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How to build back better – the construction industry after the COVID-19 pandemic

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How to build back better – the construction industry after the COVID-19 pandemic - ©iStockphoto.com/Chaosamran_Studio

We look at the challenges and opportunities for a sector that's one of the global economy's driving forces.

Even before the COVID-19 pandemic hit, the construction industry was already grappling with transnational issues like sustainability, climate change, and hyper-urbanization. The case for building back better, creating homes, communities, and workplaces that are better able to help all of us adapt to the needs of life in the 21st century, was clear.

The pandemic further underlined the case for change within the construction sector:

  • By highlighting how digital technologies are already impacting how we live and work, a process the pandemic accelerated by blurring the lines between home and office so that, for example, many of us may never be full-time commuters again.
  • By emphasizing the need for the construction sector, as it adapts to these societal shifts and those that lie ahead, to look critically at its own working practices and business models.

Even though it has a reputation in some quarters as a conservative industry, the construction sector, with its ethos of teams of specialists working towards a common goal, is well placed to respond to these challenges – especially considering the financial hit brought on by the pandemic.

How has the pandemic impacted the construction industry?

For those sectors where teams need to work on-site together, the coronavirus pandemic has hit business hard. That’s certainly true in the construction industry, where even a modest renovation project potentially involves independent contractors working together in close proximity. Scale up to the high-stakes world of large infrastructure projects, commercial property, and new residential developments, and the complexities around keeping everyone safe are even greater.

For this reason alone, it’s not surprising that, when the COVID-19 pandemic first hit in early 2020, there were widespread site shutdowns, either imposed by governments or because of concerns over keeping workers safe. The extent of this downturn was reflected in figures from the UK’s Office for National Statistics (ONS). In April 2020, output within the UK construction sector declined by a record 40.7%1. Following a steady recovery to pre-pandemic activity levels by November, output then fell again in December, by 2.9% month-on-month2, as authorities imposed new restrictions because of a second wave of the pandemic.

The pandemic has also affected supply chains. There has been a steep rise in shipping costs at an international level, partly caused by a shortage of containers, a problem related to COVID-related fluctuations in global trade flows. According to a CNBC report, freight rates from China to the USA and Europe rose by as much as 300% between March and December 20203. Even where supplies were more locally sourced, often the case with bulkier items, there have been problems. In January 2021, the UK Builders Merchants Federation warned that a shortage of materials was “starting to impact the building industry”, with timber costs, for example, up by 20%4.

Looking at sales, while there has been evidence of spikes when lockdown restrictions have eased and pent-up demand has been released, it is typically more difficult to sell property that people can’t visit to view in person. In addition, because COVID-19 has changed attitudes to working from home, there’s evidence that, for example, commercial property portfolios will need to be reassessed and revalued.

The point about changes in the kinds of buildings we need and the financial value of these buildings is touched on in a January 2021 report by business consultants KPMG, The Future of Towns and Cities, post-COVID-195. The report highlights a survey that, in London, 20.1% of jobs are “expected to continue being done from home post-COVID”. In Hemel Hempstead, a town of around 100,000 residents located 39km northwest of London, this figure rises to 27.4%. By December 2020, further noted in the report, the value of the retail property had perhaps declined by 50% from its previous peak, in great part because changing work patterns and the rise of e-commerce are reducing footfall.

How should the construction industry respond?

Any sector that reacted to these kinds of changes in the market by reverting to business as usual would be in trouble. But to return to an earlier point, leaders in the construction industry have already begun to grapple with significant issues, principally:

  • Climate change and the need/demand for greener/more flexible buildings.
  • Supply chain pressures, including the depletion of natural resources.
  • Increasing urbanization and the growth in high-density megacities.

The pressures inherent in these long-term trends have led the sector to adopt Building Information Modeling (BIM) on a widespread basis. BIM is a 3D-based process that enables AEC (architecture, engineering, and construction) professionals to create and manage projects in the virtual world. The overall aim of the approach is to get a detailed overall picture of how a building will look and function (right down to individual components in situ), its costs, and it's carbon footprint before construction even begins.

In the UK in 2019, close to 70% of all construction industry professionals were already using BIM on projects 6, a percentage that has steadily grown over recent years. Moreover, the UK is in the vanguard of countries where BIM is poised to become a standard for centrally procured public and private sector projects. This, in turn, impacts businesses that supply the construction industry because it leads to a demand for BIM content, accurate digital representations of products needed in the construction process.

As the construction sector recovers in the wake of the COVID-19 pandemic, the use of this approach will only become more deeply embedded in the way the industry operates – and indeed, many businesses and organizations will only partner with those that also use BIM. At the most basic economic level, the industry will need to adopt BIM because it is a more efficient and cost-effective way of organizing and managing projects. This will be especially crucial at a time when, for example, supply chains have been so badly disrupted and when the industry needs to organize projects, at least in the shorter term and perhaps for longer, to take account of social distancing.

What kinds of projects will the construction industry be working on?

There’s one lesson we haven’t covered here from the pandemic. It’s the need for resilience. COVID-19 has taught us that all our assumptions about how the world works can change virtually overnight. Looking ahead at a century where, for example, climate change will cause more extreme weather events, the kinds of buildings we need will change in ways that as yet hard to predict.

That doesn’t mean we will abandon our existing urban spaces. The United Nations estimates that, by 2050, two-thirds of us will live in urban areas 7. Yet it’s clear we shouldn’t assume these towns and cities will look like today’s metro areas. COVID has also taught us that town centers in their current form, where retail and office space dominate, may be unsustainable.

Looking at the construction industry from this angle, BIM may not just be a help in putting together buildings more efficiently. It will truly be an essential tool to shape and adapt to whatever living, working and entertainment buildings and cityscapes will look like post-COVID-19. This means that building product manufacturers should make haste and ensure they can provide the construction industry with BIM-ready content if they are to future-proof their business.


  1. www.ons.gov.uk/businessindustryandtrade/constructionindustry/bulletins/constructionoutputingreatbritain/november2020
  2. www.ons.gov.uk/businessindustryandtrade/constructionindustry/bulletins/constructionoutputingreatbritain/december2020
  3. www.cnbc.com/2021/01/22/shipping-container-shortage-is-causing-shipping-costs-to-rise.html
  4. www.bmf.org.uk/BMF/News/Supply-issues-impacting-on-construction-sector.aspx
  5. https://assets.kpmg/content/dam/kpmg/uk/pdf/2021/01/the-future-of-towns-and-cities-post-covid-19-how-will-covid-19-transform-england-s-town-and-city-centres.pdf
  6. www.statista.com/statistics/1019177/construction-industry-bim-adoption-rate-uk/
  7. www.un.org/development/desa/pd/themes/urbanization