Analysts: Infrastructure, modularization, resiliency top industry drivers
Approaching the halfway mark of the year, the commercial construction industry is strong, staving off any premature cooling before an impending economic downturn and integrating innovation in relatively slow but steady measures all the time.
But what do experts anticipate for the rest of the year and going into next? Two presenters at last week’s ENR FutureTech conference in San Francisco offered their takes on where the industry is heading — some that mirror the trends Construction Dive anticipated going into the year, and some that represent minor shifts in the market.
Infrastructure spending is inevitable
Even though Congress and President Donald Trump can’t agree on how to fund infrastructure improvement projects, many are inevitable, and they will have a huge impact on the construction industry this year and into the future, according to presenter T.G. Jayanth, Capital Projects Expert at McKinsey & Co.
“It’s a well-known fact that infrastructure in this country is aging, it’s collapsing and breaking,” Jayanth said. Even though federal infrastructure legislation is still under debate, he is bullish on the segment, saying that general contractors that serve this part of the industry “are in the right place.”
Another big trend — the growth of cities — is driving the need for more roads, transportation, green spaces and recreational and entertainment venues, he said. By 2030, about 65% of the world’s population will live in urban areas. “This creates a critical need for housing and infrastructure,” he noted.
The cost of such development is staggering, he said, with a global spend of about $2.5 trillion annually. Power, roads, telecommunications and water are the top four most in-demand types of infrastructure projects, according to McKinsey data.
The pricetag for many of these projects will increase up to 40% because they will be built to high levels of sustainability, Jayanth said, noting that resiliency will play an important role as extreme weather becomes the norm.