Where is the Construction Industry headed?
Dr. Santosh Prasannan, P.E., Adjunct Professor, IIT Madras, Independent Consultant
In terms of its contribution to the global economy, the construction industry is at the forefront with a staggering annual share of 11- 12 trillion dollars. It is a large employer with more than 300 million people, or about 7% of the workforce. This contribution, however, comes with a heavy price to the environment. The industry's share of global raw material use is 35-40% and produces 30-40% of greenhouse gases and 33% of solid waste.
Challenges and Issues
The industry faces many intrinsic and regulatory issues. It has multiple players along a complex value-chain. Organisations are silo-centric with little collaboration. Cost and schedule overruns in projects are common and which leads to unhappy clients. Land acquisition process and project approvals are tedious and often entangled in bureaucratic procedures - often the prime causes for corruption. In many projects, contractors bear most of the risks. Contracts are often awarded to the lowest bidder and without considering technical merit. The current pandemic has amplified the issue of shortage of skilled labour in the industry. Compared to manufacturing, the construction industry has lagged in adapting new processes and technologies. All these issues have led to low productivity and profits. A recent McKenzie study estimates that 1.6 trillion dollars is lost annually due to poor productivity.
In terms of its contribution to the global economy, the construction industry is at the forefront with a staggering annual share of 11- 12 trillion dollars. It is a large employer with more than 300 million people, or about 7% of the workforce. This contribution, however, comes with a heavy price to the environment. The industry's share of global raw material use is 35-40% and produces 30-40% of greenhouse gases and 33% of solid waste.
Challenges and Issues
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NBM&CW April 2021
