. Any slip in quality - from the physical quality of materials and build to the quality of service – can have a negative impact on business continuity. The reputation of your business could also be at stake.

How digital tools can help:

Technology can help bring together planning, people and processes to focus all activity on reaching quality goals:

• Use data for continuous improvement in quality management
• Model risk scenarios and mitigation plans
• Collaborate more transparently with all stakeholders
• Choose the best quality suppliers for your projects

A way forward for the construction industry

Whatever happens in 2021, there’s a growing consensus that digital technology is the future of the construction industry. It can give companies the flexibility to adapt their systems at speed when regulations change, minimise risk across their operations and make quality and compliance a natural outcome of everyday activity.

Download our free e-book to read more about the challenges of the construction industry with a detailed look at the challenges faced in 2021 and beyond.

Challenges in construction industry: 2021 and beyond

Our e-book looks at how the sector is set to recover from these issues while navigating new legislation and environmental concerns.