Indian Construction Industry Overview
The Indian economy has been affected heavily due to lockdowns and restrictions put in place to contain the impact made by the COVID 19 pandemic. With a 23.9 % slump in the economy in the April to June quarter as compared to the same period in 2019, there has been widespread chaos and disruptions in almost every sector. The construction sector which employs nearly 51 million people (the second largest employer in the country) and contributes approximately 9% of the nation’s GDP was hurt just as much or more.
However, all is not gloomy for our domain as analysts expect a sharp return to growth in 2021. It is expected that from a slump of nearly 14.9 %, the construction sector will register a formidable growth of 11.6% in 2021. Opportunities look set to emerge.
As we learn to live with the virus and hopes of vaccines wax and wane, likely, business as usual will slowly settle in. Of course, there will still be challenges for construction companies to tackle. Here are the top 3:
EMPLOYEE SAFETY :
With COVID 19 still a threat, the most important challenge for construction companies is to keep their staff healthy and free from COVID infections on the sites. Obviously, employee safety is a moral imperative. That apart, a large number of people infected at any work site will cause turmoil, affect work deliverables, and cause delays. All this will ultimately push up costs.
The net impact will be changed working conditions, more onerous compliance efforts, and altered processes that will take time to settle in.
LOWER SPENDING BY CONSUMERS
There have been job losses and wage reduction across the economic spectrum. The uncertainty that looms large will certainly play on the minds of consumers and investors. In commercial real estate, there is also some concern about the impact of widespread “work from home” policies adopted by Indian corporates during the lockdowns. In several well-publicized examples, mostly from the technology or services sectors, companies have embraced long-term remote working policies. By allowing most (or all) of their employees to continue to work from home, they hope to save on real estate costs. It’s still unclear how this will play out in the long term for the sector.
Hence spending on construction will be more cautious and considered. Customer behaviour may have changed and they may now value new financing options, better proximity to healthcare centres, different features, and much more.
THE RISE IN MATERIAL COSTS
The pandemic has disrupted both national and international supply chains considerably and it will take a while before everything returns to pre-COVID levels. Until then, the construction sector must brace for frequent price hikes of raw materials due to a shortage of supply. Additionally, governments across states or the central government may bring in additional cess on taxes to strengthen their finances which will directly impact the price of materials.
So how can the Indian construction industry make a revival in 2021 in the wake of these crucial challenges? The answer may lie with technology.
By leveraging trusted technology, construction companies can uncover new opportunities for streamlining their operations and improving customer satisfaction leading to better sales.
Let’s see the top opportunities that technology can create for the Indian construction sector in 2021:
BETTER COMPLIANCE TO EMPLOYEE WELLNESS AND SAFETY
By using the right set of technology solutions and platforms, construction companies can help in safeguarding the health of their employees. Workplace safety compliance can be enhanced using intelligent thermal scanning, digital fencing for ensuring social distance between staff, and several other possibilities. Along with arresting the spread of COVID, the opportunity can also be utilized to strategically bring in new protection and safety norms within the sector that will help in improving the lives of workers in the long run too.
IMPROVED GOVERNANCE OF PROJECTS
Through better project planning and modeling using BIM (Virtual Design and Construction-VDC), planners can estimate projects needs better, collaborate and communicate better, and easily manage the delivery for better results. Using BIM as the common framework, all the stakeholders can track the progress of projects, mitigate possible delays due to labor or material shortages, provide better estimates for pricing and revenue management and ultimately create a more efficiently managed and executed construction project. The opportunity in 2021 is to use such technology so that projects can be even managed by supervisors or engineers from remote locations through online monitoring.
PERSONALIZED SALES EXPERIENCE
With advancements in Augmented Reality (AR) and Virtual Reality (VR) technology, it becomes easier for customers to experience the full scale of a project virtually. This will help construction companies create virtual tours for potential customers to better equip them with information about the project that may aid in their decision to invest. Technology can also help in creating targeted advertising campaigns to better market projects to the right audience with the right information on price, financing options, amenities, etc. to win their interest and ultimately lead to a deal.
No question that we all want 2020 to end as fast as possible. 2021 is seen as a year of hope everywhere. The construction sector in India too is particularly optimistic about 2021. The belief is the new year will open the doors to solving numerous long-standing challenges in the industry with the help of technology. Many of the new norms adopted in the sector during the pandemic such as better health and safety systems for employees, improved project planning, could have a long-standing impact. Digital transformation could become the cornerstone in the Indian construction sector's revival plans for 2021 and it may all be down to the pandemic to have forced that change into the sector.