We want to give you a deeper understanding of what goes on behind the scenes at Barbour ABI, as well as connecting with major figures within the industry to learn what makes them thrive.
This month we are speaking to Barbour ABI’s new Strategic Consultant Damon Schünmann. Damon spent 12 years as associate editor of Construction News and has an expert knowledge of key topics such as digital modernisation, environmental construction, and everything in between, during that time. We got the lowdown on what he has made of 2020 and how the industry needs to adapt for a successful future.
How do you think the construction industry has handled the challenges of 2020 so far?
What a year. Either Brexit or COVID-19 would have presented a mountainous challenge, but when combined, the sector has faced daunting twin peaks. You have to look on with admiration though at how businesses have responded. I’ve spoken to firms that have radically rethought how they supply to or deliver projects, demonstrating once again how necessity is the mother of invention.
An example came from the MD of a lightweight steel frame fabricator. He described to me, during the height of the pandemic’s initial wave, how his company had redesigned the external structural panels they produce. This meant they could be installed onsite in larger sections, with operatives remaining several stories apart to maintain social distancing.
We’ve yet to see the full impact of Brexit of course, but so far businesses have been risk assessing their supply chains as you would expect. I haven’t yet seen much evidence of large scale stockpiling so far, which insofar as products go at least, is encouraging.
Why will technology and the digitisation of construction be vital for companies looking to thrive in the post-COVID industry?
Construction is behind the curve in terms of embracing technology. As the 2017 McKinsey report Reinventing Construction found, the industry lagged even agriculture, forestry, fishing, and hunting in terms of digital take-up. While the situation has improved over the last three years, it still has a long way to go.
Yet the size of the prize is vast in a global construction market valued at about £8 trillion, with not just digitisation, but offsite construction, smart equipment and materials ready to transform productivity levels. This technological march is inevitable and those firms that have set their sails for this disruption will catch the wind, while others risk becoming stranded.
While wafer thin margins coupled with the long tail of the supply chain hamper industry take-up, there’s an undeniable shift in mind-set. The coming years will see an inexorable uptake of technological solutions, from cloud computing and iterative design, to mobile manufacturing plants, to streamlined access to finance and payment and beyond. And as a footnote, remote working in the current climate is clearly making firms assess how tech can reduce their overheads while maintaining productivity.
With COVID, a recession and Brexit on the horizon, what are the most important factors that you think will be key for companies navigating through the many dilemmas that the UK now finds itself in?
There’s an old adage that construction firms don’t tend to go under at the bottom of a recession, so much as when the economy picks up and input costs begin to climb beyond what had been priced when jobs were won. Now more than ever contractors will have to keep a tight rein and resist low ball bidding – or even the temptation to buy work.
On the plus side, many businesses had already been working hard to reduce borrowing and increase cash reserves to leave themselves less exposed to any toughening of the market. The hope now is that these improved positions will allow them to weather the dual storms of COVID and Brexit.
One thing it’s certainly safe to say is we will see a far leaner industry emerge.
With so many immediate concerns to focus upon, such as finances, supply chains and more during this period, why is it imperative for companies to also dedicate focus to environmental methods of construction right now?
While on the one hand the news agenda has perhaps understandably shifted from environmental concerns, the fact remains that we face a longer term existential threat that goes way beyond even the damage that Covid and a poorly managed Brexit might present.
What we know for a fact is that both the delivery and lifetime operation of the built environment are major contributors to carbon emissions. Even if businesses don’t take a proactive approach now for principled reasons, I suspect that sooner rather than later the client focus will swing back to responsible procurement, and businesses with strong track records in low carbon supply and construction will be well set to benefit.