The construction industry has been undergoing substantial changes recently, and we expect these to accelerate in 2024 and beyond, due to several external and internal factors.

In the UK for example, the government’s decision to stop help-to-buy schemes is changing the financial landscape of the housing market, which is likely to continue to slow down construction. In the background, rising interest rates and economic volatility across Europe are making it more expensive and less likely for consumers to borrow, which will affect investment in construction projects. As a result, those in the industry need to rethink their strategies and adapt.

On top of these economic and policy changes, technological advances have been transforming many sectors over the past years. Recent developments like AI at scale are accelerating these shifts. So far, the construction industry has managed to avoid some of the rapid changes. However, it is becoming clear that those who are willing to embrace emerging technologies could gain a real advantage. This is an exciting opportunity for innovators ready to take lead, and it signals the start of a new era in the construction industry across Europe.

We have analysed the trends and worked with some key players in the space to analyse the current dynamics. Based on our experience in construction, we have distilled the impact into several key areas.

Green building practices and sustainability 

The shift towards sustainability will sweep across all trades and will not spare the construction industry, which emphasises the importance of addressing this topic proactively.

Green building practices involve various strategies that construction companies can use to achieve environmental goals. These strategies include cutting down on energy use, reducing waste, and improving construction quality. Embracing these practices can bring about positive changes. Construction companies can seize opportunities by developing green building solutions like using eco-friendly materials, making energy-efficient buildings, conserving water, or designing spaces for vertical farming. These efforts go beyond just buildings; they help create sustainable homes and communities, lessen the environmental effects of construction, and enhance residents' quality of life.

Making existing buildings safer for occupants and saving lives

Several European countries, including Germany, France, Ireland, and the Netherlands, have taken significant steps to enhance fire safety following the Grenfell Tower fire of 2017 in the UK, which led to the Building Safety Act in 2022. A recent fire in Spain shows that this is not an isolated issue. Those catastrophic events expose significant shortcomings in building safety protocols. These efforts involve rigorous inspections, updated regulations, and the removal of unsafe cladding materials. While not always formalised like the UK's developer pledge, these countries have shown a strong commitment to improving fire safety standards through coordinated actions between governments, developers, and property owners.

Navigating the complexities of safety refurbishments work requires collaboration across a diverse array of stakeholders with differing interests. To achieve this successfully, blending communication, negotiation, and consensus-building is critical.

These projects are heavily influenced by politics and pose significant risks for developers, both in terms of their reputation and finances. Frequently changing rules and regulations can cause confusion and make decision-making difficult. Given the high level of political scrutiny on these projects, developers must allocate enough attention and resources to address any issues that arise.

Better decision-making with the help of software

Construction companies are recognising the potential of Construction Management Software (CMS) in boosting operational productivity, reducing expenses, and improving safety measures. These software solutions help manage project timelines and resources, but capabilities go beyond simple tracking; CMS enables construction firms to anticipate potential challenges before they develop into significant issues, facilitating prompt and corrective measures.

An additional software tool that has seen a surge in popularity are Building Information Management (BIM) systems. These systems can aid construction firms in enhancing their operational productivity, cutting down costs, and improving safety. For example, BIM systems can generate 3D models of structures and simulate construction procedures.

It is important to consider that the use of software is not the solution to all business challenges. As software installations can often be costly and core processes and operations are impacted by the implementation, the underlying priorities need to be carefully assessed and effort should only be spent in the areas that will yield the highest benefit.

Supply chain optimisation using data science

Another challenge in complex construction projects is effective supply chain management. Balancing the trade-off between bulk-buying materials for cheaper prices, considering associated increased storage and transport complexities, or to buy smaller amounts and risk paying more or facing delays, is an operational challenge. One way to tackle this challenge is by introducing an integrated supply chain system, similar to what is used in the automotive industry. This could mean setting up a unified vendor platform that includes all stakeholders involved to create transparency, improve communication, and contract management.

Learning from industries that have made significant advancements in integrating their supply chain towards just-in-time deliveries, the key to solving the puzzle lies in the intelligent use of data and dynamic algorithms. The enablers are large data sets covering the availability, quality, and pricing of materials, alongside monitoring the demand, productivity, and skills of the labour force. Dynamic algorithms then suggest optimised orders and schedules and reduce operational complexity.

In this context, the idea of a curated marketplace becomes even more relevant. It would serve as a platform where these data sets can be shared and accessed by all stakeholders, enabling them to make informed decisions based on real-time information.

The connected building site

Connectivity, Industry 4.0, and Internet of Things (IoT) are topics that have transformed industries such as production and logistics in recent years and are now gaining significant traction in the construction industry. This technological evolution as the potential to enhance efficiency, cut costs, and bolster safety measures. By employing IoT sensors, construction companies can gain real-time insights into the structural integrity of buildings, detect equipment malfunctions, and track the precise machine locations. This proactive monitoring allows for the identification of potential issues before they escalate, enabling timely corrective actions.

However, it is important to remember that the implementation of these technologies should be a calculated and iterative process. Rather than adopting the latest technology, businesses should find a solution that is tailored towards specific needs. Regular testing and iteration can help save costs in the long run and ensure optimised use for the task at hand.

Advanced safety solutions using new technology

The fourth industrial evolution plays out in phases and brings with it modern technologies that gradually embed into business use. Moving on from PCs to mobile phones, the next frontiers are technologies such as Virtual Reality (VR), Augmented Reality (AR), wearables, and AI data analysis. These innovative tools hold the promise of not only improving operational efficiency and reducing costs but also enhancing overall safety measures for construction companies. AR and VR solutions can offer immersive training experiences for workers through simulations. Wearables, on the other hand, can become crucial in real-time monitoring of workers' health and safety. AI data analysis adds an extra layer of intelligence by identifying potential safety hazards and enabling preventative corrective actions.

However, as modern technologies emerge, they are often not fully matured, tested and require significant business testing and development. Hence it is prudent to rely on more mature technologies with a successful track record from the wider industry.

Reducing complexity and timelines through modular building techniques

Lastly, novel construction practices such as modular housing have the potential to fundamentally disrupt the industry in the coming years. This innovative approach involves the utilisation of prefabricated building components, which are put together off-site and then seamlessly assembled on-site.

Modular construction's benefits are multifaceted. They not only reduce construction time but also minimises waste and elevates the overall quality. The real opportunities lie in the strategic development of modular housing solutions that can streamline operations and reduce timelines and costs. It can further play a pivotal role in creating affordable housing solutions, a topic that has become pivotal for many European Countries. In the UK for example, the Affordable Homes Programme (AHP) programme aims to allocate £11.5 billion of grant funding over five years.

Meanwhile, the Netherlands are now at the forefront of modular housing development in Europe, particularly with its innovative floating communities that are pre-fabricated and built offshore. Pilot schemes aim to address both population density and climate change challenges. This initiative is part of a broader trend in the Netherlands to develop modular and floating housing as a solution to urban space limitations and rising sea levels.

Metyis as a strong partner for your success 

In 2024 and beyond, the construction industry is expected to witness transformative shifts fuelled by innovative technologies and strategies. From the adoption of Construction Management Software (CMS) to the integration of IoT applications, modular housing, and advanced safety solutions, the sector will undergo profound changes. Metyis emerges as a crucial partner to help construction companies navigate and thrive in this era defined by innovation and resilience.

With a deep understanding of the construction industry, particularly in the UK, and a strong track record in delivering complex programmes and organisational transformations, Metyis ensures that partners remain ahead of competitors amidst everchanging industry developments. Leveraging expertise in areas such as digital transformation, business model innovation, sustainability strategies, and IoT product development, Metyis promises tangible results - not just innovation, but also sustainable growth and enhanced efficiencies for organisations operating in the construction industry, regardless of their scale.

The future blueprint transcends mere structures; it entails reshaping the very foundations of construction practices, and Metyis is well-positioned to steer this transformation through a collaborative partnership approach.

About the authors behind this article:

Janko Venhorst is a Principal at the London office, supported by Anish Patel, Senior Partner and Executive Board Member, also based in London.