The declining value of the rand, economic ratings downgrades by global agencies, a shortage of skilled labour, and a deficiency of public-sector financing. These challenges paint a challenging future for construction players on the surface, but dive a little deeper and you’ll see a slightly different picture.
“Infrastructure investment in the transport and logistics, energy, and low-cost housing sectors are expected to create growth in the construction industry till 2021,” says Riante Naidoo, construction editor atInfrastructure News. She explains that local project growth will be underpinned by the ever-increasing need for housing as urbanisation rates continue to rise across the country.
Statistics South Africa reports that human settlement growth rates and the number of building plans passed in the country during 2016/2017 grew by 6% – resulting in an increase in construction revenues from R101.4 billion to R107.5 billion in this niche.
In its 2017 budget, the South African Government said it plans to invest R947.2 billion in public sector infrastructure as part of its medium-term strategic action plan. Affordable housing projects are on the cards to cater for the country’s lower- and middle-income citizens.– Infrastructure News
Construction remains a leading sector to be involved in
Forbes reports that running a construction or building-related company is lucrative and will remain so well into the future.
“Seven of the top 10 industries we looked at with the highest sales growth are related to construction,” says Mary Ellen Biery, senior contributor toForbes.
“Among construction-related industries with the fastest sales growth, building-finishing contractors, residential and non-residential builders, contractors that work on foundations and building exteriors, and contractors that install or service mechanical systems such as electricity, water, elevators and heating and cooling, are leading the way.”
She says that each of these construction-related industries experienced sales growth of at least 13% last year and companies that are providing civil engineering construction services are also expected to thrive in future.
Trends shaping the next 30 years of the construction sector
According to VIATechnik, a construction and engineering technology solutions firm founded by Stanford University alumni, there a several trends that you can expect to shape the future of the sector.
Here are some key trends the company is factoring into its business strategy for the next three decades that are also going to impact several construction firms around the world:
1. The increasing use of new and efficient building materials
According to Dr Ian Pearson, a full-time ‘futurologist’ who works with Hewden (a UK-based yellow-metal equipment rental business), the future of construction companies’ success lies in their leveraging of advanced material technologies, evolved building practices, half human/half machine collaboration and augmented reality.
“Building materials will not only continue to become stronger, but also lighter, making it easier to build oddly shaped structures,” he explains. “We’ve seen it a lot in recent years, so don’t expect that to change in the future.” Dr Pearson isn’t just talking about structural elements either, as he notes that glass and composites will be made stronger and lighter through the use of graphene and carbon nanotubes.
“One of the more interesting predictions he makes is spray-on solar coatings, which would make solar panels next to invisible,” VIATechnik spokesperson, Traci Beilharz says. This can help construction companies cost-effectively build green solutions for clients that are looking to reduce their carbon footprint.
Related: The digitalisation of the construction industry
2. More advanced pre-fabrication methods and off-site assembly
Another trend that’s expected to grip the sector in the decades ahead is an increase in pre-fabricated or ‘off-site construction’. “These alternative practices can reduce construction time, waste, and unnecessary expenditures,” Dr Pearson reports.
Dominic Thasarathar, senior industry programme manager for construction and natural resources at Autodesk says ‘pre-fab’ is already proving popular in sectors like the healthcare, but it will gain momentum amongst construction players in the years ahead.
“Pre-fab is up-and-coming. It’s a way to save costs and speed up the time,” he corroborates. “Some of the larger construction firm owners out there are already starting to realise the efficiencies of pre-fab, but you have to be doing a certain amount of project volume for these kinds of off-site strategies to pay off.”
3. Greater use of 3D printing (on and off the construction site)
One of the key enablers of pre-fab in the construction sector comes in the form of 3D printers. “There’s a lot of hype around 3D printing technology, but once it is seamlessly integrated into everyday construction practices, it can finally be allowed to live up to that hype,” Dr Pearson says.
According to VIATechnik, they have big expectations and high hopes for 3D printing. “It will make detail work easier and buildings more intricate and artistic,” Beilharz says. “Given the state of our planet today, green building practices will only become more of a standard in the upcoming decades. Dodge Data & Analytics says that ‘green building’ already makes up 33% of the residential market today and has helped the building market in the USA recover after the global financial crisis.”
While industry veterans might be skeptical about the use of 3D printing to build infrastructure, take a look at The Printed Villa. “While others debate the methodology and the finer points, a Chinese company has already built a villa with a robotic arm attached to a 3D printer head,” Nick Hall from3DPrintingIndustry says.
The Printed Villa is a full-sized house that was printed onto a steel frame in just 45 days. “Every wall is 250mm thick, the building can withstand an earthquake that measures an 8 on the Richter scale and it’s a better house in many respects. It also allowed the company to create extravagant turrets that would be a serious time-suck for a team of builders,” Hall explains. If you tried to build this house without a 3D printer, it would have taken three months using conventional techniques.
Related: How upskilling programmes can benefit your construction business
4. The rise and rise of AR and VR for construction
Sony and Microsoft, and to an extent Samsung, are leading the way when it comes to promoting the future of virtual reality and augmented reality for entertainment, but it’s believed that VR and AR have a more important role to fill in the construction environment over the next three decades.
According to Marla McIntyre, senior editor of Construction Executive, it’s undeniable that more and more companies will embrace the new technologies.
“Take a look around the world and you’ll see buildings getting taller and taller. This is a trend that shows no signs of slowing down,” she says. “Super-tall and mega-tall buildings are trending toward becoming mini-cities that include residential space, shopping, restaurants, theatres and offices.”
McIntyre explains that architects and engineers will need to stand out in a crowded marketplace by designing oddly shaped buildings that entice clients’ imaginations, and VR and AR can help them keep costs low by modelling these spaces in a digital world before a single slab is laid.
How to strategise in construction for the next 10 years
With rising material and labour costs expected, construction companies might struggle to maintain their margins in the coming years. Contractors must plan for significant bumps in material costs while navigating a landscape where the days of ‘design-bid-build’ are said to be over.
“Industry experts expect collaborative approaches to become more common for building projects,” says Emily Peiffer, associate contributor to ConstructionDive. “Design-build, public-private partnerships and integrated project delivery are three of the most often-cited methods that will alter the industry in future.”
So, while it might hold true that trends come and go, some trends perhaps have enough staying power to become the ‘new standard’ of doing business. Factoring these trends into your business growth strategy might help you thrive in a future where more elaborate resource-efficient buildings are going to increase in demand.
Standard Bank’s construction sector experts can assist you in assessing the state of the market and your growth potential within it. If you’d like advice on how to grow your construction business, or if you need access to financial resources to buy capital equipment, why not speak to us about the tailored business solutions we offer.