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The construction industry was witnessing only slow growth for more than a decadeeven before the outbreak of the pandemic. With the COVID-19 situation, the industry is probably seeing something close to the worst of its days. According to a report by the Global Construction Review, the GVA (Gross Value Added) for the Indian market is set to fall by 34%. Another report by The Economic Times in June revealed that the industry may suffer losses of nearly INR 7.3 lakh crore in construction investment.

However, if McKinsey’s view of disruptions being the catalyst for change is to be believed, the situation could turn in favor of the key players in construction, as well as the new entrants.

So, what’s McKinsey’s view, and how does it impact transformation in the industry in the coming year? Let’s shed some light on that.

Key moves to shape the future of the construction industry

The experts at McKinsey, one of the global leaders in consulting and research, feel that technology-led disruptions and the current pandemic situation will transform the construction ecosystem. They say that the following shifts in construction will not only change the old ways but also highlight the new normal the industry will change too.


From being purely a service-driven industry, construction will take on a product-based approach, marketing the structures that they raise along with their associated services as standardized products. For eg., one interesting set of thoughts is emerging around housing with integrated co-working-like facilities to empower a greater number of people working from home. It will help increase the satisfaction of the end customers, who will be able to understand things better. The idea that when consumers buy products, they buy concrete results will contribute towards the industry performing well holistically.

Control of value-chain and integration with supply-chain

The companies will be more self-sufficient by controlling all design, engineering, manufacturing, supply chain, and other activities along the value chain to establish self-sufficiency. The focus will be more on such companies that adopt a one-stop solution and they will lead the others. In the context of technology (more on that later) this could mean construction companies will have to find a way to hire, engage, and retain technology talent like BIM experts. That’s a considerable shift.

Specialized development

The companies will be developing specialized niche based on their expertise along with different segments like single-family houses, commercial buildings, infrastructure, hospitality real estate, healthcare, etc. This will help them build deep expertise, success stories, and intellectual property that will help them get an edge over their competitors.

Branding and customer-centric development

This point follows from the predictions that construction companies will look to provide product-based solutions, which can be easily marketed to the end customers, and that they will adopt specialized development as their mantra. With narrow targeting, the companies will have to focus on their branding to target niche markets. Their offerings will have to be extremely focused on the needs of that target segment. Customer-centricity will become an inevitable need.

Incorporation of technology

Technological integration will help the construction industry build better, faster, cheaper, and more sustainably. The availability of new materials, increased digitalization, more data-driven decision-making, and automation of workflows will help them seek a better and more promising future. From building off-site manufacturing units to incorporating robotics in manufacturing and construction technology, the returns on investment will increase manifold. Of course, the base of many of these technology-led innovations will have to be the comprehensive, transparent, and current models provided by BIM.

Investing in human resources

In India, the construction industry is probably low down on the list of employment options of millennials. A physically taxing work environment and perceptions about traditional and outdated work practices hold them back. This will change with the incorporation of advanced technologies, increased employment of a full-time skilled workforce, and the dying out of many traditional practices.


Much has been said. Suffice it to say that sustainability is now a key focus area of the industry. With time, it will prove to be the oxygen for construction companies.

How can India make the most of these shifts?

The value of the global construction industry will jump to $12.7 trillion by 2022, according to a report by the Hindu Business Line. If India can make the most of the current disruptions and turn them in its favor with the help of both government and private initiatives, it will be able to contribute about $640 billion to this. The industry has to do away with old practices and adapt to technological advancements like BIM, 3D imaging, Cloud and mobile technologies, AR/VR, Robotics, and more, as well as invest in start-ups that aim to change the future of this sector with their innovative ideas and designs.

It also needs to employ more skilled manpower, especially among the young people, who are scared to join the industry right now. Appropriate salaries, along with better working environments, opportunities for growth, and even higher incentives will prove attractive. The construction companies can also work hand-in-hand with the government to empower women, who currently stand at only 10% of the total workforce in the industry. Such initiatives will help them make the most of the global technologies and disruptions that are set to change the industry.

McKinsey says that the ongoing and future disruptions will shape the industry by breaking conventions, changing business models, and finally delivering on the promise of technological advancements. Such trends, if they come about, could permanently alter the way construction companies run today, forcing them to adapt to the new world. And this will help us leave the pandemic and its economic impact behind to look towards a better and safer future.

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