- By admins
- In Build, conrete, Design, Solar Systems
How construction can emerge stronger after coronavirus
Engineering, construction, and building materials have a vital role to play in a post-pandemic recovery of our communities and economies. Seven actions can help companies prepare for the next normal.
This article was written collaboratively by the global leaders of the McKinsey Engineering, Construction and Building Materials Practice, a group that spans different regions and segments and includes Jonas Biörck, Jose Luis Blanco, Jan Mischke, Maria João Ribeirinho, David Rockhill, Erik Sjödin, and Gernot Strube.
COVID-19 has affected communities globally, with more than 2.5 million reported cases as of April 30—a number that is still rising. And while governments and companies globally are responding fast, much remains to be done.
In this difficult time, construction matters more than ever. From building hospitals in just a few days to donating lifesaving equipment, the industry has played a critical role in responding to the crisis and in the recovery. The industry represents 13 percent of global GDP, and unlocking currently constrained labor availability could help drive recovery while addressing our most pressing construction-related needs.
But the industry has also suffered: construction sites in many countries have shut down. And most sites that are open have faced disrupted supply chains and operational restrictions. Such disruption has been reflected in financial indexes: since February, public engineering, construction, and building materials (ECB) companies have dropped significantly more than average.
Companies that came out ahead after the financial crisis of 2008 typically moved fast and hard on productivity (including cost reduction), rapidly reallocated resources, and made bold moves (including early divestitures and acquisitions in recovery) to prepare for the future. Leaders also invested heavily in digital technologies, differentiated their portfolios and offerings, and cleaned up their balance sheets.
Organizations must think through the moves they can make today to come out ahead later. A fast return to business as usual seems unlikely for the industry: leaders must first define and prepare for what the construction industry will look like after the crisis. Seven actions can help them anticipate and adapt to the next normal.
