According to Business Wire, the Middle East and Africa construction industry is expected to record a compound annual growth rate of about 7.1 percent to reach US$822.1 billion by 2024.
This is against a global average of about 3.6 percent a year over the forecast period 2018 to 2022, according to GlobalData.
As expected, the Coronavirus pandemic has, however, slowed down this growth. A major concern for investors is the shift in timelines due to the effects of the pandemic. This is mostly due to a significant drop in the sector’s labour.
But just like any other sector, the construction industry also had to adjust to the prevailing conditions to keep most of its projects going. As a result, new trends are now emerging that will most likely shape the industry. These include:
Green environment & technology
The environment has always been a top priority with most industries being put on the spotlight over their emissions footprint. The construction sector has been identified as a major stakeholder in matters of environment conservation.
There’s a sharp focus now on how the industry can realign its construction policies to ensure future buildings are environment-friendly. The use of green technologies is now emerging as a conduit towards achieving the environmental goal for the industry - from manufacturers of building materials to building contractors and property developers.
Innovation and modernization
This is another growing trend, especially in the manufacture of construction building equipment and materials. The industry is now increasingly leaning towards equipment and material that are not just cost-effective but also enhance the quality of work.
The production of construction chemicals is also rapidly changing as a result of process improvement. We are also experiencing a greater need to streamline construction procedures and processes to ensure that they are aligned to the needs of the market.
It is evident that innovation and IT will play a central role in transforming the construction industry, driving the much-needed disruption for better service delivery as well as help create modern and safer buildings.
Automation is another emerging trend taking shape in the global construction sector. According to a report by McKinsey and Company, over 49 percent of all construction tasks can be automated.
Safety, not just for construction workers but also for tenants, will continue to be at the core of every project. Only this time the efforts will be taken a notch higher due to the changing consumer needs and preferences.
Those in the construction equipment and machinery manufacturing are now stepping up their game to ensure that their products conform to new safety regulations. Contractors and property developers are now keen on only using five-star rated construction equipment in their projects.
For instance, fire safety will soon be made mandatory by the government, which will now compel industry players to only use approved fire-rated construction material that help prevent fires.
In an effort to maximize their return on investment, players in the construction industry have now shifted their focus on the use of products that can fulfill multiple applications. This move is especially beneficial to property developers since it will significantly reduce their overall cost as well as help them to deliver projects within the projected timeline.
The same goes for construction equipment and machinery manufactures - we are likely to witness an adoption of multi-use or plug & play equipment in the industry. This will definitely help property developers to deliver world-class projects in their respective markets.
Quality compliance and certification
Compliance and certification is another key area of focus going into the future. The construction industry dynamics are quickly changing not to mention consumer expectations. This has forced the gatekeepers to introduce stringent measures as well as tighten existing once as far as quality of work is concerned.
The Middle East region, for example, is currently undergoing a major transformation in the real estate space. With ongoing mega projects such as the Expo2020 in the UAE and the FIFA World Cup in Qatar, just to mention a few, world standards are now at play.
Local industry players are likely to adopt these standards going forward. This is because most investors will henceforth demand such high standards for their projects. On its part, industry regulators are also likely to take their compliance and certification requirement a notch higher just to keep up with the rest of the world.
These are just some of the emerging trends that are likely to drive the construction industry for the next couple of years. However, the prevailing conditions might also throw a curve ball and introduce other disruptions, which the market will have no choice but to deal with.
The trends notwithstanding, is widely expected that the industry will remain resilient and even continue to perform well despite the global challenges being experienced at the moment.
Any opinions expressed in this article are the author’s own
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© Opinion 2020