INDUSTRY REPORT
commodity market . If there are partnership agreements , the contractor is engaged through an EPCM contract . Otherwise , a supplier is chosen from the centralised list of preferred suppliers maintained by the Global Category Lead . Therefore , as a part of the best practices implemented by this segment , supplier shortlisting is either centralised or regional for capital projects . The strategic sourcing team , after analysing past project outcomes and in-depth market and supplier analysis , suggests two to three suppliers that are shortlisted from 10 – 15 suppliers maintained in-house ,” it added .
Cost savings , it suggests , will be supported by sourcing from environmentally friendly vendors . For long-term , sustainable cost reductions , it is important to recycle , use renewable energy and reduce waste . The construction market report by Beroe suggests that the civil construction sector has been contemplating preliminary actions to ensure sustainability and growth .
Image : Shutterstock . com .
Challenges and opportunities
Russia ’ s invasion of Ukraine led to a surge in commodity prices and supply chain disruptions , causing inflation across goods and services and affecting many markets across the globe .
“ Construction costs have increased steadily due to rising material costs in the historic period . Companies in the industry experienced subdued growth in their profits with rising prices of materials such as crude oil , a key component of asphalt , reaching US $ 41.96 per barrel in 2020 . Therefore , high material prices adversely affected the construction market ,” commented the Business Research Company in its latest global construction market report .
However , increasing construction activities in emerging markets are expected to propel the growth of the construction market over the coming years .
“ Emerging markets which registered robust construction activity included China ; Brazil ; India ; Saudi Arabia and Indonesia . For instance , according to the National Bureau of Statistics , construction output contributed for 25.9 % of China ' s GDP in 2020 , up from 6.2 % in 2019 . This rapid growth in construction activity contributed to the growth of the construction market ,” outlined the Business Research Company . Building construction companies are increasingly using green construction techniques to build energy-efficient buildings and reduce construction costs . Green construction refers to the practice of using sustainable building materials and construction processes to create energy-efficient buildings with minimal environmental impact .
“ According to the World Green Building Trends Survey , about 60 % of construction firms across the globe were involved in green construction projects . Certifications such as Leadership in Energy and Environmental Design ( LEED ) help construction companies to develop highperformance , sustainable residential and commercial buildings , and offer a variety of benefits from tax deductions to marketing opportunities . Sustainable construction materials , such as natural paints and steel beams made from recycled material , are being widely used in the UK ,” highlighted the analyst .
“ Other green construction techniques , such as cross-ventilation for more natural environments , green construction software to ensure green compliance , and Green Globes management tools are also being used in the construction industry ,” it added .
The Asia-Pacific region , said the analyst , was the largest region in the construction market in 2022 . North America was the second-largest region .
An eye on the future
Major drivers for the construction sector include the growing global population ; rapid urbanisation ; rising disposable incomes ; increasing modernisation of transportation infrastructure ; increasing private sector investments ; higher investment in construction activities and growing housing demand .
MX3D ’ s 3D-printed steel bridge was opened by Queen Máxima of the Netherlands in Amsterdam in July 2021 © Adriaan de Groot .
The global construction and infrastructure industry is rapidly evolving and advancing towards efficiency through automation , digitalisation , advanced materials etc . On the technology side , 3D-printing , drones , robots and GPS tracking are just some of the tools that the industry has already started using in various capacities .
In the developed world , more advanced and pre-fabrication materials will be used , mainly driven by efforts towards sustainability and controlling pollution . Artificial intelligence ( AI ) technology is revolutionising entire industries , including construction and engineering , and its potential continues to grow every day .
The skills crisis and labour shortages in construction are encouraging diversification in hiring criteria . Employers will focus on hiring new employees who possess the right transferrable skills , attitude and culture fit , whilst upskilling , re-skilling and training new recruits ‘ on the job ’.
The industry will continue to embrace more efficiency and offsite construction solutions are set to become more popular in a bid to overcome supply-chain issues , workforce shortages and higher sustainability goals . This also includes a move towards more circular economy solutions and the transition to digital delivery platforms such as digital twins and Building Information Modelling ( BIM ). n
32 | ismr . net | ISMR May 2023